Document:

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                                                                   EXHIBIT 10.16

                                                                  EXECUTION COPY

                              AMENDED AND RESTATED

                          COPYRIGHT SECURITY AGREEMENT

         AMENDED AND RESTATED COPYRIGHT SECURITY AGREEMENT, dated as of January
22, 2003, among FINLAY FINE JEWELRY CORPORATION, a Delaware corporation
("Borrower"), FINLAY JEWELRY, INC., a Delaware corporation, ("Finlay") , Finlay
Merchandising & Buying, Inc., a Delaware corporation ("Finlay Merchandising")
and eFinlay, Inc., a Delaware corporation ("eFinlay"); (Borrower, Finlay, Finlay
Merchandising and eFinlay are sometimes collectively referred to herein as
"Grantors" and individually as a "Grantor"), in favor of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, in its capacity as Agent for
Lenders.

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

         WHEREAS, the Borrower is party to the Amended and Restated Credit
Agreement dated as of September 11, 1997, among the Borrower, Finlay
Enterprises, Inc. ("Parent"), the Lenders thereunder and Agent (as amended, the
"Existing Credit Agreement");

         WHEREAS, the Borrower is party to a Security Agreement and
Mortgage-Trademarks, Patents and Copyrights dated as of May 26, 1993 (as
amended, the "Borrower Copyright Agreement"), in favor of the Agent;

         WHEREAS, Finlay is party to a Security Agreement and
Mortgage-Trademarks, Patents and Copyrights dated as of May 26, 1993 (as
amended, the "Finlay Copyright Agreement", together with the Borrower Trademark
Agreement, the "Existing Copyright Agreements"), in favor of the Agent;

         WHEREAS, the Borrower, the Parent, the Lenders and the Agent have
agreed to amend and restate the Existing Credit Agreement on terms set forth in
the Second Amended and Restated Credit Agreement, dated as of the date hereof
(including all annexes, exhibits and schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the "Credit Agreement"),
among the Borrower, the Parent, the Lenders, the Agent and Fleet Precious
Metals, Inc., as Documentation Agent, pursuant to which the Lenders have agreed
to continue to make secured revolving credit advances to the Borrower from time
to time;

         WHEREAS, the Borrower and the Agent have agreed to amend and restate
the Existing Copyright Agreements to permit the foregoing on the terms set forth
in this Agreement;

         WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities under the Existing
Copyright Agreements or evidence payment of all or any of such obligations and
liabilities, that this Agreement amend and restate in its entirety the Existing
Copyright Agreements, and that from and after the effectiveness of this
agreement the Existing Copyright Agreements be of no further force or effect
except as to

                    (C) Copyright 2002. All rights reserved.

<PAGE>

evidence the granting of the liens thereunder, the incurrence of the obligations
of the parties thereto and the representations and warranties made thereunder;

         WHEREAS, Agent and Lenders are willing to make secured revolving credit
advances to the Borrower and to incur Letter of Credit Obligations as provided
for in the Credit Agreement, but only upon the condition, among others, that
each Grantor shall have executed and delivered to Agent, for itself and the
ratable benefit of Lenders, that certain Amended and Restated Security Agreement
dated as of the date herewith (including all annexes, exhibits or schedules
thereto, as from time to time amended, restated, supplemented or otherwise
modified, the "Security Agreement");

         WHEREAS, pursuant to the Security Agreement, each Grantor is required
to execute and deliver to Agent, for itself and the ratable benefit of Lenders,
this Copyright Security Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

         1 DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement.

         2 GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor
hereby grants to Agent, on behalf of itself and Lenders, a continuing first
priority security interest in all of Grantor's right, title and interest in, to
and under the following, whether presently existing or hereafter created or
acquired (collectively, the "Copyright Collateral"):

               (a) all of its Copyrights and Copyright Licenses to which it is a
      party including those referred to on Schedule I hereto;

               (b) all reissues, continuations or extensions of the foregoing;
      and

               (c) all products and proceeds of the foregoing, including,
      without limitation, any claim by Grantor against third parties for past,
      present or future infringement or dilution of any Copyright or any
      Copyright licensed under any Copyright License.

         3 SECURITY AGREEMENT. The security interests granted pursuant to this
Copyright Security Agreement are granted in conjunction with the security
interests granted to Agent, on behalf of itself and Lenders, pursuant to the
Security Agreement. Each Grantor hereby acknowledges and affirms that the rights
and remedies of Agent with respect to the security interest in the Copyright
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

                            [signature page follows]

                                        2

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         IN WITNESS WHEREOF, Grantor has caused this Amended and Restated
Copyright Security Agreement to be executed and delivered by its duly authorized
officer as of the date first set forth above.

                                  FINLAY FINE JEWELRY CORPORATION

                                  By: /s/ Bruce E. Zurlnick
                                      ---------------------------------
                                  Name: Bruce E. Zurlnick
                                        -------------------------------
                                  Title: Sr. V.P., Treas., & CFO
                                         ------------------------------

                                  FINLAY JEWELRY, INC.

                                  By: /s/ Bruce E. Zurlnick
                                      ---------------------------------
                                  Name: Bruce E. Zurlnick
                                        -------------------------------
                                  Title: Sr. V.P., Treas., & CFO
                                         ------------------------------

                                  Finlay Merchandising & Buying, Inc.

                                  By: /s/ Bonni G. Davis
                                      ---------------------------------
                                  Name: Bonni G. Davis
                                        -------------------------------
                                  Title: V.P., Sec., & General Counsel
                                         ------------------------------

                                  eFINLAY, INC.

                                  By: /s/ Bonni G. Davis
                                      ---------------------------------
                                  Name: Bonni G. Davis
                                        -------------------------------
                                  Title:V.P., Sec., & General Counsel
                                        -------------------------------

                [Signature page to Copyright Security Agreement]

<PAGE>

ACCEPTED AND ACKNOWLEDGED BY:

GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent

By: /s/ Charles Chiodo
    ---------------------------------
Name: Charles Chiodo
      -------------------------------
Title: Duly Authorized Signatory
       ------------------------------

                [Signature page to Copyright Security Agreement]<PAGE>

                                                                   Exhibit 10.17

             SECOND AMENDED AND RESTATED OPEN-END MORTGAGE DEED AND
                               SECURITY AGREEMENT

                                      from

                        FINLAY FINE JEWELRY CORPORATION,

                                    Mortgagor

                                       to

                      GENERAL ELECTRIC CAPITAL CORPORATION,

                                    Mortgagee

                            Dated February 20, 2003,

                        effective as of January 22, 2003

                           Prepared by and Return to:
                              Lisa B. Gordon, Esq.
                           Weil, Gotshal & Manges LLP
                                767 Fifth Avenue
                            New York, New York 10153

<PAGE>

    SECOND AMENDED AND RESTATED OPEN-END MORTGAGE DEED AND SECURITY AGREEMENT

     THIS SECOND AMENDED AND RESTATED OPEN-END MORTGAGE DEED AND SECURITY
AGREEMENT (this "Mortgage"), dated February ___, 2003, effective as of January
22, 2003, by FINLAY FINE JEWELRY CORPORATION, a Delaware corporation
("Mortgagor"), having an office at 529 Fifth Avenue, 6th Floor, New York, New
York 10017 to GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
("Mortgagee"), having an office at 800 Connecticut Avenue, Two North, Norwalk,
Connecticut 06854

