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<SEC-DOCUMENT>0001094891-02-000264.txt : 20020627
<SEC-HEADER>0001094891-02-000264.hdr.sgml : 20020627
<ACCEPTANCE-DATETIME>20020627164718
ACCESSION NUMBER:		0001094891-02-000264
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		13
CONFORMED PERIOD OF REPORT:	20020625
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20020627

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CPI AEROSTRUCTURES INC
		CENTRAL INDEX KEY:			0000889348
		STANDARD INDUSTRIAL CLASSIFICATION:	AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728]
		IRS NUMBER:				112520310
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11398
		FILM NUMBER:		02689542

	BUSINESS ADDRESS:	
		STREET 1:		200A EXECUTIVE DR
		CITY:			EDGEWOOD
		STATE:			NY
		ZIP:			11717
		BUSINESS PHONE:		5165865200
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>cpi8k-6252002.txt
<DESCRIPTION>CPI 8K FOR 6-25-2002
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                    FORM 8-K
                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


 Date of Report (Date of earliest event reported)             June 25, 2002
                                                              -------------


                            CPI AEROSTRUCTURES, INC.
               (Exact Name of Registrant as Specified in Charter)



       New York                      1-11398                   11-2520310
- ----------------------------        ------------             ---------------
(State or Other Jurisdiction        (Commission              (IRS Employer
    of Incorporation)               File Number)             Identification No.)




200A Executive Drive, Edgewood, New York                     11717
- ----------------------------------------                     ------
(Address of Principal Executive Offices)                   (Zip Code)



Registrant's telephone number, including area code    (631) 586-5200
                                                      --------------



                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)






<Page>



ITEM 5.  OTHER EVENTS

         On June 25, 2002, CPI Aerostructures, Inc. (the "Company") and its
wholly-owned subsidiary, Kolar, Inc. ("Kolar", and together with the Company,
the "Borrowers") signed the Amended and Restated Credit Agreement with the
several banks and other financing institutions or entities from time to time
parties thereto and JPMorgan Chase Bank, as Administrative Agent ("JPMorgan"),
restructuring their original debt facilities with JPMorgan (formerly known as
Chase Manhattan Bank) and GE Capital CFE, Inc. (as assignee of Mellon Bank,
N.A.).

         Under the Amended and Restated Credit Agreement, one tranche ("Tranche
A") of the senior bank loans will be amortized at an amount beginning at $50,000
per month, increasing to $100,000 during the term, with a final payment of the
balance due on June 30, 2003. The aggregate principal amount of the Tranche A
loan currently outstanding is $2,631,570.

         A second tranche ("Tranche B"), the amount representing the remaining
mortgage debt from the Kolar properties, will be repaid in monthly installments
accordance with the terms of the original Credit Agreement, with a final payment
on September 30, 2007. The aggregate remaining principal amount of the Tranche B
loan is $275,462.

         A third tranche ("Tranche C"), the amount representing the net
deficiency arising from the sale of certain equipment previously leased to Kolar
by JPMorgan Leasing, Inc. (formerly Chase Equipment Leasing, Inc.), an affiliate
of JPMorgan, will be amortized at $20,000 per month, with a final payment on
June 30, 2003. The aggregate remaining principal amount of the Tranche C loan is
$704,484.

         In 1997, the Borrowers entered into a purchase money note agreement
with Kolar Machine, Inc, (now known as Ralok, Inc. ("Ralok")) in the principal
amount of $4,000,000. The note issued was originally due on June 30, 2002 and is
secured by a security interest on all of the assets of the Borrowers that is
subordinate to the security interest of the bank lenders. The note is currently
convertible, at Ralok's option, into 333,334 shares of Common Stock of the
Company. Pursuant to the terms of the subordination agreement between the bank
lenders and Ralok, Ralok was prohibited from receiving current payments of
interest on its note. As amended, the subordinated note issued in connection
with the Kolar acquisition will mature ninety days after the maturity of the
bank loans but not later than September 30, 2007. Until then, it will continue
to accrue interest, which will be compounded monthly and paid at maturity
together with the principal amount. As of June 30, 2002, $898,035 of unpaid
interest will have accrued.

                                       2
<Page>

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.


         (c)      Exhibits

         10.43    Amended and Restated Credit Agreement, among the Borrowers,
                  the Lenders and JPMorgan, dated June 25, 2002.

         10.44    Form of Replacement Term Note, between Kolar and JPMorgan,
                  dated June 25, 2002.

         10.45    Tranche C Intercreditor and Subordination Agreement, among the
                  Lenders, the Borrowers and JPMorgan, dated June 25, 2002.

         10.46    Tranche C Term Note, among the Borrowers and JPMorgan, dated
                  June 25, 2002.

         10.47    Amendment to Intercreditor and Subordination Agreement, among
                  the Subordinated Lenders (as therein defined), the Borrowers
                  and JPMorgan, dated June 25, 2002.

         10.48    Amendment to Guarantee and Collateral Agreement among the
                  Borrowers and JPMorgan, dated June 25, 2002.

         10.49    Tranche C Mortgage, Fixture Filing and Assignment of Leases
                  and Rents, between Kolar and JPMorgan, dated June 25, 2002.

         10.50    Amendment to Security Agreement, between the Borrowers and
                  Ralok, dated June 25, 2002.

         10.51    Amended and Restated Seller Note, between the Borrowers and
                  Ralok, dated June 25, 2002.

         10.52    CPI Seller Guaranty Amendment, among CPI and Ralok, dated June
                  25, 2002.

         10.53    Seller Mortgage Subordination Agreement, between Ralok and
                  JPMorgan, dated June 25, 2002.

         10.54    Mortgage Modification Agreement, between Kolar and JPMorgan,
                  dated June 25, 2002.

                                       3
<Page>



                                    SIGNATURE


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


Dated:   June 26, 2002                              CPI AEROSTRUCTURES, INC.



                                                    By:      /s/ Edward J. Fred
                                                             -------------------
                                                             Edward J. Fred
                                                             President and Chief
                                                             Financial Officer


                                       4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>3
<FILENAME>cpi8k-6252002_1043.txt
<DESCRIPTION>RESTATED CREDIT AGREEMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.43


                                  $3,611,517.41

                      AMENDED AND RESTATED CREDIT AGREEMENT

                                      among

                            CPI AEROSTRUCTURES, INC.

                                       and

                                   KOLAR, INC.
                                  as Borrowers,

                               The Several Lenders
                        from Time to Time Parties Hereto,
                                       and
                               JPMorgan Chase Bank
                             as Administrative Agent



                            Dated as of June 25, 2002



<Page>

<Table>
<Caption>

                                TABLE OF CONTENTS

                                                                                                               Page
<S>          <C>                                                                                                <C>

SECTION 1.    DEFINITIONS.........................................................................................2

1.1           Defined Terms.......................................................................................2
1.2           Other Definitional Provisions......................................................................16

SECTION 2.    RESTATEMENT OF LOANS AND TERMS OF REPAYMENT........................................................16

2.1           Loans..............................................................................................16
2.2           Repayment of Loans.................................................................................17
2.3           Fees...............................................................................................18
2.4           Optional Prepayments...............................................................................18
2.5           Mandatory Prepayments..............................................................................18
2.6           Application of Prepayments.........................................................................19
2.7           Interest Rates and Payment Dates...................................................................19
2.8           Late Payment.......................................................................................19
2.9           Interest After Event of Default....................................................................20
2.10          Computation of Interest............................................................................20
2.11          Pro Rata Treatment; Application of Certain Prepayments.............................................20
2.12          Taxes..............................................................................................21

SECTION 3.    REPRESENTATIONS AND WARRANTIES.....................................................................22

3.1           Financial Condition................................................................................22
3.2           No Change..........................................................................................22
3.3           Corporate Existence, Compliance with Law...........................................................22
3.4           Corporate Power; Authorization, Enforceable Obligations............................................23
3.5           No Legal Bar.......................................................................................23
3.6           No Material Litigation.............................................................................23
3.7           No Default.........................................................................................23
3.8           Ownership of Property; Liens.......................................................................24
3.9           Intellectual Property..............................................................................24
3.10          Taxes..............................................................................................24
3.11          Federal Regulations................................................................................24
3.12          Labor Matters......................................................................................24
3.13          ERISA..............................................................................................24
3.14          Investment Company Act; Other Regulations..........................................................25
3.15          Subsidiaries.......................................................................................25
3.16          Environmental Matters..............................................................................25
3.17          Accuracy of Information, etc.......................................................................26
3.18          Security Documents.................................................................................27
3.19          Solvency...........................................................................................27
3.20          Senior Indebtedness................................................................................27
3.21          Regulation H.......................................................................................27

SECTION 4.    CONDITIONS PRECEDENT...............................................................................27

                                        i
<Page>


SECTION 5.    AFFIRMATIVE COVENANTS..............................................................................30

5.1           Financial Statements...............................................................................30
5.2           Certificates; Other Information....................................................................30
5.3           Payment of Obligations.............................................................................31
5.4           Conduct of Business and Maintenance of Existence, etc..............................................31
5.5           Maintenance of Property, Insurance.................................................................32
5.6           Inspection of Property, Books and Records; Discussions.............................................32
5.7           Notices............................................................................................33
5.8           Environmental Laws.................................................................................33
5.9           Additional Collateral, etc.........................................................................33

SECTION 6.    NEGATIVE COVENANTS.................................................................................34

6.1           Financial Condition Covenants......................................................................35
6.2           Limitation on Indebtedness.........................................................................35
6.3           Limitation on Liens................................................................................36
6.4           Limitation on Fundamental Changes..................................................................37
6.5           Limitation on Sale of Assets.......................................................................37
6.6           Limitation on Dividends............................................................................37
6.7           Limitation on Capital Expenditures.................................................................37
6.8           Limitation on Investments, Loans and Advances......................................................37
6.9           Limitation on Payments and Modifications with respect to Seller Note, Seller Security Documents....38
6.10          Limitation on Transactions with Affiliates.........................................................38
6.11          Limitation on Sales and Leasebacks.................................................................38
6.12          Limitation on Changes in Fiscal Periods............................................................38
6.13          Limitation on Negative Pledge Clauses..............................................................38
6.14          Limitation on Restrictions on Subsidiary Distributions.............................................38
6.15          Limitation on Lines of Business....................................................................39
6.16          Limitation on Change in Accounting Treatment.......................................................39

SECTION 7.    EVENTS OF DEFAULT..................................................................................39


SECTION 8.    THE ADMINISTRATIVE AGENT...........................................................................42

8.1           Appointment........................................................................................42
8.2           Delegation of Duties...............................................................................42
8.3           Exculpatory Provisions.............................................................................42
8.4           Reliance by Administrative Agent...................................................................43
8.5           Notice of Default..................................................................................43
8.6           Non-Reliance on Administrative Agent and Other Lenders.............................................43
8.7           Indemnification....................................................................................44
8.8           Administrative Agent in Its Individual Capacity....................................................44
8.9           Successor Administrative Agent.....................................................................45
8.10          Authorization to Release Liens.....................................................................45

                                       ii
<Page>

SECTION 9.    PRIOR GUARANTEE....................................................................................45

9.1           Continued Effect of Prior Guarantee................................................................45
9.2           CPI and Kolar, Inc. as Co-Borrowers................................................................45
9.3           No Subrogation Contribution, Reimbursement or Indemnity............................................46

SECTION 10.   MISCELLANEOUS......................................................................................46

10.1          Amendments and Waivers.............................................................................46
10.2          Notices............................................................................................47
10.3          No Waiver; Cumulative Remedies.....................................................................48
10.4          Survival of Representations and Warranties.........................................................48
10.5          Payment of Expenses and Taxes......................................................................48
10.6          Successors and Assigns; Participations and Assignments.............................................49
10.7          Adjustments; Set-off...............................................................................51
10.8          Counterparts.......................................................................................52
10.9          Severability.......................................................................................52
10.10         Integration........................................................................................52
10.11         GOVERNING LAW......................................................................................52
10.12         Submission To Jurisdiction, Waivers................................................................52
10.13         Acknowledgements...................................................................................53
10.14         WAIVERS OF JURY TRIAL..............................................................................53
</Table>


                                       iii


<Page>


A.

SCHEDULES:

1.1               Schedule of Loans
6.3(f)            Existing Liens


EXHIBITS:

A.       Form of Replacement Term Note (Tranche A)
B.       Tranche C Intercreditor and Subordination Agreement
C.       Tranche C Term Note
D.       Amendment to Seller Intercreditor and Subordination Agreement
E.       Amendment to Guarantee and Collateral Agreement
F.       Closing Certificate
G.       Legal Opinion of Graubard Miller
H.       Mortgage, Fixture Filing and Assignment of Leases And Rents (Tranche C
         Mortgage)
I.       Amendment to Security Agreement between the Seller and the
         Administrative Agent
J.       Amended and Restated Seller Note
K.       CPI Seller Guaranty Amendment
L        Seller Mortgage Subordination Agreement
M.       Mortgage Modification Agreement
N.       Form of Assignment and Acceptance
O.       Form of Compliance Certificate

                                       iv
<Page>


         AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 25, 2002, among
CPI AEROSTRUCTURES, INC., a New York corporation ("CPI"), KOLAR, INC., a
Delaware corporation (collectively with CPI, the "Borrowers"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), and JPMORGAN CHASE BANK, as Administrative Agent.

                                    RECITALS

         A. The Borrowers and JP Morgan Chase Bank (formerly known as Chase
Manhattan Bank) as Administrative Agent heretofore entered into a Credit
Agreement as amended by the amendments referred to in Recital C below (the
"Original Credit Agreement") dated as of October 9, 1997, pursuant to which
Chase Manhattan Bank and Mellon Bank, N.A as Lenders ("Original Lenders") made
certain term loans to Kolar, Inc., designated therein as "Tranche A Term Loans"
and "Tranche B Term Loans" in amounts aggregating $10,375,000. CPI guaranteed
Kolar, Inc.'s obligations under the Tranche A and Tranche B Term Loans. CPI's
obligations as guarantor are secured under a Guarantee and Collateral Agreement
dated October 9, 1997 as the same is being amended contemporaneously herewith.

         B. As permitted under the original Credit Agreement, the Original
Lenders provided lines of credit ("Line of Credit Loans") to CPI and Kolar, Inc.
as co-borrowers, originally aggregating $1,000,000, and increasing to $1,700,000
pursuant to the Eighth Amendment to the Original Credit Agreement dated October
30, 2001, each such Line of Credit Loan constituting a "Permitted Line of
Credit" as defined under Section 6.2(e) of the Original Credit Agreement.

         C. The Original Credit Agreement has been amended pursuant to ten
separate Amendments and observance of certain terms of the Original Credit
Agreement has been waived pursuant to certain waivers and other writings,
pursuant to which, among other matters, the repayment terms applicable to the
Tranche A Term Loans have been changed.

         D. GECapital CFE, Inc. is the Assignee of Mellon Bank, N.A. with
respect to the portion of the Tranche A Term Loan, the Tranche B Term Loan and
the Line of Credit Notes originally held by Mellon Bank as the same have been
reduced by payments thereon.

         E. JPMorgan Chase Bank as assignee of JPMorgan Leasing, Inc., (formerly
Chase Equipment Leasing, Inc.), an affiliate of JPMorgan Chase Bank, as
equipment lessor to Kolar, Inc., is the holder of indebtedness of Kolar, Inc. in
the principal amount of $704,484.41 representing the net deficiency ("Deficiency
Debt") arising from the sale by such affiliate of certain equipment previously
leased to Kolar, Inc.; and the Lenders and the Borrowers have agreed that the
Deficiency Debt shall be included within this Amended and Restated Credit
Agreement and shall be secured by the assets of the Borrowers, subordinated and
junior in right of payment, however, to the payment of the Tranche A and Tranche
B Term Loans.