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

         WHEREAS, pursuant to the terms, conditions and provisions of the Credit
Agreement, dated as of May 26, 1993 (the "Original Credit Agreement"), among the
Mortgagor, Finlay Enterprises, Inc. (the "Parent"), the Lenders thereunder and
Mortgagee, individually as a Lender thereunder and as agent for the Lenders
thereunder, as amended and restated as of September 11, 1997 (the "First Amended
and Restated Credit Agreement"), the Lenders agreed to make Loans to the
Mortgagor in the maximum original principal amount of ONE HUNDRED SEVENTY FIVE
MILLION DOLLARS ($175,000,000.00) having a termination date of March 11, 2003;

         WHEREAS, (i) as a material inducement for the Lenders to enter into the
First Amended and Restated Credit Agreement and the other Loan Documents, (ii)
to secure the payment and performance of the Mortgagor's obligations under the
First Amended and Restated Credit Agreement and the other Loan Documents, and
(iii) to secure the payment and performance of the Obligations, Mortgagor
executed and delivered a First Mortgage Deed and Security Agreement dated as of
September 11, 1997 (the "Original Mortgage"), which Mortgage, by its terms, did
not, under any circumstances, secure amounts in excess of $3,325,000 of
principal outstanding plus interest thereon and any disbursements, and which
Original Mortgage was recorded as set forth on Schedule 1 hereto;

         WHEREAS, the First Amended and Restated Credit Agreement was amended by
an Amendment Agreement No. 1 dated as of September 11, 1997 (the "First
Amendment") which First Amendment, among other things, increased the maximum
principal amount of the Loan from ONE HUNDRED SEVENTY FIVE MILLION DOLLARS
($175,000,000.00) to TWO HUNDRED TWENTY FIVE MILLION DOLLARS ($225,000,000.00)
having a termination date of March 11, 2003;

         WHEREAS, the First Amended and Restated Credit Agreement was further
amended by an Amendment Agreement No. 3 dated as of April 24, 1998 (the "Third
Amendment") which Third Amendment, among other things, increased the maximum
principal amount of the Loan from TWO HUNDRED TWENTY FIVE MILLION DOLLARS
($225,000,000.00) to TWO HUNDRED SEVENTY FIVE MILLION DOLLARS ($275,000,000.00)
having a termination date of March 11, 2003;

<PAGE>

         WHEREAS, the First Amended and Restated Credit Agreement, as amended by
the First Amendment, an Amendment Agreement No. 2, the Third Amendment, an
Amendment Agreement No. 4, an Amendment Agreement No. 5, an Amendment Agreement
No. 6, an Amendment Agreement No. 7, an Amendment Agreement No. 8, an Amendment
Agreement No. 9, an Amendment Agreement No. 10, and an Amendment Agreement No.
11, is being further amended and restated in its entirety pursuant to the Second
Amended and Restated Credit Agreement dated as of January 22, 2003 (as amended,
restated, supplemented or otherwise modified from time to time, the "Second
Amended and Restated Credit Agreement") among the Mortgagor, the Parent, the
Lenders thereunder and Mortgagee, individually as a Lender thereunder and as
agent for the Lenders thereunder which Second Amended and Restated Credit
Agreement, among other things, decreased the maximum principal amount which may
from time to time be outstanding under the Loan from TWO HUNDRED SEVENTY FIVE
MILLION DOLLARS ($275,000,000.00) to TWO HUNDRED TWENTY FIVE MILLION DOLLARS
($225,000,000.00), and extends the term for payment thereof so as to have a
termination date of January 15, 2008;

         WHEREAS, as a material inducement for the Lenders to enter into the
Second Amended and Restated Credit Agreement and to extend the Loan as therein
provided, the parties hereto desire to amend and restate the Original Mortgage
so as to secure the obligations under the Second Amended and Restated Credit
Agreement;

         NOW, THEREFORE, IT IS AGREED THAT THE ORIGINAL MORTGAGE IS HEREBY
AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS FOLLOWS:

         The condition of this deed is such that Mortgagor is indebted to the
Mortgagee for:

              (a) the payment of (i) the principal sum of up to TWO HUNDRED
         TWENTY FIVE MILLION DOLLARS ($225,000,000), in the aggregate to be paid
         plus all accrued and deferred interest thereon to be paid pursuant to
         the provisions of the Second Amended and Restated Credit Agreement and
         those certain Notes, payable to the Lenders (the aforesaid Credit
         Agreement and Notes are hereinafter collectively referred to as the
         "Credit Agreement"), (ii) any future advances and readvances of such
         principal amount from time to time made pursuant to the Credit
         Agreement, (iii) any and all other sums due or to become due under the
         Credit Agreement, this Mortgage or any other Loan Document (hereinafter
         defined), (iv) any further or subsequent advances made under the Credit
         Agreement, this Mortgage or any of the Loan Documents, and (v) any
         extensions, renewals, replacements or modifications of the Credit
         Agreement or any other Loan Document (the items set forth in clauses
         (i) through (v) hereof being hereinafter collectively referred to as
         the "Indebtedness"), and

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<PAGE>

              (b) the performance of all of the terms, covenants, conditions,
         agreements, obligations and liabilities of Mortgagor (collectively the
         "Obligations") under (i) this Mortgage, (ii) the Credit Agreement,
         (iii) any deeds of trust or mortgages in addition to this Mortgage now
         or hereafter made by Mortgagor to secure the Indebtedness (such
         additional deeds of trust and mortgages being hereinafter collectively
         referred to as the "Additional Deeds of Trust"), (iv) any supplemental
         agreements, undertakings, instruments, documents or other writings
         executed by Mortgagor as a condition to advances under the Credit
         Agreement or otherwise in connection with the Credit Agreement, (v) all
         chattel mortgages, pledges, powers of attorney, consents, assignments,
         notices, leases and financing statements heretofore, now or hereafter
         executed by or on behalf of Mortgagor or any other Person (hereinafter
         defined) and/or delivered to Mortgagee in connection with the Credit
         Agreement or the transactions contemplated thereby, and (vi) any
         extensions, renewals, replacements or modifications of any of the
         foregoing (this Mortgage, the Credit Agreement, the Additional Deeds of
         Trust and any other supplemental agreements, undertakings, instruments,
         documents or other writings executed in connection with any of the
         foregoing, together with (y) the foregoing powers of attorney,
         consents, assignments, notices, leases and financing statements and (z)
         any deeds of trust, mortgages, security agreements or assignments now
         or hereafter made to secure the Indebtedness and the Obligations; all
         of the foregoing documents being hereinafter collectively referred to
         as the "Loan Documents"),

and in consideration of Ten Dollars ($10.00), in hand paid, the receipt and
legal sufficiency of which are hereby acknowledged, Mortgagor hereby mortgages,
grants, bargains, sells, warrants, conveys, aliens, premises, releases, assigns,
sets over and confirms to Mortgagee the following property and all substitutions
for and all replacements, reversions and remainders of such property, whether
now owned or held or hereafter acquired by Mortgagor (collectively the
"Mortgaged Property" or "Property"):