<Page>

         F. The Lenders and the Borrowers have agreed, pursuant to this Amended
and Restated Credit Agreement, to restructure all of the outstanding
indebtedness of the Borrowers (1) under the Original Credit Agreement (in the
case of CPI whether such indebtedness arises out of its status as a co-borrower
under the Permitted Lines of Credit or as a guarantor of the Tranche A and
Tranche B Term Loans) and (2) under the Deficiency Debt, which shall constitute
a Tranche C Term Loan under this Amended and Restated Credit Agreement.

         G. The holder of the Seller Note (as defined below) which has been
subordinated and junior in right of payment to the Tranche A and Tranche B Term
Loans and Line of Credit Loans, has agreed that (1) all accrued and unpaid
interest and future interest installments shall continue to accrue on the Seller
Note and (2) the Seller Note shall continue to be so subordinated and junior in
right of payment and in addition shall be subordinated and junior in right of
payment to the Deficiency Debt.

           NOW, THEREFORE, the parties hereto hereby agree as follows:

                             SECTION 1. DEFINITIONS

         1.1 Defined Terms. As used in this Agreement the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

         "ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. Any change in the ABR due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.

         "Administrative Agent": JPMorgan Chase Bank, together with its
affiliates, as the arranger of the Commitments and as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.

         "Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

         "Agreement": this Amended and Restated Credit Agreement, as hereafter
amended, supplemented or otherwise modified from time to time.

         "Alternative Note": as defined in Section 10.6(f).

                                        2
<Page>

         "Alternative Noteholder": as defined in Section 10.6(f).

         "Applicable Margin": for each Tranche A Term Loan and the Tranche C
Term Loan, three and one-half percent (3 1/2 %).

         "Asset Sale": any Disposition of Property by either Borrower or any of
its Subsidiaries (excluding any such Disposition permitted by clause (a), (b) or
(c) of Section 6.5).

         "Assignee": as defined in Section 10.6(c).

         "Assignor": as defined in Section 10.6(c).

         "Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).

         "Borrower": the collective reference to CPI and Kolar, Inc. unless used
with reference to a particular Borrower.

         "Business": as defined in Section 3.17.

         "Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.

         "Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements and fixed assets acquired under capital leases during such period)
which should be capitalized under GAAP on a consolidated balance sheet of such
Person and its Subsidiaries.

         "Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.

         "Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

         "Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
Dollar-denominated certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less from
the date of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof having
combined capital and surplus of not less than $1,000,000,000; (c) commercial
paper of an issuer rated at least A-1 by Standard & Poor's Ratings Services
("S&P") or at least P-1 by Moody's Investors Service, Inc. ("Moody's"), if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) tax exempt securities maturing within one year from the date of acquisition
and rated at least A by S&P or at least A2 by Moody's; and (e) money market
funds that invest substantially exclusively in investments of the type described
above and that have aggregate assets of at least $2,500,000,000.

                                        3
<Page>

         "Closing Date": the date of execution of this Amended and Restated
Credit Agreement.

         "Code": the Internal Revenue Code of 1986, as amended from time to
time.

         "Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.

         "Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment and the Tranche B Term Loan Commitment of such Lender.

         "Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.

         "Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit O.

         "Consolidated Net Income": for any period, the consolidated net income
(or loss) of CPI and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of CPI
or is merged into or consolidated with CPI or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary of CPI) in which CPI
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by CPI or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of CPI to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary to either Borrower is not at the time
`permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.

                                        4
<Page>

         "Consolidated Tangible Net Worth": as of any date, Consolidated Net
Worth after deducting therefrom the following: (a) any surplus resulting from
the write-up of assets subsequent to December 31, 1996; (b) goodwill, including,
without limitation, any amounts (however designated on the balance sheet)
representing the cost of acquisitions in excess of underlying tangible assets or
capitalized transaction costs; (c) patents, trademarks, copyrights and other
Intellectual Property; (d) leasehold improvements not recoverable at the
expiration of a lease; and (e) deferred charges (including, but not limited to,
unamortized debt discount and expense, organization expenses and experimental
and development expenses).

         "Continuing Directors": the directors of CPI on the Closing Date, and
each other director, if, in each case, such other director's nomination for
election to the board of directors of CPI is recommended by at least 66-2/3% of
the then Continuing Directors.

         "Contractual Obligations": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.

         "Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

         "Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Dispose of" shall have correlative meanings.

         "Dollars" and "$": dollars in lawful currency of the United States of
America.

         "EBITDA" shall mean, with respect to the Borrowers for any period,
consolidated net income from operations (before interest, taxes, depreciation
and amortization), determined in accordance with GAAP and in a manner consistent
with the financial statements included in the report of CPI to the Securities
and Exchange commission on Form 10-K for the fiscal year ended December 31,
2001.

         "Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

         "ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.

         "Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

         "Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Reference
Lender from three federal funds brokers of recognized standing selected by it.

                                        5
<Page>

         "Fixed Charges" shall mean, for any fiscal period with respect to
Borrowers and their Subsidiaries on a consolidated basis, the aggregate of all
Interest Charges paid or accrued during such period plus (a) scheduled payments
of principal with respect to Indebtedness during such period, plus (b) the
unfinanced portion of Capital Expenditures during such period, plus (c) rental
charges paid or accrued with respect to leased real and personal property and
equipment during such period to the extent not deducted in computing EBITDA.

         "Fixed Charges Coverage Ratio": shall mean, with respect to Borrowers
and their Subsidiaries on a consolidated basis for any fiscal period, the ratio
of EBITDA to Fixed Charges.

         "GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board and the rules and regulations of the
Securities and Exchange Commission, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of CPI as of the date of
determination, except that for purposes of Section 6.1, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the most recent audited financial statements
delivered pursuant to Section 11(b). In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then CPI and the Administrative Agent agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
CPI's financial condition shall be the same after such Accounting Changes as if
such Accounting Changes had not been made. Until such time as such an amendment
shall have been executed and delivered by CPI, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" refers to changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the Securities and Exchange
Commission (or successors thereto or agencies with similar functions).

         "Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
(including, without limitation, the National Association of Insurance
Commissioners).


                                        6
<Page>


         "Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement originally dated as of October 9, 1997, as the same is being amended
as of the date hereof and as the same may be further amended, supplemented or
otherwise modified from time to time.

         "Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, (iv)
under any take-or-pay contract or (v) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof, provided,
however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.

         "Guarantor": each person at any time having an obligation as a
guarantor under the Guarantee and Collateral Agreement.

         "Incur" and "Incurrence": as defined in Section 6.2.

         "Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than
current trade payables Incurred in the ordinary course of such Person's
business) or relating to advance or progress payments, (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party under acceptance, letter of
credit or similar facilities (g) all obligations of such Person, contingent or
otherwise, to purchase, redeem retire or otherwise acquire for value any Capital
Stock (other than common stock) of such Person, (h) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above; and (i) all obligations of the kind referred to in clauses
(a) through (h) above secured by (or for which the holder of such obligation has
an existing right contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable for the
payment of such obligation.

                                        7
<Page>

         "Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.

         "Insolvent": pertaining to a condition of Insolvency.

         "Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

         "Interest Payment Date": the last Business Day of each calendar month,
commencing with June,  , 2002.

         "Kolar, Inc. Liquidation": the disposition by Kolar, Inc. of its
remaining assets constituting (i) Collateral under the Guarantee and Collateral
Agreement and (ii) Mortgaged Properties (x) under the Prior Mortgage and (y)
under the Tranche C Mortgage.

         "Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).

         "Line of Credit Loans": as defined in Recital B.

         "Loan": any Tranche A Term Loan, or Tranche B Term Loan or Tranche C
Term Loan.

         "Loan Documents": this Agreement, the Security Documents and the Notes.

                                        8
<Page>

         "Loan Parties": each of the Borrowers and each Subsidiary of a Borrower
which hereafter becomes is a party to a Loan Document.

         "Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, operations, condition (financial or otherwise) or
prospects of CPI and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.

         "Material Environmental Amount": an amount payable by CPI and/or its
Subsidiaries in excess of $25,000 for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any combination
thereof.

         "Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.

         "Mortgage Modification Agreement" means an Amendment to the Prior
Mortgage to reflect an increase in the amount secured thereby to the amount of
the Tranche A Loan, in the form appended hereto as Exhibit M.

         "Mortgaged Properties": the real properties currently owned by Kolar,
Inc. listed as parcels A and B on Schedule A to the Prior Mortgage and the
Tranche C Mortgage.

         "Mortgages": each of the mortgages and deeds of trust made by any Loan
Party, in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, including (x) the Prior Mortgage as amended by the Prior
Mortgage Amendment and the Tranche C Mortgage, as each of the the same may be
amended, supplemented or otherwise modified from time to time.

         "Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

         "Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually Incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
Incurrence of loans, the cash proceeds received from such issuance or
Incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually Incurred in connection therewith.

                                        9
<Page>

         "Non-Excluded Taxes": as defined in Section 2.10(a).

         "Non-U.S. Lender": as defined in Section 2.10(b).

         "Notes": the collective reference to any promissory note evidencing
Loans.

         "Obligations": the unpaid principal of and interest on the Loans
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to either Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Interest Rate Protection Agreements, any affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter Incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, or any Interest Rate Protection
Agreement entered into with any Lender or any affiliate of any Lender or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all fees, charges
and disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by either Borrower pursuant hereto) or otherwise.

         "Original Credit Agreement" as defined in Paragraph A of the Recitals.

         "Participant": as defined in Section 10.6(b).

         "PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).

         "Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

         "Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.

         "Prepayment Premium": for any prepayment of a Tranche B Term Loan, a
premium (as liquidated damages and not as penalty) equal to (a) in the case of
any such prepayment made within the one year period prior to the final stated
maturity date (the "Maturity Date") of the Tranche B Term Loans, all reasonable
losses, expenses and liabilities (including, without limitation, any interest
paid by the relevant Lender to lenders of funds borrowed by it to make or carry
its Tranche B Term Loan and losses sustained by the relevant Lender in
connection with the re-employment of such funds) which the relevant Lender may
Incur with respect to its Tranche B Term Loan, or (b) in the case of any such
prepayment made earlier than one year prior to the Maturity Date, the sum of the
present values, each determined at the appropriate Discount Rate, of the excess,
if any, of (i) the amount of interest computed at the Fixed Rate on the
principal amount of the relevant Lender's Tranche B Term Loan (after giving
effect to any scheduled amortization occurring prior to the first day of each
Calculation Period) deemed to be due on the last day of each Calculation Period
during the remaining term of the Tranche B Term Loans over (ii) the amount of
each corresponding interest of payment computed according to the following
formula:

                                       10
<Page>


                                n=x
P                               Epsilon                      NETn
V              =
                                 n=1

                               (Px(L-R))  x               DAYSn - DAYSn-1
                               ---------                  ----------------
                                                          360


NETn            =              (1+Zn)                     (DAYSn - DAYS0)
                                                         ------------------

                                                             360


               X =           Number, or fraction thereof, of Calculation
                             Periods from date of prepayment to date of final
                             fixed maturity.

               P =           Principal Prepaid.

               L =           Fixed Rate.

               R =           Redeployment Rate.

 DAYSn - DAYSn-1 =           For each Calculation Period "W', the
                             actual number of days elapsed during that
                             Calculation Period.

   DAYSn - DAYS0 =           For each Calculation Period "n", the actual number
                             of days elapsed from the date of prepayment to the
                             last day of that Calculation Period.

               Z             = For each Calculation Period "W, the Discount Rate
                             for that Calculation Period.

                  For the purposes of this definition:

                           "Calculation Period" shall mean each annual period
         commencing on the Closing Date and each anniversary thereof except for
         the initial Calculation Period following prepayment, which shall
         commence on the date of such prepayment and end on the next following
         anniversary date of the Closing Date.

                                       11
<Page>

                           "Discount Rate" shall mean for each Calculation
         Period, the fixed per annum rate, as determined by the relevant Lender
         in its sole discretion on the date of such prepayment, that would be
         bid by a fixed rate payor under an arm's-length interest rate swap
         transaction having (i) a term approximately equal to such Calculation
         Period, (ii) a notional amount equal to the amount of such prepayment,
         (iii) a floating rate of LIBOR (determined by the relevant Lender in
         accordance with its customary practices) for the notional amount and
         (iv) a counterparty of creditworthiness acceptable to the relevant
         Lender.

                           "Fixed Rate" shall mean the fixed rate of interest
         with respect to the Tranche B Term Loans set forth in this Agreement.

                           "Redeployment Rate" shall mean, at any time, the
         fixed per annum rate (calculated on the basis of a single annual
         interest payment), as determined by the relevant Lender in its sole
         discretion on the date of any prepayment of the Tranche B Term Loans,
         that would be bid by a fixed rate payor under an arm's-length interest
         rate swap transaction having (i) a term approximately equal to the
         period commencing on the date of such prepayment and ending on the
         Maturity Date, (ii) a notional amount equal to the amount of such
         prepayment, (iii) a floating rate of LIBOR (determined by the relevant
         Lender in accordance with its customary practices) for the amount and
         (iv) a counterparty of creditworthiness acceptable to the relevant
         Lender.

         "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Reference Lender as its prime rate in effect
at its principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors).

         "Prior Mortgage" means the Mortgage, Fixture Filing and Assignment of
Leases and Rents dated October 9, 1997 given by Kolar, Inc. to the
Administrative Agent.

         "Projections": as defined in Section 5.2(c).

         "Properties": as defined in Section 3.17.

         "Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.

         "Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of either Borrower or any of their Subsidiaries.

         "Reference Lender": JPMorgan Chase Bank.

         "Register": as defined in Section 10.6(d).

                                       12

<Page>

         "Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.

         "Replacement Term Note" A Term Note substantially in the form of
Exhibit A issued pursuant to this Agreement in replacement of an outstanding
Term Note issued pursuant to the Original Credit Agreement and in replacement of
a Promissory Note issued in connection with a Permitted Line of Credit (as
defined in the Original Credit Agreement). Separate Replacement Term Notes shall
be issued to each of the Tranche A and Tranche B Lenders in accordance with
their respective Tranche A and Tranche B Term Loan Percentages.

         "Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or.20 of PBGC Reg.ss. 2615.

         "Required Lenders": the holders of more than 65% of the outstanding
principal amount of the Tranche A Loans (or, at any time when there shall be
fewer than three Tranche A Term Loan Lenders, each Tranche A Term Loan Lender)
and 65% of the outstanding principal amount of the Tranche B Term Loans, (or at
any time when there shall be fewer than three Tranche B Term Loan Lenders, each
Tranche B Term Loan Lender).

         "Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other. Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.

         "Responsible Officer": as such term pertains to a Borrower, the chief
executive officer, president or chief financial officer of such Borrower, but in
any event with respect to financial matters, the chief financial officer of such
Borrower.

         "Restricted Payments": as defined in Section 6.6.

         "Security Documents": the collective reference to the Guarantee and
Collateral Agreement as amended through the date hereof and as the same is
amended from time to time; the Mortgages; all other security documents
heretofore delivered to the Administrative Agent as the same may be amended from
time to time granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document; and the
Tranche C Mortgage to be delivered by Kolar, Inc. to the Administrative
Agreement on the Closing Date for the benefit of the Lenders holding the Tranche
C Term Loan, as the same may hereafter be amended from time to time; and the
Tranche C Intercreditor and Subordination Agreement.

         "Seller": Ralok, Inc., a New York corporation (formerly Kolar Machine,
Inc.).

                                       13
<Page>

         "Seller Intercreditor and Subordination Agreement": The Intercreditor
and Subordination Agreement dated October 9, 1997 among the Subordinated Lenders
(as defined therein), CPI, Kolar, Inc. and the Administrative Agent, as amended
as of the date hereof or otherwise hereafter modified from time to time.

         "Seller Note": the collective reference to the promissory note dated
October 9, 1997 in the amount of $4,000,000 issued by Kolar, Inc. to Seller,
together with any guarantee thereof by CPI.