         All those plots, pieces or parcels of land more particularly described
in Exhibit A annexed hereto and made a part hereof together with the right,
title and interest of Mortgagor, if any, in and to the streets and in and to the
land lying in the bed of any streets, roads or avenues, open or proposed, public
or private, in front of, adjoining or abutting said land to the center line
thereof, the air space and development rights pertaining to said land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments and appurtenances belonging to,
or in any way appertaining to, said land, all easements now or hereafter
benefitting said land and all royalties and rights appertaining to the use and
enjoyment of said land, including, but without limiting the generality of the
foregoing, all alley, vault, drainage, mineral, water, oil, coal, gas, timber
and other similar rights (collectively the "Land");

         TOGETHER with the buildings and other improvements now or hereafter
erected on the Land (the buildings and other improvements being hereinafter
collectively

                                       3
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referred to as the "Buildings," and the Land together with the Buildings and the
Fixtures (hereinafter defined), being hereinafter collectively referred to as
the "Real Estate");

         TOGETHER with all and singular the reversion or reversions, remainder
or remainders, rents, issues, profits and revenues of the Real Estate and all of
the estate, right, title, interest, dower and right of dower, curtesy and right
of curtesy, property, possession, claim and demand whatsoever, both in law and
at equity, of Mortgagor of, in and to the Real Estate and of, in and to every
part and parcel thereof, with the appurtenances, at any time belonging or in any
way appertaining thereto;

         TOGETHER with all of the fixtures, systems, machinery, apparatus,
equipment and fittings of every kind and nature whatsoever and all appurtenances
and additions thereto and substitutions or replacements thereof and all items of
personal property now owned or hereafter acquired by Mortgagor and now or
hereafter attached or affixed to, or constituting a part of, the Real Estate or
any portion thereof (collectively the "Fixtures"), including, but without
limiting the generality of the foregoing, all heating, electrical, mechanical,
lighting, lifting, plumbing, ventilating, air conditioning and air-cooling
fixtures, systems, machinery, apparatus and equipment, refrigerating,
incinerating and power fixtures, systems, machinery, apparatus and equipment,
loading and unloading fixtures, systems, machinery, apparatus and equipment,
escalators, elevators, boilers, communication systems, switchboards, sprinkler
systems and other fire prevention and extinguishing fixtures, systems,
machinery, apparatus and equipment, and all engines, motors, dynamos, machinery,
wiring, pipes, pumps, tanks, conduits and ducts constituting a part of any of
the foregoing, it being understood and agreed that all of the Fixtures are
appropriated to the use of the Real Estate and, for the purposes of this
Mortgage, shall be deemed conclusively to be Real Estate and conveyed hereby;

         TOGETHER with all drainage, mineral, water, oil, gas, timber and sewer
pipes, conduits and wires, and other facilities furnishing utility or other
services and other similar rights now or hereafter benefitting the Real Estate
or any portion thereof or appertaining thereto;

         TOGETHER with Mortgagor's right, title and interest in, to and under
all leases, subleases, underlettings, concession agreements, licenses and other
occupancy agreements which now or hereafter may affect the Real Estate or any
portion thereof and under any and all guarantees, modifications, renewals and
extensions thereof (collectively the "Leases"), and in and to any and all
deposits made or hereafter made as security under the Leases, subject to the
prior legal rights under the Leases of the lessees making such deposits,
together with any and all of the benefits, revenues, income, rents, issues and
profits due or to become due or to which Mortgagor is now or hereafter may
become entitled arising out of the Leases or the Real Estate or any portion
thereof (collectively the "Rents"), provided however, that so long as there is
no Event of Default (hereinafter defined) continuing, Mortgagor shall have a
license to collect, use and retain the Rents;

         TOGETHER with (a) all unearned premiums, accrued, accruing or to accrue
under any insurance policies now or hereafter obtained by Mortgagor and
Mortgagor's interest in and to all proceeds which now or hereafter may be paid
in

                                       4
<PAGE>

connection with the conversion of the Property or any portion thereof into cash
or liquidated claims, together with the interest payable thereon and the right
to collect and receive the same, including, but without limiting the generality
of the foregoing, proceeds of casualty insurance, title insurance and any other
insurance now or hereafter maintained with respect to the Real Estate or in
connection with the use or operation thereof (collectively the "Insurance
Proceeds"), and (b) all awards, payments and/or other compensation, together
with the interest payable thereon and the right to collect and receive the same,
which now or hereafter may be made with respect to the Property as a result of
(i) a taking by eminent domain, condemnation or otherwise, (ii) the change of
grade of any street, road or avenue or the widening of any streets, roads or
avenues adjoining or abutting the Land, or (iii) any other injury to, or
decrease in the value of, the Property or any portion thereof (collectively the
"Awards"), in any of the foregoing circumstances described in clauses (a) or (b)
above to the extent of the entire amount of the Indebtedness outstanding as of
the date of Mortgagee's receipt of any such Insurance Proceeds or Awards,
notwithstanding that the entire amount of the Indebtedness may not then be due
and payable, and also to the extent of reasonable attorneys' fees, costs and
disbursements incurred by Mortgagee in connection with the collection of any
such Insurance Proceeds or Awards. Subject to the provisions of the Credit
Agreement, Mortgagor hereby assigns to Mortgagee, and Mortgagee is hereby
authorized to collect and receive, all Insurance Proceeds and Awards and to give
proper receipts and acquittances therefor and to apply the same in accordance
with the terms of the Credit Agreement. Mortgagor hereby agrees to make, execute
and deliver, from time to time, upon demand, such further documents, instruments
or assurances as may be requested by Mortgagee to confirm the assignment of the
Insurance Proceeds and the Awards to Mortgagee, free and clear of any interest
of Mortgagor whatsoever therein and free and clear of any other liens, claims or
encumbrances of any kind or nature whatsoever;

         TOGETHER with all right, title and interest of Mortgagor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Real Estate, and in each such
case, the foregoing shall be deemed a part of the Real Estate and shall become
subject to the lien of this Mortgage as fully and completely, and with the same
priority and effect, as though now owned by Mortgagor and specifically described
herein, without any further deed of trust, mortgage, conveyance, assignment or
other act by Mortgagor;

         TOGETHER with all of Mortgagor's rights to further encumber the
Property for debt.

         TO HAVE AND TO HOLD the Property, and the rights and privileges hereby
deeded or intended so to be unto the Mortgagee and its successors and assigns
until the Indebtedness is fully paid and the Obligations are fully performed in
accordance with the provisions set forth herein and in the other Loan Documents,
provided that Mortgagor shall be entitled to use and occupy the Property and to
receive all rents, issues and profits thereof, all in accordance with the terms
hereof, until an Event of Default has occurred and is continuing.

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<PAGE>

         Mortgagor, for itself and its successors and assigns, further
represents, warrants, covenants and agrees with Mortgagee as follows:

         1. Warranty of Title. Mortgagor warrants to Mortgagee that it has good
and marketable fee simple absolute title to the Real Estate and Fixtures and has
the right to convey the same in accordance with the provisions set forth in this
Mortgage and that this Mortgage is a valid and enforceable first lien on the
Property, subject only to the matters shown on Schedule B to the Title Insurance
Policy referred to on Exhibit B annexed hereto and made a part hereof and to the
Liens (as defined in Section 1.1 of the Credit Agreement) described in clauses
(a) through (k) of Section 9.2 of the Credit Agreement. Mortgagor shall (a)
preserve such title and the validity and priority of the lien of this Mortgage
and shall forever warrant and defend the same unto Mortgagee against the claims
of all and every person or persons, corporation or corporations and parties
whomsoever, and (b) make, execute, acknowledge and deliver all such further or
other deeds, documents, instruments or assurances and cause to be done all such
further acts and things as may at any time hereafter be reasonably required by
Mortgagee to confirm and fully protect the lien and priority of this Mortgage.