         "Seller Security Documents": the collective reference to the Guaranty
Agreement, dated October 9, 1997 among CPI as Guarantor, Kolar, Inc., the Seller
and Daniel Liguori, and the Security Agreement, dated October 9, 1997 among CPI,
Kolar, Inc. and the Seller; and the subordinated mortgage dated October 9, 1997
held by the Seller on the Mortgaged Properties, each as amended through the date
hereof; and the Seller Intercreditor and Subordination Agreement.

         "Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.

         "Solvent": when used with respect to any Person, means that as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent matured or unmatured, disputed,
undisputed, secured or unsecured.

         "Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of CPI (including, without limitation, Kolar,
Inc.) and its Subsidiaries.

                                       14
<Page>

         "Tranche A Term Loan Lender": each Lender that has made a Tranche A
Term Loan, or the Assignee or Assignees of such Lender.

         "Tranche A Term Loan": as to any Lender, the principal amount set forth
under the heading "Tranche A Term Loan" opposite such Lender's name on Schedule
1.1, comprising (a) the remaining balance, aggregating $931,571, of the Tranche
A Term Loan advanced pursuant to the Original Credit Agreement plus (b) the
existing indebtedness of the Borrowers, aggregating $1,700,000 (as co-borrowers)
pursuant to Permitted Lines of Credit (as defined in the Original Credit
Agreement) and which shall be converted into a portion of the Tranche A Loan
pursuant to Section 2.1(a). The aggregate principal amount of the Tranche A Term
Loans outstanding is $2,631,571, plus accrued interest.

         "Tranche A Term Loan Percentage": as to a Tranche A Term Loan Lender at
any time, the percentage that the aggregate principal amount of such Lender's
Tranche A Term Loan then outstanding constitutes of the aggregate principal
amount of all of the Tranche A Term Loans then outstanding).

         "Tranche B Term Loan Lender": each Lender that has made a Tranche B
Term Loan, or the Assignee or Assignees of such Lender.

         "Tranche B Term Loan": as to a Tranche B Term Loan Lender, the portion
of the Tranche B Term Loan held by each Lender set forth under the heading
"Tranche B Term Loan Amount" opposite such Lender's name on Schedule 1.1. The
aggregate remaining principal amount of the Tranche B Term Loan is $275,462 plus
accrued interest.

         "Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage that such Lender's Tranche B Term Loan then outstanding constitutes
of the aggregate principal amount of all of the Tranche B Term Loans then
outstanding.

         "Tranche C Lender": JPMorgan Chase or its Assignee or Assignees.

         "Tranche C Mortgage": The Mortgage to be issued by Kolar, Inc. to the
Administrative Agreement securing the Tranche C Term Loan, in the form annexed
hereto as Exhibit H.

         "Tranche C Intercreditor and Subordination Agreement": The
Intercreditor and Subordination Agreement in the form annexed as Exhibit B
between JPMorgan Chase Bank as the Tranche C Lender, the Lenders holding Tranche
A and Tranche B Loans and JPMorgan Chase Bank as Administrative Agent, pursuant
to which the Tranche C Term Loan is subordinated to the Tranche A and Tranche B
Loans.

         "Tranche C Term Loan": $704,484.41, plus accrued interest.

         "Tranche C Term Note": a promissory note substantially in the form
annexed as Exhibit C in the amount of the Tranche C Term Loan.

                                       15
<Page>

         "U.S. Taxes": as defined in Section 10.6(d).

         "Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

         1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

         (b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to either Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.

         (c) The words "hereof', "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

         (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

             SECTION 2. RESTATEMENT OF LOANS AND TERMS OF REPAYMENT

2.1      Loans.

         (a) Tranche A Loan. The Tranche A Term Loan:

                  (i) to the extent consisting of the remaining principal
balance of the Tranche A Loan made under the Original Credit Agreement, shall be
deemed continued and the maturity thereof shall be extended as provided in
Section 2.2(a) below;

                  (ii) to the extent consisting of the outstanding principal
balance of the Permitted Line of Credit Loans, shall be deemed a continuation
and conversion thereof into a portion of the Tranche A Loan under this
Agreement:

                  (iii) shall be deemed, in its entirety, a loan to and a joint
and several Obligation of CPI and Kolar, Inc. as co-borrowers; and

                  (iv) shall be included within the Replacement Term Note issued
to each Lender in accordance with their respective Tranche A Term Loan
Percentages.

         (b) Tranche B Loan. The Tranche B Loan:

                  (i) to the extent consisting of the remaining principal
balance of the Tranche B Loan made under the Original Credit Agreement, shall be
deemed continued and the maturity thereof shall be extended as provided in
Section 2.2(a) below;

                  (ii) shall be deemed, in its entirety, a loan to and a joint
and several Obligation of CPI and Kolar, Inc. as co-borrowers;

                  (iii) shall be included within the Replacement Term Note
issued to each Lender in accordance with their respective Tranche B Term Loan
Percentages.

                                       16
<Page>

         (c) Tranche C Term Loan. The Tranche C Term Loan:

                  (i) shall be deemed made by JPMorgan Chase Bank simultaneously
with the execution and delivery of this Agreement; and

                  (ii) shall be represented by a Tranche C Term Note.

         2.2 Repayment of Loans.

         (a) Tranche A Term Loans. The Tranche A Term Loans shall mature (i) in
four (4) consecutive monthly installments of fifty thousand dollars ($50,000)
each, payable on the last Business Day of June, July, August and September of
2002; (ii) six (6) consecutive monthly installments of seventy five thousand
dollars ($75,000) each, payable on the last Business Day each month from October
2002 through March 2003, (iii) two (2) consecutive monthly installments of one
hundred thousand dollars ($100,000) each, payable on the last Business Day of
each of April and May of 2003, and (iv) in an amount equal to the entire unpaid
principal balance plus interest due and owing thereon on June 30, 2003. Each
installment paid on account of principal of and interest on the Loans pursuant
to this Section 2.2(a) shall be made pro rata according to their respective
Tranche A Loan Percentages.

         (b) Tranche B Term Loans. The Tranche B Term Loans shall continue to
mature in equal monthly installments payable on the dates and in the aggregate
amounts set forth on Schedule 2.3(b) to the Original Credit Agreement, as the
same may have been and may hereafter be modified by prepayments.

         (c) Tranche C Term Loan. The Tranche C Term Loan shall mature (i) in
twelve (12) consecutive monthly installments of twenty thousand dollars
($20,000) each, payable on the last Business Day of each month from June, 2002
through May, 2003, and a final principal payment of the entire unpaid principal
balance plus interest due and owing thereon on June 30, 2003. Each installment
paid on account of principal of and interest on the Loans pursuant to this
Section 2.2(c) shall be made pro rata to each Lender according to their
respective Tranche C Term Loan Percentages. Notwithstanding the foregoing, the
Tranche C Term Loan shall be subordinated and junior in right of payment to the
payment of the Tranche A Loan, as provided in the Tranche C Intercreditor and
Subordination Agreement. Without limitation of the foregoing, no payment by the
Borrowers or principal or interest shall be applied in respect of the Tranche C
Term Loan if any installment of principal or interest in respect of the Tranche
A Loan or the Tranche B Loan has not been paid when due and remains unpaid.

                                       17
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         2.3 Fees. The Borrower agrees that if any portion of the Tranche A and
Tranche B Loans currently held by GECapital CFE, Inc. are not refinanced in
their entirety on or before the dates indicated below, the Borrower will pay to
the Administrative Agent for the benefit of the Lenders in accordance with their
respective Tranche A Loan Percentages the fees indicated below on such dates:

                  September 30, 2002                         $25,000

                  December 31, 2002                          $50,000

                  March 31, 2003                             $100,000

                  June 30, 2003                              $150,000

If an Event of Default shall have occurred prior to any such date, the fee due
on the next succeeding date shall be immediately due and payable, and each of
the succeeding scheduled fee payments shall become payable on their scheduled
dates unless both of the Tranche A and Tranche B Loans are refinanced or repaid
in their entirety on or before such dates. As used herein, "refinanced" means a
payment in full of the GECapital CFE, Inc. Tranche A and Tranche B Loan
Percentages or the transfer by GECapital CFE, Inc. its entire Tranche A and
Tranche B Loan Percentages to a third party that is not an affiliate of
GECapital CFE, Inc.

         2.4 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, subject to payment of the Prepayment
Premium in the case of the Tranche B Term Loan, upon irrevocable notice
delivered to the Administrative Agent at least five Business Days prior thereto,
which notice shall specify the date and amount of prepayment. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to such date on the amount prepaid. Partial prepayments shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof. Such partial
optional prepayments shall be applied (x) first to the Tranche A Term Loan until
all outstanding principal and accrued interest thereon is paid in full, (y) then
to the Tranche B Term Loan until all outstanding principal, accrued interest
thereon and any Prepayment Penalty in respect of such prepayment is paid in
full, and (x) thereafter to the Tranche C Term Loan.

         2.5 Mandatory Prepayments.

         (a) Unless the Required Lenders shall otherwise agree, if additional
Capital Stock or Indebtedness shall be issued or Incurred by either of the
Borrowers, or any of their Subsidiaries (excluding any Indebtedness Incurred in
accordance with Section 6.2 as in effect on the date of this Agreement), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or Incurrence (i) first, toward the prepayment of the
Tranche B Term Loans and (ii) then, toward the prepayment of the Tranche A Term
Loans.

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<Page>

         (b) Unless the Required Lenders shall otherwise agree, if on any date
CPI or any of its Subsidiaries shall (i) receive Net Cash Proceeds from any
Asset Sale or Recovery Event or (ii) receive any purchase price adjustment
pursuant to the Acquisition Agreement then such Net Cash Proceeds or purchase
price adjustment, as the case may be, shall be applied within 10 days after such
date (i) first, toward the prepayment of the Tranche B Term Loans and (ii) then,
toward the prepayment of the Tranche A Term Loans.

         2.6 Application of Prepayments. Each prepayment shall be applied (v)
first to the payment of any accrued and unpaid fees pursuant to Section 2.3, (w)
then to the payment of any other obligations accrued and unpaid hereunder other
than pursuant to the principal of and interest on any of the Loans, (x) then to
the Tranche B Term Loan until all outstanding principal and accrued interest
thereon is paid in full, (y) then to the Tranche A Term Loan until all
outstanding principal, accrued interest thereon and any Prepayment Penalty in
respect of such prepayment is paid in full, and (z) thereafter to the Tranche C
Term Loan.

         2.7 Interest Rates and Payment Dates. (a) At any time when Sections 2.8
and 2.9 are not applicable, the Tranche A and the Tranche C Term Loans shall
each bear interest at a rate per annum equal to the Prime Rate plus three and
one-half percent (3 1/2 %).

         (b) The Tranche B Term Loans shall bear interest at a rate per annum
equal to 8.3%.

         (c) Interest in respect of the Tranche A and Tranche C Term Loans shall
be payable in arrears on each Interest Payment Date, provided that interest
accruing pursuant to Section 2.9 shall be payable from time to time on demand.

         (d) Interest in respect of the Tranche B Term Loans shall be payable on
the dates and in the amounts specified in Schedule 2.3(b) of the Original Credit
Agreement, provided that interest accruing pursuant to Section 2.9 shall be
payable from time to time on demand.

         2.8 Late Payment. (i) If all or a portion of the principal amount of
any Loan shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Loans (whether or not overdue) shall
bear interest at a rate per annum which is equal to the rate that would
otherwise be applicable thereto pursuant to the provisions of Section 2.7 plus
2% and (ii) if all or a portion of any interest payable on any Loan or any other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate applicable to Tranche A and Tranche C Term
Loans, or Tranche B Term Loans, as the case may be, plus 2%, in each case, with
respect to clauses (i) and (ii) above, from the date of such non-payment until
such amount is paid in full (after as well as before judgment).

                                       19
<Page>

         2.9 Interest After Event of Default. In all instances other than as
described in Section 2.8 above, at any time when an Event of Default shall have
occurred and be continuing, the Tranche A and Tranche C Term Loans shall bear
interest at a rate per annum equal to the ABR plus the Applicable Margin plus 2%
and (ii) in all instances other than as described in Section 2.8 above, at any
time when an Event of Default shall have occurred and be continuing, the Tranche
B Term Loans shall bear interest at a rate per annum equal to the amount set
forth in Section 2.7(b) plus 2%.

         2.10 Computation of Interest. (a) Interest payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed.
Any change in the interest rate on a Loan resulting from a change in the ABR
shall become effective as of the opening of business on the day on which such
change becomes effective.

         (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error.

         2.11 Pro Rata Treatment; Application of Certain Prepayments. (a) Each
borrowing by the Borrower from the Lenders hereunder shall be deemed to have
been made pro rata according to the respective Tranche A Term Loan Percentages,
Tranche B Term Loan Percentages or Tranche C Term Loan Percentages, as the case
may be, of the relevant Lenders as of the Closing Date.

         (b) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 10.2, in Dollars and in immediately available funds. The Administrative
Agent shall have the right to charge any account maintained by the Borrower with
the Administrative Agent to the extent necessary to make any such payment. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received.

                                       20
<Page>

         2.12 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrowers shall not be required to increase any such amounts payable to any
Lender that is not organized under the law of the United States of America or a
state thereof to the extent such Lender's compliance with the requirements of
Section 2.12(b) at the time such Lender becomes a party to this Agreement fails
to establish a complete exemption from such withholding. Whenever any
Non-Excluded Taxes are payable by the Borrowers, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fail to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrowers shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section 2.9 shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

         (b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrowers and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8BEN or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form
W-8BEN, an annual certificate representing that such Non-U.S. Lender is not a
"bank" for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrowers at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrowers (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
Section 2.10(b), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.10(b) that such Non-U.S. Lender is not legally able
to deliver.

                                       21
<Page>

                   SECTION 3. REPRESENTATIONS AND WARRANTIES

         Borrowers hereby jointly and severally confirm and reaffirm that the
representations and warranties set forth in Section 3 of the Original Credit
Agreement were true, accurate and complete as of the date made.

         Further, without limitation of the foregoing and to induce the
Administrative Agent and the Lenders to enter into this Amended and Restated
Credit Agreement, each of the Borrowers hereby jointly and severally represent
and warrant to the Administrative Agent and each Lender that

         3.1 Financial Condition. The audited consolidated balance sheet of CPI
and its consolidated Subsidiaries as of December 31, 2001 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such dates, reported on by and accompanied by the report of Goldstein Golub
Kessler LLP present fairly the consolidated financial condition of CPI and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The unaudited consolidated balance sheet of CPI and its consolidated
Subsidiaries as at March 31, 2002, and the related unaudited consolidated
statements of income and cash flows for the three month period ended on such
date, presents fairly the consolidated financial condition of CPI and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein). CPI and its
consolidated Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, which are not reflected in the most recent
financial statements referred to in this Section 3.1 During the period from
December 31, 2001 to and including the date hereof there has been no Disposition
by CPI or any of its Subsidiaries of any material part of its business or
Property, other than for the Disposition of Kolar, Inc. assets in connection
with the Kolar, Inc. Liquidation.

         3.2 No Change. Since March 31, 2002 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect. For purposes of this Section 3.2, the Kolar, Inc. Liquidation shall not
be deemed to have had a Material Adverse Effect.

         3.3 Corporate Existence, Compliance with Law. Each of the Borrowers,
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate power and authority,
and the legal right, to own and operate its Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of Property or
the conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not in the aggregate, reasonably be expected to have a Material
Adverse Effect. As of the date hereof, the only Subsidiary of CPI is Kolar,
Inc., and Kolar, Inc. has no Subsidiaries.