         2. Payment of Indebtedness. a) Mortgagor shall pay the Indebtedness at
the times (subject to any applicable grace periods) and places and in the manner
specified in the Loan Documents and shall perform (subject to any applicable
grace periods) all of the Obligations in accordance with the provisions set
forth herein and in the other Loan Documents.

   b) Any payment made in accordance with the terms of this Mortgage by any
      person at any time liable for the payment of the whole or any part of the
      Indebtedness, or by any subsequent owner of the Property, or by any other
      person whose interest in the Property might be prejudiced in the event of
      a failure to make such payment, or by any stockholder, officer or director
      of a corporation or by any partner of a partnership which at any time may
      be liable for such payment or may own or have such an interest in the
      Property shall be deemed, as between Mortgagee and all persons who at any
      time may be liable as aforesaid or may own the Property, to have been made
      on behalf of all such persons.

         3. Assignment of Leases and Rents. a) Mortgagor hereby assigns to
Mortgagee, from and after the date hereof (including any period allowed by law
for redemption after any sale as provided herein), primarily, on a parity with
the Property, and not secondarily, as further security for the payment of the
Indebtedness and the performance of the Obligations, the Leases and the Rents.
Nothing contained in this Article 3 shall be construed to bind Mortgagee to the
performance of any of the terms, covenants, conditions or agreements contained
in any Lease or otherwise impose any obligation on Mortgagee (including, but
without limiting the generality of the foregoing, any liability under the
covenant of quiet enjoyment contained in any Lease in the event that any lessee
shall have been joined as a party defendant in any action commenced by reason of
an Event of Default hereunder or in the event of the sale of the Property at
foreclosure or otherwise or in the event any lessee shall have been barred and
foreclosed

                                       6
<PAGE>

of any or all right, title and interest and equity of redemption in the
Property), except that Mortgagee shall be accountable for any money actually
received pursuant to the aforesaid assignment. Mortgagor hereby further grants
to Mortgagee the right, but not the obligation during the continuation of any
Event of Default (i) to enter upon and take possession of the Real Estate for
the purpose of collecting the Rents, (ii) to dispossess by the usual summary
proceedings any lessee defaulting in making any payment due under any Lease to
Mortgagee or defaulting in the performance of any of its other obligations under
its Lease, (iii) to let the Real Estate or any portion thereof, (iv) to apply
the Rents on account of the Indebtedness, and (v) to perform such other acts as
Mortgagee is entitled to perform pursuant to this Article 3. Such assignment and
grant shall continue in effect until the entire amount of the Indebtedness shall
be paid in full and all of the Obligations shall be fully performed in
accordance with this Mortgage and the other Loan Documents, the execution of
this Mortgage constituting and evidencing the irrevocable consent of Mortgagor
to the entry upon and taking possession of the Real Estate by Mortgagee pursuant
to such grant on the terms and conditions hereof, whether or not the Property
shall have been sold at foreclosure or otherwise and without applying for a
receiver. The foregoing notwithstanding, Mortgagee grants to Mortgagor a
license, revocable at any time during the continuance of an Event of Default
after five (5) days' written notice to Mortgagor thereof, to collect all of the
Rents and to retain, use and enjoy the same and otherwise deal with the Leases
in all respects.

   b) During the continuance of an Event of Default, Mortgagor shall receive the
      Rents as set forth in Section 3(a) hereof and shall hold the right to
      receive the Rents as a trust fund to be applied in accordance with the
      terms of the Credit Agreement.

   c) During the continuance of any Event of Default hereunder, Mortgagor shall
      pay monthly any Rents received by it to Mortgagee or to such receiver, and
      upon Mortgagor's failure to do so, Mortgagor may be evicted by summary
      proceedings.

   d) Upon notice and demand, Mortgagor shall, from time to time, execute,
      acknowledge and deliver to Mortgagee, or shall cause to be executed,
      acknowledged and delivered to Mortgagee, in form satisfactory to
      Mortgagee, one or more separate assignments (confirmatory of the general
      assignment provided in this Article 3) of the lessor's interest in any
      Lease, provided that the license contained in this Section in favor of
      Mortgagor shall not be impaired by such assignments. Mortgagor shall pay
      to Mortgagee the reasonable expenses incurred by Mortgagee in connection
      with the preparation and recording of any such instrument.

         4. Further Assurances/Estoppel Certificates. Mortgagor shall do,
execute, acknowledge and deliver, at the sole cost and expense of Mortgagor, all
and every such further acts, deeds, conveyances, mortgages, deeds of trust,
assignments, estoppel certificates, notices of assignment, transfers and
assurances as Mortgagee may reasonably require from time to time in order to
better assure, convey, assign, transfer and confirm unto Mortgagee, the rights
intended to be granted to Mortgagee under this

                                       7
<PAGE>

Mortgage, any other instrument executed in connection with this Mortgage or any
other instrument under which Mortgagor may be or may hereafter become bound to
convey, mortgage or assign to Mortgagee. Mortgagor hereby appoints Mortgagee its
attorney-in-fact to execute, acknowledge and deliver for and in the name of
Mortgagor during the continuance of an Event of Default any and all of the
instruments mentioned in this Article 4, which Mortgagor fails to execute,
acknowledge and/or deliver within ten (10) business days after request therefor
is made by Mortgagee, and this power, being coupled with an interest, shall be
irrevocable as long as any part of the Indebtedness remains unpaid.

         5. Mortgagee's Right to Perform. In the event of any Event of Default
hereunder shall be continuing, Mortgagee may (but shall be under no obligation
to) at any time perform the Obligations, without waiving or releasing Mortgagor
from any Obligations or any Event of Default under this Mortgage, and, in such
event, the cost thereof, including, but without limiting the generality of the
foregoing, reasonable attorneys' fees, costs and disbursements incurred in
connection therewith, (a) shall be deemed to be Indebtedness, (b) shall be a
lien on the Property prior to any right or title to, interest in, or claim upon,
the Property subordinate to the lien of this Mortgage, and (c) shall be payable,
on demand, together with interest thereon at the Base Rate (as defined in the
Credit Agreement) plus two percent (2%), from the date of any such payment by
Mortgagee to the date of repayment to Mortgagee. No payment or advance of money
by Mortgagee pursuant to the provisions of this Article 5 shall cure, or shall
be deemed or construed to cure, any such Event of Default by Mortgagor hereunder
or waive any rights or remedies of Mortgagee hereunder or at law or in equity by
reason of any such Event of Default.