                                       22
<Page>

         3.4 Corporate Power; Authorization, Enforceable Obligations. Each Loan
Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party. Each Loan Party
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except the
filings referred to in Section 3.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party that is a party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

         3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents will not violate any Requirement of Law
or any Contractual Obligation of either of the Borrowers or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to CPI or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.

         3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of either Borrower, threatened by or against either Borrower or any of
its Subsidiaries or against any of their respective properties or revenues (a)
with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby or (b) which could reasonably be expected to have
a Material Adverse Effect.

         3.7 No Default. Neither Borrower is in default under or with respect to
any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.

                                       23
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         3.8 Ownership of Property; Liens. Each Borrower has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other Property, and none of such
Property is subject to any Lien except as permitted by Section 6.3.

         3.9 Intellectual Property. Each Borrower owns, or is licensed to use,
all Intellectual Property necessary for the conduct of its business as currently
conducted. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does either Borrower know of
any valid basis for any such claim. The use of Intellectual Property by the
Borrowers does not infringe on the rights of any Person in any material respect

         3.10 Taxes. Each Borrower has filed or caused to be filed all Federal,
state and other material tax returns which are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of each Borrower with respect to any amount
so contested); no tax Lien has been filed, and, to the knowledge of each
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.

         3.11 Federal Regulations. No part of the proceeds of any Loans made
pursuant to the Original Credit Agreement have been used for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation G or Regulation U of the Board as in effect at the
time such Loans were made or for any purpose which violated the provisions of
the Regulations of the Board.

         3.12 Labor Matters. There are no strikes or other labor disputes
against either Borrower pending or, to the knowledge of either Borrower,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of each Borrower have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from either Borrower on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of the Borrower obligated
therefor.

         3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and. no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither Borrower nor any Commonly Controlled
Entity of either Borrower has had a complete or partial withdrawal from any
Multiemployer Plan which has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither Borrower nor any Commonly
Controlled Entity thereof would become subject to any material liability under
ERISA if such Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.

                                       24
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         3.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled' by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to Incur Indebtedness.

         3.15 Subsidiaries. The only Subsidiary of CPI is Kolar, Inc., and
Kolar, Inc. has no Subsidiaries. Neither Borrower has organized or acquired any
Subsidiary since January 1, 1991 other than the organization by CPI of Kolar,
Inc. in 1997.

         3.16 Environmental Matters.

         (a) The facilities and properties owned, leased or operated by the
Borrowers (the "Properties") do not contain, and to the best of their knowledge
have not previously contained, any Materials of Environmental Concern in amounts
or concentrations or under circumstances which (i) constitute or constituted a
violation of, or (ii) could give rise to liability under, any Environmental Law,
except in either case insofar as such violation or liability, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.

         (b) The Properties and all operations at the Properties are in material
compliance, and have, to the best of their knowledge in the last five years been
in material compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by the
Borrowers (the "Business") which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable value
thereof. Neither Borrower has assumed any liability of any other Person under
Environmental Laws.

                                       25
<Page>

         (c) Neither Borrower has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does either Borrower have
knowledge or reason to believe that any such notice will be received or is being
threatened, except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to result in the payment of a Material Environmental Amount.

         (d) To the best of the Borrowers' knowledge, since the date hereof
Materials of Environmental Concern have not been transported or disposed of from
the Properties in violation of, or in a manner or to a location which could give
rise to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at on or
under any of the Properties in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Law, except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to result in the payment of a Material
Environmental Amount.

         (e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of v Borrower, threatened, under any Environmental
Law to which either Borrower is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business, except insofar as such proceeding, action,
decree, order or other requirement or any aggregation thereof, could not
reasonably be expected to result in the payment of a Material Adverse Amount.

         (f) To the best of the Borrowers' knowledge, there has been no release
or threat of release of Materials of Environmental Concern at or from the
Properties, or arising from or related to the operations of either Borrower in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could give rise to liability
under Environmental Laws, except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, could not reasonably
be expected to result in the payment of a Material Environmental Amount.

         3.17 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, or any other document,
certificate or statement furnished to the Administrative Agent or the Lenders or
any of them by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrowers to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. As of the
date hereof, each of the representations and warranties contained in the
Acquisition Agreement is true and correct in all material respects. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.

                                       26
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         3.18 Security Documents. (a) The Guarantee and Collateral Agreement is
and continues to be effective in favor of the Administrative Agent, for the
benefit of the Lenders and is a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. The Guarantee and
Collateral Agreement constitutes and continues to constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in such Collateral and the proceeds thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person.

         (b) The Tranche C Mortgage is effective to create in favor of the
Administrative Agent, for the benefit of the Tranche C Lenders, a legal, valid
and enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof and when the Tranche C Mortgage is recorded in the office of the County
Clerk of Tompkins County, New York, such Tranche C Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as
security for the Tranche C Term Loan, in each case prior and superior in right
to any other Person, other than (i) the rights of the Administrative Agent for
the benefit of the Lenders under the Mortgages heretofore issued pursuant to the
Original Credit Agreement and (ii) the rights of the Seller under the Seller
Security Documents (subject to the Tranche C Intercreditor and Subordination
Agreement and to the Amendment to the Seller Intercreditor and Subordination
Agreement substantially in the form appended hereto as Exhibit D being executed
contemporaneously herewith between the Administrative Agent, the Tranche C
Lenders and the Seller).

         3.19 Senior Indebtedness. The obligations of each Borrower under the
Loan documents to which it is a party, including without limitation, the
Obligations, constitute "Senior Indebtedness" of each Borrower under the Seller
Intercreditor and Subordination Agreement as amended through the date hereof.

         3.20 Regulation H. No Mortgage encumbers improved real property which
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.

         3.21 Solvency CPI is, and will be and will continue to be, Solvent.


                        SECTION 4. CONDITIONS PRECEDENT

         The agreement of each Lender to enter into this Agreement is
subject to the satisfaction on the Closing Date, of the following conditions
precedent:

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         (a) Loan Documents. The Administrative Agent shall have received,
executed and delivered by a duly authorized officer of each Borrower (and duly
acknowledged as requested by the Administrative Agent), (i) this Agreement, (ii)
the amendment to the Guarantee and Collateral Agreement in the form annexed as
Exhibit E, (iii) for the account of each relevant Lender, the Replacement Term
Notes and the Tranche C Term Note, and (iv) the Mortgage Modification Agreement.

         (b) Lien Searches and Title Search. The Administrative Agent shall have
received the results of a recent lien search in each of the jurisdictions where
assets of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of Loan Parties except for liens permitted by Section 6.3,
and, in the case of such title search shall not reveal any encumbrances on the
Mortgaged Properties in addition to those set forth in the mortgagee's title
insurance policy issued pursuant to Section 4 of the Original Credit Agreement
other than encumbrances acceptable to the Administrative Agent in its sole
discretion.

         (c) Closing Certificate. The Administrative Agent shall have received,
with a counterpart for each Lender, a Closing Certificate of each Loan Party,
dated the Closing Date, substantially in the form of Exhibit F, with appropriate
insertions and attachments.

         (d) Legal Opinions. The Administrative Agent shall have received the
legal opinion of Graubard Miller, counsel to the Borrowers, substantially in the
form of Exhibit G.

         (e) Seller Intercreditor and Subordination Agreement. The
Administrative Agent shall have received an amendment to the Seller
Intercreditor and Subordination Agreement executed by Seller, substantially in
the form annexed hereto as Exhibit D.

         (f) Tranche C Mortgage. The Administrative Agent shall have received
the Tranche C Mortgage executed and delivered by a duly authorized officer of
Kolar, Inc., in the form annexed hereto as Exhibit H in proper form for
recording in the office of the County Clerk of Tompkins County, New York.

         (g) Tranche C Intercreditor and Subordination Agreement. The
Administrative Agent shall have received the Tranche C Intercreditor and
Subordination Agreement executed by Seller.

         (h) Security Agreement Amendment Relating to Tranche C The
Administrative Agent shall have received an Amendment to the Security Agreement
between the Seller and the Administrative Agent dated October 9, 1997, executed
by Seller in the form annexed hereto as Exhibit I.

         (i) Seller Note Amendment The Seller shall have agreed to a Seller Note
Amendment Agreement in the form annexed hereto as Exhibit J and the
Administrative Agent shall have received a certified copy thereof.

         (j) CPI Seller Guaranty Amendment The Seller shall have agreed to an
amendment of the Guaranty Agreement given by CPI in favor of Ralok, Inc.
(formerly Kolar Machine, Inc.) pursuant to a Seller Guaranty Agreement Amendment
in the form annexed hereto as Exhibit K and the Administrative Agent shall have
received a certified copy thereof.

                                       28
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         (k) Seller Mortgage Subordination Agreement The Seller shall have
executed and delivered to the Administrative Agent a Seller Mortgage
Subordination Agreement in the form annexed hereto as Exhibit L.

         (l) Mortgage Modification Agreement Kolar, Inc. shall have executed and
delivered to the Administrative Agent a Mortgage Modification Agreement in the
form annexed hereto as Exhibit M.

         (m) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement) required by
the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create or
continue in favor of the Administrative Agent for the benefit of the Lenders
(including without limitation in respect of the Lenders holding the Tranche C
Term Loan) a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (subject to the provisions of the Tranche
C Intercreditor and Subordination Agreement), shall be in proper form for
filing, registration or recordation.

         (n) Good Standing Certificates. The Administrative Agent shall have
received good standing certificates in respect of the jurisdiction of
incorporation of each Loan Party and each other jurisdiction where such Loan
Party is qualified to do business as a foreign corporation.

         (o) Change in Business. In the judgment of the Lenders, there shall
have occurred no material adverse change in the business, condition (financial
or otherwise), operations, performance, properties or prospects of either
Borrower since March 31, 2002.

         (p) Fees and Expenses. All accrued fees and expenses (including the
fees and disbursements of counsel billed to the Administrative Agent) shall have
been paid.

         (q) Litigation. There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court of before any
arbitrator or governmental instrumentality that, in the reasonable judgment of
the Administrative Agent and its counsel, would be likely to have a Material
Adverse Effect.

         (r) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of the Closing Date as if made on and as of such
date.

         (s) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the making of the Loan
requested to be made on the Closing Date.

         (t) Miscellaneous. The Administrative Agent and the Lenders shall have
received such other documents or information as the Administrative Agent and the
Lenders shall reasonably request.

                                       29
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                        SECTION 5. AFFIRMATIVE COVENANTS

         The Borrowers hereby jointly and severally agree that so long as any
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each of the Borrowers shall and shall cause each of its Subsidiaries
hereafter created to:

         5.1 Financial Statements. Furnish to the Administrative Agent and each
Lender:

         (a) (i) as soon as available, but in any event within 90 days after the
end of each fiscal year of CPI, a copy of the audited consolidated and
consolidating balance sheet of CPI and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated and consolidating
statements of income and of cash flows for such year, setting forth in each case
in comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by Goldstein Golub Kessler LLP, or other independent
certified public accountants of nationally recognized standing and (ii) a copy
of any management letter prepared by the accountants for CPI and/or Kolar, Inc.;
and

         (b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of CPI,
the unaudited consolidated and consolidating balance sheet of CPI and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated and consolidating statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or Responsible Officer, as the
case may be, and disclosed therein).

         5.2 Certificates; Other Information. Furnish to the Administrative
Agent and to each Lender or, in the case of clause (f), to the relevant Lender:

         (a) concurrently with the delivery of the financial statements referred
to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default except as specified in such certificate;

         (b) concurrently with the delivery of any financial statements pursuant
to Section 5.1, (i) a certificate of a Responsible Officer stating that, to the
best of each such Responsible Officer's knowledge, each Loan Party during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information necessary for determining compliance by CPI with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of CPI, as the case may be, prepared by the
Borrowers' accountants in the case of annual financial statements or by a
Responsible Officer of CPI in the case of quarterly financial statements, and
(y) to the extent not previously disclosed to the Administrative Agent, a
listing of any county or state within the United States where any Loan Party
keeps inventory or equipment and of any Intellectual Property acquired by any
Loan Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date);

         (c) as soon as available, and in any event no later than 90 days after
the end of each fiscal year of CPI, a detailed consolidated and consolidating
budget for the life of the Tranche A and Tranche C Term Loans (including a
projected consolidated and consolidating balance sheet of CPI and its
Subsidiaries as of the end of the following fiscal year, and the related
consolidated and consolidating statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as available,
significant revisions, if any, of such budget and projections with respect to
such fiscal years (collectively, the "Projections"), which Projections shall in
each case be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;

                                       30
<Page>

         (d) within five days after the same are sent, copies of all financial
statements and reports which CPI sends to the holders of any class of its debt
securities or public equity securities and within five days after the same are
filed, copies of all financial statements and reports which CPI may make to, or
file with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority; and

         (e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.

         5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Borrower, as the case may be.

         5.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Continue to engage in business of the same general type as now conducted by it,
(ii) preserve, renew and keep in full force and effect its corporate existence
and (iii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 6.4 and except, in the case of
clause (iii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

                                       31
<Page>

         5.5 Maintenance of Property, Insurance. (a) Keep all Property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted, (b) maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event fire, public liability, product
liability, employee fidelity and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business or as shall be reasonably required by the Administrative Agent and (c)
deliver to the Administrative Agent and the Lenders a report of a reputable
insurance broker with respect to such insurance concurrently with each delivery
of audited annual financial statements pursuant to Section 5.1 and such
supplemental reports with respect thereto as the Administrative Agent may from
time to time reasonably request

         5.6 Inspection of Property, Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) upon notice
given reasonably in advance permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrowers or any of their Subsidiaries with officers and
employees of the Borrowers and their Subsidiaries and with their independent
certified public accountants. The aforementioned inspection rights shall include
asset reviews of the books and records of the Borrowers to be performed by
representatives of the Administrative Agent as required by the Administrative
Agent and the Lenders in their sole discretion. The reasonable costs and
expenses for one such asset review per year shall be for the account of the
Borrowers. If there shall occur a Default or Event of Default, additional asset
reviews, as required by the Required Lenders, shall be performed, the reasonable
costs and expenses of which shall be for the account of the Borrowers.

         5.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:

         (a) the occurrence of any Default or Event of Default;

         (b) any (i) default or event of default under any Contractual
Obligation of either Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Borrowers or
any of their Subsidiaries and any Governmental Authority, which in either case,
if not cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;

                                       32
<Page>

         (c) any litigation or proceeding affecting the Borrowers or any of
their Subsidiaries in which the amount involved is $25,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;

         (d) the following events, as soon as possible and in any event within
30 days after either Borrower knows or has reason to know thereof. (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or either Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and

         (e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.

Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Borrower or the relevant Subsidiary
proposes to take with respect thereto.

         5.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenant, if any,
with, all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

         (b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.

         5.9 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by either Borrower or any of its Subsidiaries
(other than (x) any Property described in paragraph (b) or (c) below and (y) any
Property subject to a Lien expressly permitted by Section 6.3(g)) as to which
the Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property, including without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent.

                                       33
<Page>

         (b) With respect to any fee interest in any real estate acquired after
the Closing Date by either Borrower or any of its Subsidiaries (other than any
such real estate subject to a Lien expressly permitted by Section 6.3(g)),
promptly (i) execute and deliver a first priority mortgage or deed of trust, as
the case may be, in favor of the Administrative Agent for the benefit of the
Lenders, covering such real estate, in form and substance reasonably
satisfactory to the Administrative Agent (ii) if requested by the Administrative
Agent provide the Lenders with (k) title and extended coverage insurance
covering such real estate in an amount at least equal to the purchase price of
such real estate (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

         (c) With respect to any new Subsidiary created or acquired after the
Closing Date by either Borrower or any of its Subsidiaries, promptly (i) execute
and deliver to the Administrative Agent (x) such amendments to the Guarantee and
Collateral Agreement as. the Administrative Agent deems necessary or advisable
in order to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by either Borrower or any of its Subsidiaries and (y)
such amendments to this Agreement as shall be deemed necessary by the
Administrative Agent to reflect the existence of such Subsidiary, (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Loan Party owning such certificates or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including, without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.

                         SECTION 6. NEGATIVE COVENANTS

         The Borrowers hereby jointly and severally agree that so long as the
Commitments remain in effect, or any Loan or other amount is owing to any Lender
or the Administrative Agent hereunder, each Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:

                                       34
<Page>

         6.1 Financial Condition Covenants.

         (a) Consolidated Tangible Net Worth. Permit the Consolidated Tangible
Net Worth deficit to exceed the amounts set forth below at the end of each of
the indicated fiscal quarters:


                  Quarter ending 6/30/02    ($1,500,000)
                  Quarter ending 9/30/02    ($1,000,000)
                  Quarter ending 12/31/02   ($ 500,000)
                  Quarter ending 3/31/03    ($ 250,000)

         (b) Fixed Charges Coverage Ratio. Permit the Fixed Charges Coverage
Ratio to be less than the indicated amount during any of the indicated fiscal
quarters.

                  Quarter ending 6/30/02        1.33X
                  Quarter ending 9/30/02        1.50X
                  Quarter ending 12/31/02       1.50X
                  Quarter ending 3/31/03        1.33X


         (c) Consolidated Net Income. Permit Consolidated Net Income to be less
than the indicated amount during any of the indicated fiscal quarters:


                  Quarter ending 6/30/02         $250,000
                  Quarter ending 9/30/02         $500,000
                  Quarter ending 12/31/02        $500,000
                  Quarter ending 3/31/03         $250,000


         (d) EBITDA. Permit EBITDA to be less than the indicated amount during
any of the indicated fiscal quarters:


                  Quarter ending 6/30/02              $800,000
                  Quarter ending 9/30/02              $900,000
                  Quarter ending 12/31/02             $900,000
                  Quarter ending 3/31/03              $800,000


         6.2 Limitation on Indebtedness. Create, Incur, assume or suffer to
exist any Indebtedness, except:

         (a) Indebtedness of any Loan Party pursuant to any Loan Document; and

         (b) Indebtedness secured by Liens permitted by Section 6.3(g).

                                       35
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         6.3 Limitation on Liens. Create, Incur, assume or suffer to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except for:

         (a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the relevant Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;

         (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith by appropriate proceedings;

         (c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;

         (d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature Incurred in the
ordinary course of business;

         (e) easements, rights-of-way, restrictions and other similar
encumbrances Incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of CPI or any of its Subsidiaries;

         (f) Liens in existence on the date hereof listed on Schedule 6.3(f)

         (g) Liens securing Indebtedness of CPI or any of its Subsidiaries
Incurred pursuant to Section 6.2(b) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber any Property other than the Property financed
by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of such Indebtedness shall not exceed
100% of the purchase price of such assets;

         (h) Liens created pursuant to the Security Documents or the Seller
Security Documents; and

         (i) any interest or title of a lessor under any lease entered into by a
Borrower or any of its Subsidiaries in the ordinary course of its business and
covering only the assets so leased.

                                       36
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         6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially all
of its Property or business, or make any material change in its present method
of conducting business, except:

         (a) any Subsidiary of a Borrower may be merged or consolidated with or
into CPI (provided that CPI shall be the continuing or surviving corporation);
and

         (b) any Subsidiary of a Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to CPI.

         6.5 Limitation on Sale of Assets. Dispose of any of its Property or
business (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:

         (a) (i) the Disposition of obsolete or worn out property in the
ordinary course of business and (ii) the sale of receivables in the ordinary
course of business to collection agencies for the purpose of collecting overdue
amounts owing in respect thereof, so long as the aggregate value of all Property
sold pursuant to this paragraph (a) does not exceed $10,000 in any fiscal year
of CPI;

         (b) the sale of inventory in the ordinary course of business; and

         (c) Dispositions permitted by Section 6.4(b).

         6.6 Limitation on Dividends. Declare or pay any dividend on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of either Borrower or any
Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of CPI or any of its Subsidiaries (collectively, "Restricted
Payments"), except that any Subsidiary may make Restricted Payments to CPI.

         6.7 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except Capital Expenditures of CPI and its Subsidiaries in the
ordinary course of business not exceeding $100,000 in the aggregate in any
fiscal year of CPI.

         6.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit (including by way of guaranty in favor of third
parties) or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting all or a material
part of a business unit of, or make any other investment in, any Person, except

         (a) extensions of trade credit in the ordinary course of business;

         (b) investments in Cash Equivalents; and

         (c) Guarantee Obligations permitted by Section 6.2(a) or 6.2(d);

                                       37
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         6.9 Limitation on Payments and Modifications with respect to Seller
Note, Seller Security Documents. (a) Make or offer to make any optional payment,
prepayment, repurchase or redemption of or otherwise defease or segregate funds
with respect to any Indebtedness (other than Indebtedness under any Loan
Document), or (b) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
the Seller Note or the Seller Security Documents.

         6.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than a Borrower)
unless such transaction is (a) otherwise permitted under this Agreement, (b) in
the ordinary course of business of a Borrower or any Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate. The preceding
sentence shall not apply to a non-interest bearing loan made to Arthur August in
October, 2000 in the amount of $150,000, which Mr. August used to purchase a
Greit Plan, as described in the report of CPI on form 10-K for the year ended
December 31, 2000.

         6.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by a Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by a
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of a Borrower or such Subsidiary.

         6.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
a Borrower to end on a day other dm December 31 or change a Borrower's method of
determining fiscal quarters.

         6.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
a Borrower or any of its Subsidiaries to create, Incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, other than (a) this Agreement and the other Loan Documents
and (b) any agreements governing any purchase money Liens otherwise permitted
hereby (in which case, any prohibition or limitation shall only be effective
with respect to the assets financed thereby).

         6.14 Limitation on Restrictions on Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of a Borrower to (a) pay dividends or make any
other distributions in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, such Borrower or the other Borrower or
Subsidiary of such Borrower or the other Borrower, (b) make loans or advances to
a Borrower or any Subsidiary of such Borrower or to the other Borrower or
Subsidiary of such other Borrower or (c) transfer any of its assets to a
Borrower or any other Subsidiary of the Borrower or to the other Borrower or
Subsidiary of such other Borrower, except for such encumbrances or restrictions
existing under the Loan Documents.

                                       38
<Page>


         6.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which either
the Borrowers are engaged on the date of this Agreement or which are reasonably
related thereto.

         6.16 Limitation on Change in Accounting Treatment. Change its
accounting treatment or reporting practices except as required by changes in
GAAP.

                          SECTION 7. EVENTS OF DEFAULT

         If any of the following events shall occur and be continuing:

         (a) The Borrowers shall fail to pay (i) any principal of any Loan when
due in accordance with the terms hereof and (ii) any interest thereon or any
other amount payable hereunder or under any other Loan Document within two
business days after such payment is due in accordance with the terms hereof or
thereof; or

         (b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or

         (c) (i) Any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraph (a) or (b) of this Section) or (ii) an
"Event of Default" under and as defined in any Mortgage shall have occurred and
be continuing; or

                                       39
<Page>

         (d) Either Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans) on the scheduled
or original due date with respect thereto; or (ii) default in making any payment
of any interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee Obligation) to become payable; provided, that a
default, event or condition described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default under this
Agreement unless, at such time, one or more defaults, events or conditions of
the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $25,000; or

         (e) (i) Either Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
either Borrower or any of its Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced either Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against either Borrower or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) either Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) either Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or

         (f) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrowers or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrowers or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, Incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to have a Material
Adverse Effect; or

                                       40
<Page>

         (g) One or more judgments or decrees shall be entered against either of
the Borrowers or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $50,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 30 days from the entry thereof, or

         (h) Any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or

         (i) The guarantee referred to in Section 9 hereof or in Section 2 of
the Guarantee and Collateral Agreement shall cease, for any reason, to be in
full force and effect or any Loan Party or any Affiliate of any Loan Party shall
so assert; or

         (j) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become, or obtain rights (whether by means or wan-ants, options or
otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 5% of the
outstanding common stock of CPI; (ii) the board of directors of CPI shall cease
to consist of a majority of Continuing Directors; (iii) CPI shall cease to own
and control, of record and beneficially, directly, 100% of each class of
outstanding Capital Stock of Kolar, Inc. free and clear of all Liens (except
Liens created by the Guarantee and Collateral Agreement); or (iv) any direct or
indirect parent of either Borrower (other than CPI) shall be created unless (x)
such parent becomes a party to the Guarantee and Collateral Agreement as a
guarantor and a grantor and (y) such amendments to the Loan Documents as the
Required Lenders shall request shall be entered into (including, in any event,
amendments subjecting such parent and its subsidiaries to the covenants
contained herein); or

         (k) the Seller Note or any guarantee thereof shall cease, for any
reason, to be validly subordinated to the obligations of the relevant Loan Party
under the Loan Documents to which it is a party to the extent provided in the
Seller Intercreditor and Subordination Agreement or the Seller, any Loan Party
or any of their respective Affiliates shall so assert;

         (l) the Tranche C Term Loan shall cease, for any reason, to be validly
subordinated to the obligations of Borrowers under the Tranche A and Tranche B
Loans to the extent provided in the Tranche C Intercreditor and Subordination
Agreement or the holder of the Tranche C Term Loan, any Loan Party or any of
their respective Affiliates shall so assert;

then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above with respect to either Borrower, automatically the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, upon the request of the
Required Lenders, the Administrative Agent shall by notice to the Borrowers,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, together with, in the case of the Tranche B Term Loans, the
Prepayment Premium, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrowers.

                                       41
<Page>

                      SECTION 8. THE ADMINISTRATIVE AGENT

         8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

         8.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

         8.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party a party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document or to inspect the properties, books or
records of any Loan Party.

                                       42
<Page>

         8.4 Reliance by Administrative Agent. The Administrative, Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit letter,
telecopy, telex or teletype message, statement; order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel the Borrowers),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be Incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

         8.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
either Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

         8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agents nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to tile Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

                                       43
<Page>

         8.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation the Borrowers to do so), ratably according to
their respective Tranche A Term Loan Percentages and Tranche B Term Loan
Percentages in effect on the date on which indemnification is sought under this
Section 8.7 (or, if indemnification is sought after the Loans shall have been
paid in full, ratably in accordance with such Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, Incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of, the Commitments made pursuant to the Original Credit Agreement, this Amended
and Restated Credit Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section 8.7 shall survive the payment of the Loans and all other amounts
payable hereunder.

         8.8 Administrative Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though the Administrative
Agent was not the Administrative Agent. With respect to its Loans made or
renewed by it and with respect to any Letter of Credit issued or participated in
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.

                                       44
<Page>

         8.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrowers.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 8 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

         8.10 Authorization to Release Liens. The Administrative Agent is hereby
irrevocably authorized by each of the Lenders to release any Lien covering any
Property of CPI or any of its Subsidiaries that is the subject of a Disposition
which is permitted by this Agreement or which has been consented to in
accordance with Section 10.1.

                           SECTION 9. PRIOR GUARANTEE

         9.1 Continued Effect of Prior Guarantee. All of the provisions set
forth in Section 9 of the Original Credit Agreement shall continue in full force
and effect with respect to any and all obligations of CPI and/or Kolar, Inc.
Incurred pursuant to the Original Credit Agreement and/or any of the Loan
Documents executed in connection therewith, including but not limited to any and
all amendments to and waivers issued by the Administrative Agent and/or any of
the Lenders with respect to the Original Credit Agreement. Nothing in this
Amended and Restated Credit Agreement shall be deemed to release CPI of any of
its obligations under Section 9.1 of the Original Credit Agreement as in effect
prior to the date hereof and/or its Guarantor Obligations (as defined in the
Guarantee and Collateral Agreement) in respect of any act, occurrence, Event of
Default, obligation or other matter arising on or before the date hereof.

         9.2 CPI and Kolar, Inc. as Co-Borrowers. Notwithstanding the foregoing,
from and after the date of this Amended and Restated Credit Agreement, CPI is
becoming a co-borrower with Kolar, Inc. in respect of each of the Loans and
shall have direct, joint and several liability with Kolar, Inc. for payment of
all of the Obligations.

                                       45
<Page>

9.3 No Subrogation Contribution, Reimbursement or Indemnity. Notwithstanding
anything to the contrary in this Section 9, each Borrower hereby irrevocably
waives all rights, if any, which may hereafter arise in favor of one Borrower
for contribution from the other Borrower in respect of the payment of any
Obligation hereunder to be subrogated to any of the rights (whether contractual,
under the United States Bankruptcy Code (or similar action under any successor
law or under any comparable law), including Section 509 thereof, under common
law or otherwise) of the Administrative Agent or any Lender against either
Borrower or against the Administrative Agent or any Lender for the payment of
the Obligations, until the Obligations shall have been paid in full. Each
Borrower hereby further irrevocably waives all contractual, common law,
statutory and other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the other Borrower or any other
Person which may have arisen in connection with the payment by such Borrower of
any of the Obligations, until the Obligations shall have been paid in full. So
long as the Obligations remain outstanding, if any amount shall be paid by or on
behalf of a Borrower to the other Borrower on account of any of the rights
waived in this Section 9.2, such amount shall be held by the Borrower receiving
such payment in trust, segregated from other funds of such Borrower, and shall,
forthwith upon such receipt be turned over to the Administrative Agent in the
exact form received (duly indorsed by the recipient to the Administrative Agent,
if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine. The
provisions of this Section 9.2 shall survive the term of this Agreement and the
payment in full of the Obligations.

                           SECTION 10. MISCELLANEOUS

         10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, Security Document or Seller Security Document (collectively
"Transaction Documents") nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party that is a party to the
relevant Transaction Document may, or, with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party that is a party to the
relevant Transaction Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Transaction
Documents for the purpose of adding any provisions to this Agreement or the
other Transaction Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Transaction Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Loan, reduce the stated rate of any
interest without the consent of each Lender directly affected thereby, (ii)
amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders, consent to the

                                       46
<Page>

assignment or transfer by any Loan Party of any of its rights and obligations
under any Transaction Documents or release any Collateral or any guarantee of
the Obligation's, in each case without the written consent of all Lenders or
(iii) amend, modify or waive any provision of Section 8 without the consent of
the Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.

         10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrowers and the
Administrative Agent and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:

  CPI:                                    CPI Aerostructures, Inc.
                                          200A Executive Drive
                                          Edgewood, NY 11717
                                          Attn: Edward J. Fred, President
                                          Telecopier No.: (516) 586-5840

  with a copy to:                         Graubard Miller
                                          600 Third Avenue
                                          New York, NY 10016
                                          Attn:  David Alan Miller, Esq.
                                          Telecopier No.:  (212) 818-8881

  The Administrative Agent:               JP Morgan Chase Bank
                                          395 North Service Road
                                          Suite 302
                                          Melville, New York 11747 Attn:
                                          Relationship Manager -
                                          CPI Aerostructures, Inc.

  If to the Mortgagee:                    JPMorgan Chase Bank
                                          Real Estate Finance Unit
                                          270 Park Avenue - 43rd Floor
                                          New York, New York 10017

                                       47
<Page>


  With a copy to:                         JPMorgan Chase Bank
                                          Bank Legal Department
                                          270 Park Avenue - 39th Floor
                                          New York, New York 10017

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

         10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

         10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

         10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
Incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses Incurred
in connection with the enforcement or preservation of any rights under this
Agreement the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and expenses of in house counsel) to each Lender and of counsel
to the Administrative Agent (c) to pay, indemnify, and old each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the Acquisition, the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of either Borrower or
any of its Subsidiaries or any of the Properties (all the foregoing in this
clause (d), collectively, the "indemnified liabilities"), provided, that the
Borrower shall have no obligation hereunder to any indemnitee with respect to
indemnified liabilities to the extent such indemnified liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such indemnitee. The
agreements in this Section 10.5 shall survive repayment of the Loans and all
other amounts payable hereunder.