         6. Mortgagee's Costs and Expenses. If (a) Mortgagor shall fail to make
any payment of Indebtedness when the same shall be due and payable (subject to
any applicable grace period), or shall fail to perform (subject to any
applicable grace period) any of the Obligations, or (b) Mortgagee shall exercise
any of its rights or remedies hereunder, or (c) any action or proceeding is
commenced in which it becomes necessary to defend or uphold the lien or priority
of this Mortgage or any action or proceeding is commenced to which Mortgagee is
or becomes a party arising out of or related to, directly or indirectly, the
Loan (as such term is defined in the Credit Agreement), or (d) the taking,
holding or servicing of this Mortgage by or on behalf of Mortgagee is alleged to
subject Mortgagee to any civil or criminal fine or penalty then, in any such
event, all such costs, expenses and fees incurred by Mortgagee in connection
therewith (including, but without limiting the generality of the foregoing, any
civil or criminal fines or penalties and reasonable attorneys' fees, costs and
disbursements) (i) shall be deemed to be Indebtedness, (ii) shall be a lien on
the Property prior to any right or title to, interest in, or claim upon, the
Property subordinate to the lien of this Mortgage, and (iii) shall be payable,
on demand, together with interest thereon at the Base Rate (as defined in Credit
Agreement) plus two percent (2%) from the date of any such payment by Mortgagee
to the date of repayment to Mortgagee. In any action to enforce any remedy under
this Mortgage, including, but without limiting the generality of the foregoing,
sale of the Property at foreclosure or otherwise, or to recover or collect the
Indebtedness or any portion thereof, the provisions of this Article 6 with
respect to the

                                       8
<PAGE>

recovery of costs, expenses, disbursements and penalties shall prevail
unaffected by the provisions of any present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
restrictions and requirements of every governmental authority having
jurisdiction over Mortgagor or the Property with respect to the same to the
extent that the provisions of this Article 6 are not inconsistent therewith or
violative thereof.

         7. Events of Default. The occurrence of any Event of Default under (and
as defined, and particularly described in) the Credit Agreement, but subject to
the provisions thereof (regardless of the reason therefor) shall constitute an
event of default ("Event of Default") hereunder.

         8. Remedies. a) If an Event of Default shall have occurred and be
continuing, Mortgagee may declare the Indebtedness to be due and payable
immediately, and upon such declaration the Indebtedness shall immediately become
and be due and payable without demand or notice to the extent permitted by
applicable law.

   b) If an Event of Default shall have occurred and be continuing, Mortgagee
      may, after acceleration, proceed by any appropriate action or proceeding
      (i) to enforce payment of the Indebtedness or the performance of any
      Obligation; (ii) to foreclose this Mortgage; and (iii) to cumulatively
      pursue any other remedy now or hereafter available to it in equity, at
      law, by virtue of statute or otherwise.

   c) If an Event of Default shall have occurred and be continuing, the
      Mortgagee, at its election, and without notice to the Mortgagor, may, to
      preserve its interest in the Mortgaged Property, make any payments which
      Mortgagor has failed to make under any prior amount due to Mortgagee, and
      any such sums so paid shall be secured hereby and be immediately due and
      payable from Mortgagor upon demand of Mortgagee with interest thereon at
      the Base Rate (as defined in the Credit Agreement) plus two percent (2%)
      but such payment by the Mortgagee shall not release the Mortgagor from the
      Mortgagor's obligations or constitute a waiver of the Mortgagor's default
      hereunder.

   d) If an Event of Default shall have occurred and be continuing, the
      Mortgagee is authorized to foreclose this Mortgage subject to the rights
      of any purchasers or tenants, if any, of the Mortgaged Property or may
      elect which purchasers or tenants Mortgagee desires to name as parties
      defendant in such foreclosure and the failure to make any such purchasers
      or tenants parties defendant to any such foreclosure proceedings and to
      foreclose their rights will not be, nor be asserted by the Mortgagor to
      be, a defense to any proceedings instituted by the Mortgagee to collect
      the sums secured hereby or to collect any deficiency remaining unpaid
      after the foreclosure sale of the Mortgaged Property. The rights of
      Mortgagee under this subsection are subject to any contrary agreements of
      Mortgagee under any non-disturbance agreements executed by Mortgagee.

                                       9
<PAGE>

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

   f) If an Event of Default shall have occurred and be continuing, the
      Mortgagee, to the extent permitted by law and without regard to the value,
      adequacy or occupancy of the security for the indebtedness and other sums
      secured hereby, shall be entitled, as a matter of right, if it so elects,
      to cause the appointment of a receiver to enter upon and take possession
      of the Mortgaged Property and to collect all rents, income and other
      benefits thereof and apply the same as the court may direct. The expenses,
      including receiver's fees, attorney's fees, costs and agent's
      compensation, incurred pursuant to the powers herein contained shall be
      and hereby are deemed to be secured by this Mortgage. The right to enter
      and take possession of and to manage and operate the Mortgaged Property
      and to collect all rents, income and other benefits thereof, whether by a
      receiver or otherwise, shall be cumulative to any other right or remedy
      hereunder or afforded by law and may be exercised concurrently therewith
      or independently thereof. The Mortgagee shall be liable to account only
      for such rents, income and other benefits actually received by the
      Mortgagee, whether received pursuant to this paragraph or paragraph (c)
      hereof. The appointment of any receiver or other custodian
      notwithstanding, the Mortgagee shall be entitled as pledgee to the
      possession and control of any cash, deposits or instruments at the time
      held by, or payable or deliverable under the terms of this Mortgage to,
      the Mortgagee.

   g) Mortgagee shall have the power and authority to institute and maintain any
      suits and proceedings as the Mortgagee may deem advisable: (i) to prevent
      any impairment of the Mortgaged Property by any acts which may be unlawful
      or any violation of this Mortgage; (ii) to preserve or protect its
      interest in the Mortgaged Property; and (iii) to restrain the enforcement
      of or compliance with any legislation or other governmental enactment,
      rule or order that may be unconstitutional or otherwise invalid, if the
      enforcement of or compliance with such enactment, rule or order might
      impair the security hereunder or be prejudicial to the Mortgagee's
      interest.

               (i) The Mortgagor hereby agrees, to the extent permitted by law,
         that no recovery of any such judgment by the Mortgagee and no
         attachment or levy of any execution upon any of the Mortgaged Property
         or any other property shall in any way affect the lien of this Mortgage
         upon the Mortgaged Property or any part thereof or any lien, rights,
         powers or remedies of the Mortgagee hereunder, but such lien, rights,
         powers and remedies shall continue unimpaired as before.

               (ii) Any monies collected or received by the Mortgagee under this
         Section 8(g) shall be applied in the following order: (a) to the
         payment of compensation, expenses and disbursements of the agents,

                                       10
<PAGE>

         attorneys, and other representatives of the Mortgagee, (b) to the
         payment of outstanding charges, (c) to the payment of the Indebtedness
         then outstanding in such manner and order of priority or preference as
         Mortgagee may, in its sole discretion, determine and (d) the balance,
         if any, to the persons legally entitled thereto.