                                       48
<Page>

         10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of either Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.

         (b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, or any other interest of such Lender hereunder
and under the other Loan Documents. In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of
or interest on, the Loans, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to

                                       49
<Page>

the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 103(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Section 2.10 with respect to
its participation in the Commitments and the Loans outstanding from time to time
as if it was a Lender; provided that such Participant shall have complied with
the requirements of said Section and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such Section
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.

         (c) Any Lender (an "Assignor") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate thereof
or to an additional bank, financial institution or other entity (an "Assignee")
all or any part of its rights and obligations under this Agreement pursuant to
an Assignment and Acceptance, substantially in the form of Exhibit N, executed
by such Assignee and such Assignor and delivered to the Administrative Agent for
its acceptance and recording in the Register. Any such assignment shall be
ratable as between the Facilities unless otherwise agreed by the Administrative
Agent. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement such assigning Lender shall cease to be a party
hereto). Unless requested by the Assignee and/or the Assignor, new Notes shall
not be required to be executed and delivered by the Borrower, for any assignment
which occurs at any time when any Event of Default shall have occurred and be
continuing.

         (d) The Administrative Agent shall maintain at its address referred to
in Section 10.2 a copy of each Assignment and Acceptance delivered, to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitments of, and the principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, each other Loan Party, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement.

         (e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate thereof, by the Borrower and the Administrative Agent)
together with payment to the Administrative Agent of a registration and
processing fee of $3,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.

         (f) (i) The Replacement Term Notes and the Tranche C Term Note shall in
each case be issued by the Borrowers and payable to the order of a Lender (or,
if required by such Lender, payable to such Lender or its registered assigns (an
"Alternative Note")). Each Lender is hereby authorized to record, on the
schedule annexed to and constituting a part of the relevant Note, information
regarding the relevant Loans made by such Lender, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure to make any such recordation or any error in such
recordation shall not affect the Borrower's obligations hereunder or under any
Note. On or prior to the effective date of an Assignment and Acceptance, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for the relevant Notes, new Notes to the order of the
Assignee and, if applicable, the Assignor. Such new Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes replaced thereby.

                                       50
<Page>

                  Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States or any taxing authority thereof ("U.S. Taxes") in
respect of payment of any Obligations due to such Non-U.S. Lender under this
Agreement if the Obligations were in registered form for U.S. federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees thereupon, to exchange any promissory note(s) evidencing such
Obligations for an Alternative Note. Alternative Notes may not be exchanged for
promissory notes that are not Alternative Notes. Each Non-U.S. Lender that holds
Alternative Note(s) (an "Alternative Noteholder") (or, if such Alternative
Noteholder is not the beneficial owner thereof, such beneficial owner) shall
deliver to the Borrower prior to or at the time such Non-U.S. Lender becomes an
Alternative Noteholder each of the forms and certifications required by Section
2.10(b). An Alternative Note and the Obligation(s) evidenced thereby may be
assigned or otherwise transferred in whole or in part only by registration of
such assignment or transfer of such Alternative Note and the Obligation(s)
evidenced thereby on the Register (and each Alternative Note shall expressly so
provide). Any assignment or transfer of all or part of such Obligation(s) and
the Alternative Note(s) evidencing the same shall be registered on the Register
only upon surrender for registration of assignment or transfer of the
Alternative Note(s) evidencing such Obligation(s), duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the Alternative Noteholder thereof, and thereupon one or more new Alternative
Note(s) in the same aggregate principal amount shall be issued to the designated
Assignee(s). No assignment of an Alternative Note and the Obligations evidenced
thereby shall be effective unless it has been recorded in the Register.

         (g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.

         10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
provides for payments to be allocated to the Lenders under a particular Loan, if
any Lender (a "Benefitted Lender") shall at any time receive any payment of all
of pin of its Loans owing to it, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 7(e), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans
owing to such other Lender, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest

                                       51
<Page>

         (b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to either Borrower,
any such notice being expressly waived by the Borrowers to the extent permitted
by applicable law, upon any amount becoming due and payable by either Borrower
here-under (whether at the stated maturity, by acceleration or otherwise) to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of either Borrower. Each Lender agrees promptly to notify
the Borrowers and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

         10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

         10.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

         10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         10.12 Submission To Jurisdiction, Waivers. Each Borrower hereby
irrevocably and unconditionally:

                                       52
<Page>

         (a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;

         (b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

         (c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrowers, at the
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

         (d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction; and

         (e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section 10.12 any special, exemplary, punitive or consequential damages.

         10.13 Acknowledgements. Each Borrower hereby acknowledges that:

         (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

         (b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrowers, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and (c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrowers and the Lenders.

         10.14 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                      [The next page is the Signature Page]

                                       53

<Page>


                                Signature Page to

                     Amended and Restated Credit Agreement.

                                      Dated

                                  June 25, 2002

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

                                      CPI AEROSTRUCTURES, INC.

                                      By: /s/ Edward J. Fred
                                          Edward J. Fred, President

                                      KOLAR, INC.

                                      By:   /s/ Edward J. Fred
                                      Edward J. Fred, Executive Vice President

                                      JPMORGAN CHASE BANK, as Administrative
                                      Agent and as a Lender


                                      By: /s/
                                      Name:
                                      Title:


                                      GE CAPITAL CFE, INC., as a Lender


                                      By:  /s/
                                      Name:
                                      Title:




                                       54

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>4
<FILENAME>cpi8k-6252002_1044.txt
<DESCRIPTION>REPLACEMENT TERM NOTE (6-25-2002)
<TEXT>

                                                                   EXHIBIT 10.44

                          FORM OF REPLACEMENT TERM NOTE

                            (Tranche A and Tranche B)

$______________                                               New York, New York
                                                                 June ____, 2002

         FOR VALUE RECEIVED, the undersigned, KOLAR, INC, a Delaware corporation
and CPI AEROSTRUCTURES, INC, a New York corporation (the "Borrowers") hereby
unconditionally, jointly and severally, promise to pay to the order of
___________________________________________ (the "Lender") at the office of
_______________________________________________________________, located at
_______________________________________________, in lawful money of the United
States of America and in immediately available funds, the principal amount of
_________________________________ ($_________________) or, if less, the unpaid
principal amounts of the Term Loans made by the Lender as Tranche A and Tranche
B Term Loans pursuant to subsections 2.1(a and 2.1(b) of the Amended and
Restated Credit Agreement, as hereinafter defined. The principal amounts shall
be paid in the amounts and on the dates specified in subsections 2.2(a) and
2.2(b) of the Amended and Restated Credit Agreement. The Borrowers further agree
to pay interest in like money at such office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
subsection 2.7 of such Credit Agreement.

         The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof, which shall
be attached hereto and made a part hereof, the date and amount of the Term Loan
and the date and amount of each payment or prepayment of principal with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrowers in respect of such Term Loans.

         This Note (a) is one of the Replacement Term Notes referred to in the
Amended and Restated Credit Agreement dated as of June ___, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrowers, the Lender, the other banks and financial institutions from
time to time parties thereto and JPMorgan Chase Bank, as agent, (b) is subject
to the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents (as
defined in the Credit Agreement). Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.

         Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

<Page>

         All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

         THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

- -------------------------------- -----------------------------------------------
CPI AEROSTRUCTURES, INC.          KOLAR, INC.

By: ___________________________  By: ___________________________

Name: Edward J. Fred, President  Name: Edward J. Fred, Executive Vice President

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



<Page>

<Table>
<Caption>



                          LOANS AND REPAYMENT OF LOANS
                                    TRANCHE A
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
                                          Amount of                Unpaid Principal
    Date          Amount of Loan       Principal Repaid            Balance of Loans            Notation Made By
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
<S>             <C>                     <C>                      <C>                             <C>

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

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

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

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

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

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

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

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

- -------------- --------------------- ----------------------- --------------------------- ----------------------------
</Table>



<Page>

<Table>
<Caption>



                          LOANS AND REPAYMENT OF LOANS
                                    TRANCHE B
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
                                          Amount of                Unpaid Principal
    Date          Amount of Loan       Principal Repaid            Balance of Loans            Notation Made By
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
<S>             <C>                     <C>                      <C>                             <C>

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

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

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

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

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

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

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

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

- -------------- --------------------- ----------------------- --------------------------- ----------------------------
</Table>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>5
<FILENAME>cpi8k-6252002_1045.txt
<DESCRIPTION>TRANCHE C INTERCREDITOR AGREEMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.45

         TRANCHE C INTERCREDITOR AND SUBORDINATION AGREEMENT, dated as of June
25,2002, among the Tranche C Lenders (as hereinafter defined), CPI
Aerostructures Inc., a New York corporation ("CPI"), Kolar, Inc., a Delaware
corporation ("Kolar, Inc." and collectively with CPI, the "Borrowers"), and
JPMorgan Chase Bank, as administrative agent (together with its successors and
assigns in such capacity, the "Administrative Agent") for the Senior Lenders (as
hereinafter defined).

                                    RECITALS

         A. The Borrowers and JPMorgan Chase Bank (formerly Chase Manhattan
Bank) Mellon Bank, N.A., as Lenders and JPMorgan Chase Bank as Administrative
Agent heretofore entered into a Credit Agreement (the "Original Credit
Agreement") dated as of October 9, 1997, pursuant to which the Lenders (as
defined below) made certain term loans to Kolar, Inc., designated therein as
"Tranche A Term Loans" and "Tranche B Term Loans," and such Loans were
guaranteed by CPI.

         B. The Lenders, as permitted under the Original Credit Agreement,
thereafter made certain line-of credit loans ("Line of Credit Loans") to the
Borrowers as co-Borrowers.

         C. The Tranche A, Tranche B and Line-of-Credit Loans, and CPI's
obligations as guarantor were secured by substantially all of the personal
property owned by the Borrowers pursuant to a Guaranty and Collateral Agreement
dated October 9, 1997 (the "Guaranty Agreement").

         D. Mellon Bank, N.A. has assigned its rights under the Original Loan
Agreement to GE Capital CFE, Inc.

         E. As of the date hereof JPMorgan Chase Bank holds additional
indebtedness of Kolar, Inc. in the principal amount of $704,484.41 ("Deficiency
Debt");

         F. The Original Credit Agreement has been amended and restated as of
the date hereof (the "Restated Credit Agreement"), and pursuant thereto, among
other matters,

         (1) the Tranche A Loans and outstanding Line-of-Credit Loans have been
converted into a single Tranche A Loan having a maturity date of June 30, 2003,
as to which CPI has become a direct co-Borrower with Kolar, Inc.;

         (2) the Deficiency Debt has been converted into a term loan having a
maturity date of June 30, 2003 designated as the "Tranche C Term Loan" and the
Guaranty Agreement has been amended such that the Tranche C Term Loan is an
additional Obligation (as defined thereunder) and

         (3) the Tranche C Term Loan has been further secured by the "Tranche C
Mortgage," which relates to certain real estate owned by Kolar, Inc. and which
is subordinated to a mortgage held by the Administrative Agent for the benefit
of the holders of the Tranche A, Tranche B and Line-of-Credit Loans on the same
real estate.

<Page>

         G. It is a condition of execution of the Restated Credit Agreement that
the Tranche C Term Loan be subordinate and junior in right of payment to the
Tranche A and Tranche B Loans.

         NOW, THEREFORE, the hereto hereby agree as follows:

         (1)      Definitions.

         (a) Unless otherwise defined herein, terms defined in the Restated
Credit Agreement and used herein shall have the meanings given to them in the
Restated Credit Agreement.

         (b) The following terms shall have the following meanings:

                  "Additional Senior Debt": any indebtedness or other liability
         incurred by the Borrowers other than pursuant to the Restated Credit
         Agreement and expressly designated as "Additional Senior Debt" for the
         purposes of this Agreement in a written notice to the Tranche C Lender
         signed by the Borrowers and by the Administrative Agent.

                  "Agreement": this Tranche C Intercreditor and Subordination
         Agreement as the same may be amended, supplemented or otherwise
         modified from time to time.

                  "Blockage Notice": a written notice from the Administrative
         Agent to the Borrowers that a Non-Payment Event of Default has occurred
         and is continuing.

                  "Blockage Period": any period commencing on the date a
         Blockage Notice is given and ending on the earlier of (a) the date when
         the Non-Payment Event of Default that was the basis for such notice has
         been cured or waived and (b) the later of (i) the fifth anniversary of
         the date hereof and (ii) the second anniversary of the date of
         commencement of the relevant Blockage Period.

                  "Collateral": the collective reference to any and all property
         from time to time subject to security interests to secure payment or
         performance of the Senior Obligations or the Subordinated Tranche C
         Obligations.

                  "Event of Default": any "Event of Default" under and as
         defined in the Restated Credit Agreement and any other event the
         occurrence of which permits (with the giving of notice if required) or
         results in the acceleration of any of the Senior Obligations.

                                       2
<Page>

                  "Insolvency Event": (a) Either of the Borrowers commencing any
         case, proceeding or other action (1) under any existing or future law
         of any jurisdiction, domestic or foreign, relating to bankruptcy,
         insolvency, reorganization, conservatorship or relief of debtors,
         seeking to have an order for relief entered with respect to it or
         seeking to adjudicate it a bankrupt or insolvent, or seeking
         reorganization, arrangement, adjustment, winding-up, liquidation,
         dissolution, composition or other relief with respect to it or its
         debts, or (2) seeking appointment of a receiver, trustee, custodian,
         conservator or other similar official for it or for all or any
         substantial part of its assets, or either of the Borrowers making an
         assignment for the benefit of its creditors; or (b) there being
         commenced against either of the Borrowers any case, proceeding or other
         action of a nature referred to in clause (a) above which (1) results in
         the entry of an order for relief or any such adjudication or
         appointment or (2) remains undismissed, undischarged or unbonded for a
         period of 60 days; or (c) there being commenced against either of
         Borrowers any case, proceeding or other action seeking issuance of a
         warrant of attachment, execution, distraint or similar process against
         all or any substantial part of its assets which results in the entry of
         an order for any such relief which shall not have been vacated,
         discharged, or stayed or bonded pending appeal within 60 days from the
         entry thereof; (d) either of the Borrowers taking any action in
         furtherance of, or indicating its consent to, approval of, or
         acquiescence in, any of the acts set forth in clause (a), (b) or (c)
         above; or (e) either of the Borrowers generally not paying, or being
         unable to pay, or admitting in writing its inability to pay, its debts
         as they become due.

                  "Mortgaged Properties": the real properties described as "Real
         Estate" in the Tranche C Mortgage and the rights appurtenant thereto as
         set forth in the Tranche C Mortgage.

                  "Non-Payment Event of Default": any Event of Default other
         than a Payment Event of Default.

                  "Payment Event of Default": any default in the payment of any
         of the Senior Obligations (whether upon maturity, mandatory prepayment,
         acceleration or otherwise) beyond any applicable grace period with
         respect thereto.

                  "Person": an individual, partnership, corporation, limited
         liability company, business trust, joint stock company, trust,
         unincorporated association, joint venture, governmental authority or
         other entity of whatever nature, including, without limitation, any
         creditor, trustee, debtor-in-possession, assignee for the benefit of
         creditors, receiver or any fiduciary whatsoever.

                  "Restated Credit Agreement": the Amended and Restated Credit
         Agreement, dated contemporaneously herewith, among the Borrowers, the
         Administrative Agent and the Lenders parties thereto from time to time,
         as such Credit Agreement may be amended, supplemented or otherwise
         modified from time to time, together with any one or more successive
         increases, renewals, extensions, refundings, deferrals, restructurings,
         replacements or refinancings of, or additions to, the arrangements
         provided in such Credit Agreement (whether provided by the original
         Administrative Agent and Lenders under such Credit Agreement or a
         successor Administrative Agent or other Lenders).