               (iii) The provisions of this paragraph shall not be deemed to
         limit or otherwise modify the provisions of the Credit Agreement.

   h) No delay or omission of Mortgagee or of any holder of the documents
      evidencing and/or securing the Obligations including, but not limited to,
      the Notes, to exercise any right, power or remedy accruing upon any Event
      of Default shall exhaust or impair any such right, power or remedy or
      shall be construed to waive any such Event of Default or to constitute
      acquiescence therein. Every right, power and remedy given to the Mortgagee
      shall be exercised from time to time and often as may be deemed expedient
      by the Mortgagee.

   i) If the Mortgagee: (i) grants forbearance or an extension of time for the
      payment of any sums secured hereby; (ii) takes other or additional
      security for the payment thereof; (iii) waives or does not exercise any
      right granted in the Credit Agreement, this Mortgage or any other Loan
      Document; (iv) releases any part of the Mortgaged Property from the lien
      of this Mortgage or any other instrument securing the Obligations; or (v)
      makes or consents to any agreement changing the terms of this Mortgage or
      subordinating the lien or any charge hereof, then, except as expressly
      provided by such subordination, modification, release or other written
      agreement, no such act or omission shall release, discharge, modify,
      change or affect the original liability under the Credit Agreement, the
      Notes, this Mortgage, the other Loan Documents or otherwise of the
      Mortgagor, or any subsequent purchaser of the Mortgaged Property or any
      part thereof or any maker, co-signer, endorser or surety. No such act or
      omission shall preclude the Mortgagee from exercising any right, power or
      privilege herein granted or intended to be granted in case of any Event of
      Default then existing or of any subsequent Event of Default nor, except as
      otherwise expressly provided in an instrument or instruments executed by
      the Mortgagee, shall the lien of this Mortgage be altered thereby. In the
      event of the sale or transfer by operation of law or otherwise of all or
      any part of the Mortgaged Property, the Mortgagee, without notice to any
      person, firm or corporation, is hereby authorized and empowered to deal
      with any such vendee or transferee with reference to the Mortgaged
      Property or the indebtedness secured hereby, or with reference to any of
      the terms or conditions hereof, as fully and to the same extent as it
      might deal with the original parties hereto and without in any way
      releasing or discharging any of the liabilities or undertakings hereunder.

   j) If the Mortgagee shall have proceeded to enforce any right or remedy under
      this Mortgage by foreclosure, entry or otherwise and such proceedings
      shall

                                       11
<PAGE>

      have been discontinued or abandoned for any reason, or such proceedings
      shall have resulted in a final determination adverse to the Mortgagee,
      then and in every such case to the extent not prohibited by law the
      Mortgagor and the Mortgagee shall be restored to their former positions
      and rights hereunder, and all rights, power and remedies of the Mortgagee
      shall continue as if no such proceedings had occurred or had been taken.

   k) No right, power or remedy conferred upon or reserved to the Mortgagee by
      the Credit Agreement, this Mortgage or any other Loan Document is
      exclusive of any other right, power or remedy, but each and every such
      right, power and remedy shall be cumulative and concurrent and shall be in
      addition to any other right, power and remedy given hereunder or under the
      Credit Agreement and the other Loan Documents, or now or hereafter
      existing at law, in equity or by statute.

   l) Upon the occurrence of any Event of Default hereunder, it is agreed that
      the Mortgagor, if it is an occupant of the Premises or any part thereof,
      shall upon demand by Mortgagee immediately surrender possession of the
      Premises so occupied to the Mortgagee, and if such occupant is permitted
      to remain in possession, the possession shall be as tenant of the
      Mortgagee and, on demand such occupant (a) shall pay to the Mortgagee
      monthly, in advance, a reasonable rental for the space so occupied and (b)
      in default thereof, may be dispossessed by the usual summary proceedings.
      The covenants herein contained may be enforced by a receiver of the
      Mortgaged Property or any part thereof.

         9. Security Agreement under Uniform Commercial Code. It is the
intention of Mortgagor and Mortgagee that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code of
Connecticut Statutes, and Mortgagor hereby grants to Mortgagee a security
interest in the Property. Mortgagee shall have all of the rights of a Secured
Party under the Uniform Commercial Code with respect to the Property. The filing
of a financing statement covering any of the Property in the records normally
pertaining to personal property notwithstanding, all of the Property, for all
purposes and in all proceedings, legal or equitable, shall be regarded, at
Mortgagee's option (to the extent permitted by law), as part of the Real Estate
whether or not any such item is physically attached to the Real Estate or serial
numbers are used for the better identification of certain items. The mention in
any such financing statement of any of the Property shall never be construed in
any way as derogating from or impairing this declaration and hereby stated
intention of Mortgagor and Mortgagee that such mention in the financing
statement is hereby declared to be for the protection of Mortgagee in the event
any court shall at any time hold that notice of the priority of this Mortgage,
to be effective against any third party, including the Federal government or any
authority or agency thereof, must be filed in the Uniform Commercial Code
records. Pursuant to the provisions of the Uniform Commercial Code, Mortgagor
hereby authorizes Mortgagee, without the signature of Mortgagor, to execute and
file financing and continuation statements if Mortgagee shall determine, in its
sole discretion, that such financing or continuation statements are necessary or
advisable in order to

                                       12
<PAGE>

preserve or perfect its security interest in the Fixtures covered by this
Mortgage, and Mortgagor shall pay to Mortgagee, on demand, any reasonable
expenses incurred by Mortgagee in connection with the preparation, execution and
filing of such statements that may be filed by Mortgagee.

         10. No Waivers, Etc. A failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms, covenants, conditions
and provisions hereof and Mortgagee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance by Mortgagor of
any and all of the terms, covenants, conditions and provisions of this Mortgage
to be performed by Mortgagor. Mortgagee may release, regardless of consideration
and without the necessity for any notice to or consent by the holder of any
subordinate lien on the Property, any part of the security held for payment of
the Indebtedness or any portion thereof or for the performance of the
Obligations secured by this Mortgage without, as to the remainder of the
security, in any manner whatsoever, impairing or affecting the lien of this
Mortgage or the priority of the lien of this Mortgage over any subordinate lien.
Mortgagee may resort for the payment of the Indebtedness secured by this
Mortgage to any other security therefor held by Mortgagee in such order and
manner as Mortgagee may elect.

         11. Additional Rights. The holder of any subordinate lien on the
Property shall have no right to terminate any Lease whether or not such Lease is
subordinate to this Mortgage.

         12. Waivers by Mortgagor. a) Mortgagor hereby waives all errors and
imperfections in any proceedings instituted by Mortgagee under this Mortgage,
the Credit Agreement or any other Loan Document and all benefit of any present
or future statute of limitations or any other present or future statute, law,
stay, moratorium, appraisal or valuation law, regulation or judicial decision
which, nor shall Mortgagor at any time insist upon or plead, or in any manner
whatsoever, claim or take any benefit or advantage of any such statute, law,
stay, moratorium, regulation or judicial decision which (i) provides for the
valuation or appraisal of the Property prior to any sale or sales thereof which
may be made pursuant to any provisions herein or pursuant to any decree,
judgment or order of any court of competent jurisdiction, (ii) exempts any of
the Property or any other property, real or personal, or any part of the
proceeds arising from any sale thereof from attachment, levy or sale under
execution, (iii) provides for any stay of execution, moratorium, marshalling of
assets, exemption from civil process, redemption or extension of time for
payment, (iv) requires Mortgagee to institute proceedings prior to any sale of
the Property or prior to exercising any other remedy afforded Mortgagee,
hereunder in the event of an Event of Default, or (v) conflicts with or may
affect, in a manner which may be adverse to Mortgagee, any provision, covenant,
condition or term of this Mortgage, the Credit Agreement or any other Loan
Document, nor shall Mortgagor at any time after any sale or sales of the
Property pursuant to any provision herein claim or exercise any right under any
present or future statute, law, stay, moratorium, regulation or judicial
decision to redeem the Property or the portion thereof so sold.