                  "Senior Lenders": the holders from time to time of Senior
         Obligations.

                                       3
<Page>

                  "Senior Loan Documents": the collective reference to the
         Original Credit Agreement, the Restated Credit Agreement, the Senior
         Security Documents, any documents governing any Additional Senior Debt
         and all other documents that from time to time evidence the Senior
         Obligations or secure or support payment or performance thereof,

                  "Senior Loans": the Tranche A and Tranche B Loans made to the
         Borrowers in connection with either the Original Credit Agreement, the
         Restated Credit Agreement (including Obligations of CPI incurred in
         respect of the Tranche A and Tranche B Loans as a guarantor under the
         Restated Credit Agreement) and the Additional Senior Debt, if any.

                  "Senior Obligations": the collective reference to (a) the
         unpaid principal of and interest on the Senior Loans and all other
         obligations and liabilities of the Borrowers to the Administrative
         Agent and the Senior Lenders pursuant to the Restated Credit Agreement
         other than the Subordinated Tranche C Obligations (including, without
         limitation, interest accruing after the maturity of the relevant Senior
         Loans and interest accruing after the filing of any petition in
         bankruptcy, or the commencement of any insolvency, reorganization or
         like proceeding, relating to either of the Borrowers, whether or not a
         claim for post-filing or post-petition interest is allowed in such
         proceeding), whether direct or indirect, absolute or contingent, due or
         to become due, or now existing or hereafter incurred, which may arise
         under, out of, or in connection with, the Restated Credit Agreement,
         this Agreement, the other Senior Loan Documents or any other document
         made, delivered or given in connection therewith, in each case whether
         on account of principal, interest, reimbursement obligations, fees,
         indemnities, costs, expenses or otherwise (including, without
         limitation, all fees and disbursements of counsel to the Administrative
         Agent or to the Senior Lenders that are required to be paid by the
         Borrowers pursuant to the terms of the Restated Credit Agreement, this
         Agreement or any other Senior Loan Document); and (b) all complete or
         partial refinancings of the obligations set forth in (a) above, and (c)
         any amendments, renewals or extensions of any of the foregoing..

                  "Senior Security Documents": the collective reference to all
         documents and instruments, now existing or hereafter arising, which
         create or purport to create a security interest in property to secure
         payment or performance of the Senior Obligations, including, without
         limitation, the "Security Documents" referred to in the Restated Credit
         Agreement.

                  "Subordinated Loan Documents": the collective reference to the
         Subordinated Tranche C Security Documents and any other documents or
         instruments that from time to time evidence the Subordinated Tranche C
         Obligations or secure or support payment or performance thereof.

                                       4
<Page>

                  "Subordinated Tranche C Obligations": the collective reference
         to the unpaid principal of and interest on the Tranche C Term Loan
         (including, without limitation, interest accruing on the Tranche C Term
         Loan and interest accruing at the then applicable rate provided with
         respect to the Tranche C Term Loan after the filing of any petition in
         bankruptcy, or the commencement of any insolvency, reorganization or
         like proceeding, relating to the Borrowers, whether or not a claim for
         post-filing or post-petition interest is allowed in such proceeding),
         which may arise under, out of, or in connection with, the Tranche C
         Term Loan, this Agreement, the Tranche C Mortgage, or any other
         Subordinated Loan Document in each case whether on account of
         principal, interest, reimbursement obligations, fees, indemnities,
         costs, expenses or otherwise (including, without limitation, all fees
         and disbursements of counsel to the Subordinated Tranche C Lenders that
         are required to be paid by the Borrowers pursuant to the terms of the
         Tranche C Term Loan, this Agreement or any other Subordinated Loan
         Document).

                  "Subordinated Tranche C Security Documents": the collective
         reference to (a) the Tranche C Mortgage, as the same may be amended,
         supplemented or otherwise modified from time to time, and (b) any other
         documents executed by the Borrowers with the prior written consent of
         the Administrative Agent (at the direction of the Required Lenders)
         from time to time secure payment or performance of the Subordinated
         Tranche C Obligations.

                  "Tranche C Lenders": JPMorgan Chase Bank, (but only in respect
         of such Tranche C Term Loan and not in respect of any other obligations
         of the Borrowers under the Restated Credit Agreement or otherwise) and
         any other holder from time to time of the Tranche C Term Loan.

                  " Tranche C Term Loan" The Tranche C Term Loan described in
         the Restated Credit Agreement as the same may be increased by accrued
         and unpaid interest thereon, and as the terms thereof may be amended,
         supplemented or otherwise modified from time to time.

                  " Tranche C Mortgage" A mortgage on the Mortgaged Properties
         granted by Kolar, Inc. in favor of the Tranche C Lenders, in the form
         annexed to the Restated Credit Agreement.

                  "Tranche C Note": the Tranche C Term Note delivered to the
         Tranche C Lender in the form annexed to the Restated Credit Agreement.

         (c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.

         (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

                                       5
<Page>

2.       Subordination.

         (a) Each Borrower and each Tranche C Lender agrees, for itself and each
future holder of the Subordinated Tranche C Obligations, that the Subordinated
Tranche C Obligations are expressly "subordinate and junior in right of payment"
(as that phrase is defined in Section 2(b)) to all Senior Obligations.

         (b) "Subordinate and junior in right of payment" means that:

                  (i) no part of the Subordinated Tranche C Obligations shall
have any claim to the assets of the Borrowers on a parity with or prior to the
claim of the Senior Obligations; and

                  (ii) unless and until the Senior Obligations have been paid in
full, without the express prior written consent of each Senior Lender, (A) no
Tranche C Lender will take, demand or receive from either Borrower, and neither
Borrower will make, give or permit, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payment of or security for the
whole or any part of the Subordinated Tranche C Obligations, including, without
limitation, any letter of credit or similar credit support facility to support
payment of the Subordinated Tranche C Obligations; provided, however, that at
any time, except during a Blockage Period or when a Payment Event of Default has
occurred and is continuing, the Borrower may make, and the Tranche C Lenders may
receive, scheduled payments on account of principal of and interest on the
Tranche C Term Loan in accordance with the Restated Credit Agreement, and (B) no
Tranche C Lender will accelerate for any reason the scheduled maturities of any
amount owing under the Tranche C Term Loan; provided, however, that upon the
occurrence of an Insolvency Event the Tranche C Lenders may, or the
Administrative Agent upon the written demand of any Tranche C Lender shall,
accelerate the scheduled maturity of the Tranche C Term Loan.

         (c) Upon the termination of any Blockage Period or if any Payment Event
of Default has been cured or waived, the Tranche C Lenders' right to receive
payments as provided in Section 2(b)(2)(A) shall be reinstated, and the Borrower
may resume making such payments to the Tranche C Lenders.

         (d) The expressions "prior payment in full," "payment in full," "paid
in full" and any other similar terms or phrases when used herein with respect to
the Senior Obligations shall mean the payment in full of all of the Senior
Obligations, in immediately available funds or other consideration accepted by
the holder of Senior Obligations.

3.       Additional Provisions Concerning Subordination.

         The Tranche C Lenders and the Borrowers agree that upon the occurrence
of any Insolvency Event:

                  (i) all Senior Obligations shall be paid in full before any
payment or distribution is made with respect to the Subordinated Tranche C
Obligations; and

                  (ii) any payment or distribution of assets of the Borrowers,
whether in cash, property or securities, to which any Tranche C Lender would be
entitled except for the provisions hereof, shall be paid or delivered by the
Borrowers, or any receiver, trustee in bankruptcy, liquidating trustee,
disbursing agent or other Person making such payment or distribution, directly
to the Administrative Agent, for the account of the Senior Lenders, to the
extent necessary to pay in full all Senior Obligations, before any payment or
distribution shall be made to any Tranche C Lender.

                                       6
<Page>

         (b) Upon the occurrence of any event or proceeding described in the
definition of "Insolvency Event" commenced by or against either Borrower:

                  (i) each Tranche C Lender irrevocably authorizes and empowers
the Administrative Agent (A) to demand, sue for, collect and receive every
payment or distribution on account of the Subordinated Tranche C Obligations
payable or deliverable in connection with such event or proceeding and give
acquittance therefor, and (B) to file claims and proofs of claim in any
statutory or non-statutory proceeding and take such other actions, in its own
name as the Administrative Agent, or in the name of the Tranche C Lenders or
otherwise, as the Administrative Agent may deem necessary or advisable for the
enforcement of the provisions of this Agreement; provided, however, that the
foregoing authorization and empowerment imposes no obligation on the
Administrative Agent to take any such action;

                  (ii) each Tranche C Lender shall take such action, duly and
promptly, as the Administrative Agent may request from time to time (A) to
collect the Subordinated Tranche C Obligations for the account of the Senior
Lenders and (B) to file appropriate proofs of claim in respect of the
Subordinated Tranche C Obligations; and

                  (iii) each Tranche C Lender shall execute and deliver such
powers of attorney, assignments or proofs of claim or other instruments as the
Administrative Agent may request to enable the Administrative Agent to enforce
any and all claims in respect of the Subordinated Tranche C Obligations and to
collect and receive any and all payments and distributions which may be payable
or deliverable at any time upon or in respect of the Subordinated Tranche C
Obligations.

         (c) If any payment or distribution, whether consisting of money,
property or securities, shall be collected or received by any Tranche C Lender
in respect of the Subordinated Tranche C Obligations, except payments permitted
to be made at the time of payment as expressly provided in Sections 2(b) and
2(c), such Tranche C Lender forthwith shall deliver the same to the
Administrative Agent for the account of the Senior Lenders, in the form
received, duly indorsed to the Administrative Agent, if required, to be applied
to the payment or prepayment of the Senior Obligations until the Senior
Obligations are paid in full. Until so delivered, such payment or distribution
shall be held in trust by such Tranche C Lender as the property of the
Administrative Agent, for the account of the Senior Lenders, segregated from
other funds and property held by such Tranche C Lender.

                                       7

<Page>

4.       Rights in Collateral.

         (a) Notwithstanding anything to the contrary contained in the Restated
Credit Agreement, any Senior Security Document, any other Senior Loan Document
or any Subordinated Security Document or other Subordinated Loan Document and
irrespective of:

                  (i) the time, order or method of attachment or perfection of
the security interests created by any Senior Security Document or any
Subordinated Security Document,

                  (ii) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect security
interests in any Collateral,

                  (iii) anything contained in any filing or agreement to which
the Administrative Agent, any Senior Lender or any Tranche C Lender now or
hereafter may be a party, and

                  (iv) the rules for determining priority under the Uniform
Commercial Code, applicable real estate law or any other law governing the
relative priorities of secured creditors,

         any security interest in any Collateral pursuant to any Senior Security
Document has and shall have priority, to the extent of any unpaid Senior
Obligations, over any security interest in such Collateral pursuant to any
Subordinated Security Document.

         (b) So long as the Senior Obligations have not been paid in full and
any Senior Security Document remains in effect:

                  (i) no Tranche C Lender will (A) exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or (B)
institute any action or proceeding with respect to such rights or remedies,
including without limitation, any action of foreclosure or (C) contest, protest
or object to any foreclosure proceeding or action brought by the Administrative
Agent or any Senior Lender or any other exercise by the Administrative Agent or
any Senior Lender of any rights and remedies under any Senior Loan Documents;
and

                  (ii) the Administrative Agent shall have the exclusive right
to enforce rights and exercise remedies with respect to the Collateral.

         (c) In exercising rights and remedies with respect to the Collateral,
the Administrative Agent shall enforce the provisions of the Senior Security
Documents and the Subordinated Security Documents concurrently and exercise
remedies thereunder and under any other Senior Loan Documents and Tranche C Term
Loan Documents concurrently. Such exercise and enforcement shall include,
without limitation, the rights to sell or otherwise dispose of Collateral, to
incur expenses in connection with such sale or disposition and to exercise all
the rights and remedies of a secured lender under the Uniform Commercial Code or
real estate law of any applicable jurisdiction; provided, however, that the
Administrative Agent shall apply any funds obtained as a result of the exercise
of such rights as provided in subsection (d) below. When all Senior Obligations
have been paid in full, the Tranche C Lenders, to the extent that the Tranche C
Term Loan has not been paid in full, shall have the right to enforce the
provisions of the Subordinated Security Documents and exercise remedies
thereunder

                                       8

<Page>

         (d) Any money, property or securities realized upon the sale,
disposition or other realization by the Administrative Agent upon all or any
part of the Collateral shall be applied by the Administrative Agent in the
following order:

                  (i) First, to the payment in full of all costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
paid or incurred by the Administrative Agent or the Senior Lenders in connection
with the such realization on the Collateral or the protection of their rights
and interests therein;

                  (ii) Second, to the payment of accrued and unpaid interest,
first in respect of the Tranche B Loan and then in respect of the Tranche A
Loan;

                  (iii) Third to the payment in full of all Senior Obligations
other than accrued and unpaid interest, first in respect of the Tranche B Loan
and then in respect of the Tranche A Loan;

                  (iv) Fourth, to the payment in full of all Subordinated
Tranche C Obligations then due and which are secured by such Collateral; and

                  (v) Fifth, to pay to CPI or Kolar, Inc; as the case may be, or
their respective representatives or as a court of competent jurisdiction may
direct, any surplus then remaining.

         (e) The Administrative Agent's and the Senior Lenders' rights with
respect to the Collateral include the right to release any or all of the
Collateral from the lien of any Senior Security Document or Subordinated
Security Document in connection with the sale of such Collateral,
notwithstanding that the net proceeds of any such sale may not be used to
permanently prepay any Senior Obligations or Subordinated Tranche C Obligations.
If the Administrative Agent shall determine, in connection with any sale of
Collateral, that the release of the lien of any Subordinated Security Document
on such Collateral in connection with such sale is necessary or advisable, the
Tranche C Lenders shall execute such release documents and instruments and shall
take such further actions as the Administrative Agent shall request. Each
Tranche C Lender hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Tranche C Lender and in the
name of such Tranche C Lender or in the Administrative Agent's own name, from
time to time in the Administrative Agent's discretion, for the purpose of
carrying out the terms of this Section, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Section, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer or release. Each Tranche C Lender hereby ratifies all
that said attorneys shall lawfully do or cause to be done pursuant to the power
of attorney granted in this Section. The Tranche C Lenders agree that any
restrictions in the Subordinated Loan Documents that would limit the ability of
the Administrative Agent or the Senior Lenders to consummate any transaction
referred to in this paragraph shall have no force or effect, provided that any
sale of all or substantially all of the assets of the Borrower at any time when
no Event of Default (other than any Event of Default resulting solely from such
sale) shall have occurred and be continuing (it being understood that for the
purposes of this proviso an outstanding Event of Default shall not be deemed to
have ceased to continue if it has been waived in contemplation of any such sale)
shall require the prior written consent of the Tranche C Lenders.

                                       9

<Page>

5.       Subrogation. Subject to the payment in full of all Senior Obligations,
the Tranche C Lenders shall be subrogated to the rights of the Senior Lenders to
receive payments or distributions of assets of the Borrowers, as the case may
be, applicable to the Senior Obligations until all amounts owing in respect of
the Subordinated Tranche C Obligations have been paid in full, and for the
purpose of such subrogation no such payments or distributions to the Senior
Lenders by or on behalf of either of the Borrowers, or by or on behalf of the
Tranche C Lenders by virtue of this Agreement which otherwise would have been
made to the Tranche C Lenders shall, as between the Borrowers, on the one hand,
and the Tranche C Lenders, on the other hand, be deemed to be payment by the
Borrowers to or on account of such Senior Obligations.