                                       13
<PAGE>

   b) Mortgagor hereby waives the right, if any, to require any sale to be made
      in parcels, or the right, if any, to select parcels to be sold, and there
      shall be no requirement for marshalling of assets.

         13. No Joint Venture or Partnership. Mortgagor and Mortgagee intend
that the relationship created hereunder be solely that of mortgagor and
mortgagee or borrower and lender, as the case may be. Nothing herein is intended
to create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Mortgagor and Mortgagee nor to grant Mortgagee any interest
in the Property other than that of mortgagee or lender.

         14. Notices. All notices, requests, demands or other communications
shall be in writing and as otherwise set forth in Section 12.4 of the Credit
Agreement.

         15. Inconsistency with the Loan Documents. If there shall be any
inconsistencies between the terms, covenants, conditions and provisions set
forth in this Mortgage and the terms, covenants, conditions and provisions set
forth in the Credit Agreement, then, unless this Mortgage expressly provides
otherwise, the terms, covenants, conditions and provisions of the Credit
Agreement shall prevail.

         16. Future Advances. This Mortgage secures such future or additional
advances (in addition to the Indebtedness) as may be made by the Mortgagee or
the holder hereof, at its exclusive option, to the Mortgagor or its successors
or assigns in title, for any purpose, provided that all such advances are made
within 20 years from the date of this Mortgage or within such lesser period of
time as may be provided by law as a prerequisite for the sufficiency of actual
notice or record notice of such optional future or additional advances as
against the rights of creditors or subsequent purchasers for valuable
consideration to the same extent as if such future or additional advances were
made on the date of the execution of this Mortgage. The total amount of
Indebtedness secured by this Mortgage may be increased or decreased from time to
time, and this Mortgage shall continue to secure the outstanding balance so long
as any remains so outstanding, but the total unpaid balance so secured at any
one time shall not exceed the maximum principal amount of $8,026,000.00 plus
interest thereon and any disbursements made under the Mortgage for the payment
of Charges (as defined in the Credit Agreement), insurance, or otherwise, with
interest on such disbursements. It is the intent of the parties that this
Mortgage shall secure the payment of the Indebtedness and any additional
advances made from time to time pursuant to any additional notes or otherwise,
all of said indebtedness being equally secured hereby and having the same
priority as any amounts advanced as of the date of this Mortgage. It is agreed
that any additional sum or sums advanced by Mortgagee shall be equally secured
with, and have the same priority as, the original Indebtedness and shall be
subject to all of the terms, provisions and conditions of this Mortgage, whether
or not such additional loans or advances are evidenced by other promissory notes
of Mortgagor and whether or not identified by a recital that it or they are
secured by this Mortgage.

         17. Open End Mortgage. This is an "open-end" mortgage and the holder
hereof shall have all the rights, powers and protection to which the holder of
any

                                       14
<PAGE>

open-end mortgage is entitled. It is further agreed that upon request of
Mortgagor, Mortgagee may hereafter, at its option, at any time before full
payment of this Mortgage, make further advances to Mortgagor in amounts and at
such rates of interests as Mortgagee shall determine, and every such further
advance, with interest, shall be secured by this Mortgage and evidenced by an
additional note given by Mortgagor, provided, that the amount of the principal
secured by this Mortgage and remaining unpaid shall at no time exceed the
original principal sum secured hereby and provided that the time of repayment of
such advancement shall not extend the time of repayment beyond the maturity of
the original debt hereby secured.

         18. No Modification; Binding Obligations. This Mortgage may not be
modified, amended, discharged or waived in whole or in part except by an
agreement in writing signed by Mortgagor and Mortgagee. The covenants of this
Mortgage shall run with the Land and shall bind Mortgagor and the heirs,
distributees, personal representatives, successors and assigns of Mortgagor and
all present and subsequent encumbrancers, lessees and sublessees of any of the
Property and shall inure to the benefit of Mortgagee and its respective
successors, assigns and endorsees.

         19. [INTENTIONALLY OMITTED]

         20. Miscellaneous. The Article headings in this Mortgage are used only
for convenience and are not part of this Mortgage and are not to be used in
determining the intent of the parties or otherwise in interpreting this
Mortgage. All capitalized words not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement. As used in this Mortgage, the
singular shall include the plural as the context requires and the following
words and phrases shall have the following meanings: (a) "provisions" shall mean
"provisions, terms, covenants and/or conditions"; (b) "lien" shall mean "lien,
charge, encumbrance, security interest, mortgage and/or deed of trust"; (c)
"obligation" shall mean "obligation, duty, covenant and/or condition"; (d) "any
of the Property" shall mean "the Property or any portion thereof or interest
therein"; and (e) "Person" shall mean "any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including, but
without limiting the generality of the foregoing, any instrumentality division,
agency, body or department thereof)". Any act which Mortgagee is permitted to
perform under this Mortgage, the Credit Agreement or any other Loan Document may
be performed at any time and from time to time by Mortgagee or by any person or
entity designated by Mortgagee. Each appointment of Mortgagee as
attorney-in-fact for Mortgagor under this Mortgage, the Credit Agreement or any
other Loan Document shall be irrevocable and coupled with an interest for so
long as any sum secured hereby remains unpaid.

         21. Enforceability. This Mortgage shall be governed by, and construed
in accordance with, the laws of Connecticut without regard to principles of
conflicts of laws, except that the laws of the State of New York (without regard
to principles of conflicts of laws) shall govern the resolution of issues
arising under the Credit Agreement to the extent that such resolution is
necessary to the interpretation of

                                       15
<PAGE>

this Mortgage. Whenever possible, each provision of this Mortgage shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Mortgage shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
Mortgage. Nothing in this Mortgage or in any other Loan Documents shall require
Mortgagor to pay, or Mortgagee to accept, interest in an amount which would
subject Mortgagee to penalty under applicable law. In the event that the payment
of any interest due hereunder or under any of the other Loan Documents or a
payment which is deemed interest, exceeds the maximum amount payable as interest
under the applicable usury laws, such excess amount shall be applied to the
reduction of the Indebtedness, and upon payment in full of the Indebtedness,
shall be applied to the performance of the Obligations, and upon performance in
full of the Obligations, shall be deemed to be a payment made by mistake and
shall be refunded to Mortgagor.

         22. Receipt of Copy. Mortgagor acknowledges that it has received a true
copy of this Mortgage.

         23. Stamp Taxes. Should any stamp tax, intangible tax, or other tax,
now or hereafter become payable with respect to this Mortgage, the Indebtedness,
or any of the documents executed in connection herewith, Mortgagor shall pay the
same prior to the due date thereof and shall indemnify and hold Mortgagee
harmless from the cost of the same. Within 15 days after the payment of such
stamps or other taxes, Mortgagor shall deliver to Mortgagee a receipt issued by
the appropriate governmental authority showing the payment in full of such
stamps or taxes.

         24. Additional Provisions Concerning Receivers. In addition to the
provisions contained in Section 8(f), Mortgagor specifically agrees that if an
Event of Default shall have occurred and be continuing, Mortgagee, upon
application to a court of competent jurisdiction, as a matter of strict right
without notice and without regard to the occupancy or value of the Property or
the solvency of any party bound for payment of the obligations secured hereby,
without any showing of fraud or mismanagement on the part of the Mortgagor, and
without the necessity of filing any judicial or other proceeding other than the
proceeding for appointment of a receiver, shall be entitled to the appointment
of a receiver to take possession and to operate the Property and to collect and
apply the rents and proceeds thereof. Upon request of the Mortgagee, the court
making such appointment may confer upon the receiver any of the rights or powers
granted to the Mortgagee in this Mortgage. The Mortgagee, in its discretion but
without any obligation to do so, may make such advances to the receiver as the
Mortgagee may deem necessary or appropriate for the proper administration of the
receivership, and all such advances shall be deemed to be Indebtedness payable
as provided in Section 6 of this Mortgage.

         25. Waiver of Jury Trial. MORTGAGOR AND MORTGAGEE HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
MORTGAGE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE

                                       16
<PAGE>

EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN
ANY WAY RELATING TO THE MORTGAGED PROPERTY (INCLUDING, WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THIS MORTGAGE, AND ANY CLAIMS OR DEFENSES ASSERTING
THAT THIS MORTGAGE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE);
THIS WAIVER BEING A MATERIAL INDUCEMENT FOR MORTGAGEE TO ACCEPT THIS MORTGAGE.

         26. Restrictions on Sale. The Credit Agreement contains restrictions on
the sale of the Property. This Mortgage may not be assumed by any purchaser of
the Property in violation of those restrictions.

         27. Duplicate Originals; Counterparts. This Mortgage may be executed in
any number of duplicate originals, and each duplicate original shall be deemed
to be an original. This Mortgage may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Mortgage.

            [The remainder of this page is intentionally left blank.]

                                       17
<PAGE>

         IN WITNESS WHEREOF, Mortgagor and Mortgagee have caused this Mortgage
to be duly executed and acknowledged under seal the day and year first above
written.

[(Corporate Seal)]                         MORTGAGOR:
                                           ----------

                                           FINLAY FINE JEWELRY CORPORATION,
                                           a Delaware corporation

Signed, Sealed and                         By: /s/ Bruce E. Zurlnick
Delivered in our                               ---------------------
Presence:                                        Name: Bruce E. Zurlnick
                                                 Title: Sr. V.P. & CFO

      /s/ Benjamin E. Romero
      ---------------------------------
      Print Name: Benjamin E. Romero

      /s/ Gladys G. Leibowitz
      ---------------------------------
      Print Name: Gladys G. Leibowitz

[(Corporate Seal)]                         MORTGAGEE:
                                           ----------

                                           GENERAL ELECTRIC CAPITAL CORPORATION,
                                           a Delaware corporation

Signed, Sealed and                         By: /s/ Charles D. Chiodo
Delivered in our                               ---------------------
Presence:                                        Name: Charles D. Chiodo
                                                 Title: Authorized Signatory

      /s/ Victor Verazaln
      ---------------------------------
      Print Name:  Victor Verazaln

      /s/ Sean McWhinnie
      ---------------------------------
      Print Name:  Sean McWhinnie

<PAGE>

STATE OF NEW YORK         )
                          )
COUNTY OF NEW YORK        )

         Personally appeared before me this 14th day of February 2003, Bruce E.
Zurlnick, the Senior Vice President and Chief Financial Officer of FINLAY FINE
JEWELRY CORPORATION, a Delaware corporation, on behalf of said corporation and
acknowledged the same to be his/her free act and deed and the free act and deed
of such corporation. He/she is personally known to me or has produced a license
as identification.

( S E A L )
                                           Bonni G. Davis
                                           -------------------------------------

                                           Notary Public in and for the State of

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

My Commission Expires:                     Print Name of Notary:

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

                                           BONNI G. DAVIS ESQ.
                                           Notary Public, State of New York
                                             No. 02DA4873213
                                             Qualified in New York County
                                           Commission Expires September 15, 2006

                                       N-1

<PAGE>

STATE OF NEW YORK          )
                           )
COUNTY OF NEW YORK         )

         Personally appeared before me this 18 day of February 2003, Charles D.
Chiodo, the Duly Authorized Signatory of GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, on behalf of said corporation and acknowledged the same to
be his/her free act and deed and the free act and deed of such corporation.
He/she is personally known to me or has produced a license as identification.

( S E A L )                                Lauren C. Pessy
                                           ---------------

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

                                           Notary Public in and for the State of
                                            Connecticut
                                           -------------------------------------

My Commission Expires:                     Print Name of Notary:

 12/31/2005                                Lauren C. Pessy
----------------------------------         -------------------------------------

                                           LAUREN C. PESSY
                                           Notary Public
                                           State of Connecticut
                                           Commission Expires: December 31, 2005

                                       N-2

<PAGE>

                                    EXHIBIT A

                             Description of the Land

            All that certain piece or parcel of land, with the buildings and
improvements thereon, situated in the Town of Orange, County of New Haven and
State of Connecticut, and in the rear of Prindle Hill Road, bounded:

WEST:       1000.87 feet by a straight line which is a portion of the East Line
            of property conveyed by Ernest Cuzzocreo and Raymond Cuzzocreo to
            the Town of Orange for the purpose of having the Town take steps to
            make the same a public highway and legally accept it as such by the
            Town. The northerly end of said West bound is determined as follows:
            Commencing at a point in the South line of Prindle Hill Road, which
            point is distant 3076.01 feet west of the Northeast corner of land
            now or formerly of Raymond Cuzzocreo, when measured along the South
            line of Prindle Hill Road; thence proceeding West and Southwest
            along the arc of a curve being concave to the Southeast, having a
            radius of 50 feet and a central angle of 94 degrees, 12 minutes a
            distance of 82.20 feet; thence proceeding South 15 degrees, 31
            minutes, .00 seconds West along other land now or formerly of
            Raymond Cuzzocreo and Ernest Cuzzocreo, a distance of 597.58 feet in
            a straight line to a point, which point is the northerly end of said
            West bound.

NORTH:      by other land now or formerly of Ernest Cuzzocreo, 522.55 feet, by a
            straight line running South 76 degrees, 35 minutes, 9 seconds East;

            by other land now or formerly of said Ernest Cuzzocreo, 995.60 feet,
            by a straight line running South 15 degrees, 31 minutes, .00 seconds
            West; and

SOUTH:      by land now or formerly of one Capecalatro, 522.87 feet, more or
            less.

            Said premises are together with the terms of a Right-of-Way Lease
Agreement made by and between Ernest J. Cuzzocreo and Burndy Corporation dated
July 15, 1982 and recorded in Volume 281 at Page 720 of the Orange Land Records,
as affected by an assignment dated August 26, 1983 and recorded in Volume 255 at
Page 1086 of said Land Records, an Assumption of Lessee's Obligations Under
Right of Way Agreement dated April 15, 1985 and recorded in Volume 297 at Page
656 of said Land Records, a Modification of Right of Way Agreement dated April
15, 1985 and recorded in Volume 297 at Page 659 of said Land Records, an
Assignment and Assumption of Right of Way Agreement dated April 15, 1985 and
recorded in Volume 297 at Page 663 of said Land Records, and a Consent to
Assignment dated April 16, 1985 and recorded in Volume 297 at Page 667 of said
Land Records.

                                       B-1

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