6.       Consent of Tranche C Lenders.

         (a) Each Tranche C Lender consents that, without the necessity of any
reservation of rights against any Tranche C Lender, and without notice to or
further assent by any Tranche C Lender:

                  (i) any demand for payment of any Senior Obligations made by
the Administrative Agent or any Senior Lender may be rescinded in whole or in
part by the Administrative Agent or any such Senior Lender, and any Senior
Obligation may be continued, and the Senior Obligations, or the liability of
either of the Borrowers or any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, or any obligation or liability of either of the Borrowers or any other
party under the Senior Loan Documents or any other agreement, may, from time to
time, in whole or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Administrative Agent or any
Senior Lender; and

                  (ii) the Restated Credit Agreement and any other Senior Loan
Document may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent or any Senior Lender may deem advisable from
time to time, and any collateral security at any time held by the Administrative
Agent or any Senior Lender for the payment of any of the Senior Obligations may
be sold, exchanged, waived, surrendered or released, in each case all without
notice to or further assent by any Tranche C Lender, which will remain bound
under this Agreement, and all without impairing, abridging, releasing or
affecting the subordination provided for herein.

         (b) Each Tranche C Lender waives any and all notice of the creation,
renewal, extension or accrual of any of the Senior Obligations and notice of or
proof of reliance by the Senior Lenders upon this Agreement, the Senior
Obligations, and any of them, shall be deemed conclusively to have been created,
contracted or incurred in reliance upon this Agreement, and all dealings between
the Borrowers and the Senior Lenders shall be deemed to have been consummated in
reliance upon this Agreement. Each Tranche C Lender acknowledges and agrees that
the Senior Lenders have relied upon the subordination provided for herein in
entering into the Restated Credit Agreement and the other Senior Loan Documents
or in entering into any Interest Rate Agreement. Each Tranche C Lender waives
notice of or proof of reliance on this Agreement and protest, demand for payment
and notice of default.

                                       10
<Page>

7.       Negative Covenants of the Tranche C Lenders. So long as any of the
Senior Obligations shall remain outstanding, no Tranche C Lender shall, without
the prior written consent of the Administrative Agent (at the direction of the
Required Lenders):

         (a) sell, assign, or otherwise transfer, in whole or in part, the
Subordinated Tranche C Obligations or any interest therein to any other Person
(a "Transferee") or create, incur or suffer to exist any security interest,
lien, charge or other encumbrance whatsoever upon the Subordinated Tranche C
Obligations in favor of any Transferee unless (1) such action is made expressly
subject to this Agreement and (2) the Transferee expressly acknowledges to the
Administrative Agent, by a writing in form and substance satisfactory to the
Administrative Agent, the subordination provided for herein and agrees to be
bound by all of the terms hereof;

         (b) permit any of the Subordinated Loan Documents to be amended,
modified or otherwise supplemented; or

         (c) commence, or join with any creditors other than the Senior Lenders
in commencing any proceeding referred to in the definition of "Insolvency
Event."

8.       Senior Obligations Unconditional. All rights and interests of the
Administrative Agent and the Senior Lenders hereunder, and all agreements and
obligations of the Tranche C Lenders and the Borrowers hereunder, shall remain
in full force and effect irrespective of

         (a) any lack of validity or enforceability of any Senior Security
Documents or any other Senior Loan Documents;

         (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Obligations, or any amendment or waiver
or other modification, whether by course of conduct or otherwise, of the terms
of the Restated Credit Agreement or any other Senior Security Document;

         (c) any exchange, release or nonperfection of any security interest in
any Collateral, or any release, amendment, waiver or other modification, whether
in writing or by course of conduct or otherwise, of all or any of the Senior
Obligations or any guarantee thereof; or

         (d) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, either of the Borrowers in respect of the
Senior Obligations, or of either any Tranche C Lender or either of the Borrowers
in respect of this Agreement.

9.       Waiver of Claims. To the maximum extent permitted by law, each Tranche
C Lender waives any claim it might have against the Administrative Agent or the
Senior Lenders with respect to, or arising out of, any action or failure to act
or any error of judgment, negligence, or mistake or oversight whatsoever on the
part of the Administrative Agent, the Senior Lenders or their respective
directors, officers, employees or agents with respect to any exercise of rights
or remedies under the Senior Loan Documents or any transaction relating to the
Collateral. Neither the Administrative Agent any Senior Lender nor any of their
respective directors, officers, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of either of the Borrowers or any Tranche C Lender
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.

                                       11

<Page>

10.      Provisions Applicable After Bankruptcy; No Turnover.

         (a) The provisions of this Agreement shall continue in full force and
effect notwithstanding the occurrence of any event referred to in the definition
of "Insolvency Event".

         (b) To the extent that any Tranche C Lender has or acquires any rights
under Section 363 or Section 364 of the Bankruptcy Code with respect to the
Collateral, such Tranche C Lender hereby agrees not to assert such rights
without the prior written consent of the Administrative Agent, (at the direction
of the Required Lenders); provided that, if requested by the Administrative
Agent and the Required Lenders, such Tranche C Lender shall seek to exercise
such rights in the manner so requested, including the rights in payments in
respect of such rights.

11.      Further Assurances. The Tranche C Lenders, at the joint and several
expense of the Borrowers, and the Borrowers, at their own expense, and in each
case at any time from time to time, upon the written request of the
Administrative Agent will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent reasonably may request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted.

12.      Expenses.

         (a) The Borrowers, jointly and severally, agree to pay or reimburse the
Administrative Agent and each Senior Lender, upon demand, for all its costs and
expenses in connection with the enforcement or preservation of any rights under
this Agreement, including, without limitation, fees and disbursements of counsel
to the Administrative Agent and the Senior Lenders.

         (b) The Borrowers, jointly and severally, agree to pay, indemnify, and
hold each Senior Lender and the Administrative Agent harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions
(whether sounding in contract, tort or on any other ground), judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of, or
in any other way arising out of or relating to this Agreement or any action
taken or omitted to be taken without gross negligence by any Senior Lender or
the Administrative Agent with respect to any of the foregoing.

13.      Provisions Define Relative Rights. This Agreement is intended solely
for the purpose of defining the relative rights of the Administrative Agent and
the Senior Lenders on the one hand and the Tranche C Lenders on the other, and
no other Person shall have any right, benefit or other interest under this
Agreement.

                                       12

<Page>


14.      Legend.

         (a) Each Tranche C Lender and the Borrowers will cause the Tranche C
Term Loan Document to bear upon its face the following legend:

                  ALL INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATED TO OTHER
                  INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND
                  IS OTHERWISE SUBJECT TO THE TERMS OF, THE TRANCHE C
                  INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS OF THE
                  DATE HEREOF, AS THE SAME MAY BE AMENDED, SUPPLEMENTED OR
                  OTHERWISE MODIFIED FROM TIME TO TIME, AMONG CPI AEROSTRUCTURES
                  INC., KOLAR, INC., JPMORGAN CHASE BANK AS ADMINISTRATIVE AGENT
                  FOR THE LENDERS PARTIES TO THE CREDIT AGREEMENT REFERRED TO IN
                  THE TRANCHE C SUBORDINATION AGREEMENT, AND THE HOLDERS FROM
                  TIME TO TIME OF THE OBLIGATIONS ARISING UNDER THE SUBORDINATED
                  LOAN DOCUMENTS REFERRED TO IN THE TRANCHE C SUBORDINATION
                  AGREEMENT.

         (b) Each Tranche C Lender, and each Borrower will cause each
Subordinated Security Document to include the following legend:

                  THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
                  TRANCHE C INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS
                  OF THE DATE HEREOF, AS THE SAME MAY BE AMENDED, SUPPLEMENTED
                  OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG CPI
                  AEROSTRUCTURES INC., KOLAR, INC., JPMORGAN CHASE BANK, AS
                  ADMINISTRATIVE AGENT FOR THE LENDERS PARTIES TO THE RESTATED
                  CREDIT AGREEMENT REFERRED TO IN THE TRANCHE C SUBORDINATION
                  AGREEMENT, AND THE HOLDERS FROM TIME TO TIME OF THE
                  OBLIGATIONS ARISING UNDER THE SUBORDINATED LOAN DOCUMENTS
                  REFERRED TO IN THE TRANCHE C SUBORDINATION AGREEMENT,
                  INCLUDING THE OBLIGATIONS ARISING UNDER THE TRANCHE C NOTE.

15.      Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full.

                                       13

<Page>

16.      Authority of Agent. The Borrowers and the Tranche C Lenders acknowledge
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the Senior
Lenders, be governed by the Restated Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them but,
as between the Administrative Agent on the one hand, and the Borrowers and the
Tranche C Lenders, on the other hand, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Senior Lenders with full and
valid authority so to act or refrain from acting, and neither the Borrowers nor
any Tranche C Lender shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

17.      Notices. All notices, requests and demands to or upon the
Administrative Agent, either of the Borrowers or any Tranche C Lender to be
effective shall be in writing (or by fax or similar electronic transfer
confirmed in writing) and shall be deemed to have been duly given or made (1)
when delivered by hand or (2) if given by mail, five (5) days after deposit in
the mails by certified mail, return receipt requested, or (3) if by fax or
similar electronic transfer, when sent and receipt has been confirmed or (4) if
by reputable courier service guaranteeing next business day delivery, when
received, addressed as follows:

CPI:                                    CPI Aerostructures, Inc.
                                        200A Executive Drive
                                        Edgewood, NY 11717
                                        Attn: Edward J. Fred, President
                                        Telecopier No.: (516) 586-5840

with a copy to:                         Graubard Miller
                                        600 Third Avenue
                                        New York, NY 10016
                                        Attn:  David Alan Miller, Esq.
                                        Telecopier No.:  (212) 818-8881

The Administrative Agent:               JP Morgan Chase Bank
                                        395 North Service Road
                                        Suite 302
                                        Melville, New York 11747
                                        Attn:  Relationship Manager - CPI
                                        Aerostructures, Inc.

If to the Tranche C Lender:             JPMorgan Chase Bank
                                        Real Estate Finance Unit
                                        270 Park Avenue - 43rd Floor
                                        New York, New York 10017

With a copy to:                         JPMorgan Chase Bank
                                        Bank Legal Department
                                        270 Park Avenue - 39th Floor
                                        New York, New York 10017

                                       14

<Page>

The Administrative Agent, the Borrowers and any Tranche C Lender may change
their addresses and transmission numbers for notices by notice in the manner
provided in this Section.

18.      Counterparts. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all the parties shall be lodged
with the Administrative Agent.

19.      Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

20.      Integration. This Agreement represents the agreement of the
Administrative Agent, the Senior Lenders and the Tranche C Lenders with respect
to the subject matter hereof and there are no promises or representations by the
Administrative Agent or any Senior Lender or any Tranche C Lender relative to
the subject matter hereof not reflected herein.

21.      Amendments in Writing; No Waiver; Cumulative Remedies.

         (a) None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Administrative Agent, the Borrowers and each Tranche C Lender;
provided that any provision of this Agreement may be waived by the
Administrative Agent (at the direction of the Required Lenders) in a letter or
agreement executed by the Administrative Agent. Any such waiver, amendment,
supplement or modification shall apply equally to each Senior Lender and each
Tranche C Lender and shall be binding upon all present and future Senior Lenders
and all present and future Tranche C Lenders.

         (b) No failure to exercise, nor any delay in exercising, on the part of
the Administrative Agent or any Senior Lender, any right, power or privilege
hereunder shall operate as a waiver thereof No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

         (c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

22.      Section Headings. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

                                       15

<Page>

23.      Successors and Assigns.

         (a) This Agreement shall be binding upon the successors and assigns of
the Borrowers and the Tranche C Lenders and shall inure to the benefit of the
Administrative Agent, the Senior Lenders and, to the extent applicable, the
Tranche C Lenders, and their respective successors and assigns.

         (b) Upon a successor Administrative Agent becoming the Administrative
Agent under the Restated Credit Agreement, such successor Administrative Agent
automatically shall become the Administrative Agent hereunder with all the
rights and powers of the Administrative Agent hereunder without the need for any
further action on the part of any party hereto.

24.      Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.


                                       16


<Page>




         IN WITNESS WHEREOF, the parties hereto have caused this Tranche C
Intercreditor and Subordination Agreement to be duly executed and delivered as
of the day and year first above written.

- ----------------------------------- --------------------------------------------
JPMorgan Chase Bank                 CPI AEROSTRUCTURES, INC.

As Tranche C Lender                 /s/ Edward J. Fred
                                    ------------------

By /s/                              By: Edward J. Fred, President
- ----------------------------------- --------------------------------------------
JPMorgan Chase Bank                 KOLAR, INC.

as Administrative Agent             /s/ Edward J. Fred
                                    ------------------

By /s/                              By: Edward J. Fred,
                                    Executive Vice President
- ----------------------------------- --------------------------------------------


                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>6
<FILENAME>cpi8k-6252002_1046.txt
<DESCRIPTION>TRANCE C TERM NOTE (6-25-2002)
<TEXT>

                                                                   EXHIBIT 10.46

                                                                       TERM NOTE

                                   (Tranche C)

$704,484.41                                                   New York, New York
                                                                   June 25, 2002

         FOR VALUE RECEIVED, the undersigned, Kolar, Inc, a Delaware corporation
and CPI Aerostructures, Inc. (collectively the "Borrowers"), jointly and
severally hereby unconditionally promise to pay to the order of JPMorgan Chase
Bank (the "Lender") at the office of JPMorgan Chase Bank, located at 395 North
Service Road, Suite 302, Melville, New York 11747, in lawful money of the United
States of America and in immediately available funds, the principal amount of
SEVEN HUNDRED FOUR THOUSAND FOUR HUNDRED EIGHTY FOUR and Forty one cents
($704,484.41) or, if less, the unpaid principal amount of the Term Loan made by
the Lender as a Tranche C Loan pursuant to subsection 2.1 of the Amended and
Restated Credit Agreement, as hereinafter defined. The principal amount shall be
paid in the amounts and on the dates specified in subsection 2.3. The Borrowers
further agree to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in subsection 2.7 of such Credit Agreement.

         The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof, which shall
be attached hereto and made a part hereof, the date and amount of the Term Loan
and the date and amount of each payment or prepayment of principal with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrowers in respect of such Term Loan.

         This Note (a) is one of the Tranche C Term Notes referred to in the
Amended and Restated Credit Agreement dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Borrowers, the Lender, the other banks and financial institutions from
time to time parties thereto and JPMorgan Chase Bank, as agent, (b) is subject
to the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents (as
defined in the Credit Agreement). Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.

         Subordination All indebtedness evidenced hereby is subordinate and
junior in right of payment to the Tranche A Loan, as defined in the Credit
Agreement, pursuant to and to the extent provided in, and is otherwise subject
to the terms of, an Intercreditor and Subordination Agreement, dated as of the
date hereof (the "Subordination Agreement") between and among the Tranche C
Lenders (as defined therein), CPI Aerostructures Inc., and Kolar, Inc., as
Borrowers, and JPMorgan Chase Bank, as administrative agent (together with its
successors and assigns in such capacity, the "Administrative Agent") for the
Lenders under the Credit Agreement, as the same may be amended, supplemented or
otherwise modified from time to time, and the holders from time to time of the
obligations arising under the Subordinated Loan Documents referred to in the
Subordination Agreement, including, without limitation, this Note.

<Page>

         Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

         All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

         THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

- ----------------------------------------- --------------------------------------
CPI AEROSTRUCTURES, INC.                   KOLAR, INC.

By:  /s/ Edward J. Fred                   By:  /s/ Edward J. Fred
     ------------------                        ------------------

Name: Edward J. Fred, President           Name: Edward J. Fred,
                                          Executive Vice President
- ----------------------------------------- --------------------------------------

                                       2

<Page>
<Table>
<Caption>


                          LOANS AND REPAYMENT OF LOANS
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
                                          Amount of                Unpaid Principal
    Date          Amount of Loan       Principal Repaid            Balance of Loans            Notation Made By
- -------------- --------------------- ----------------------- --------------------------- ----------------------------
<S>             <C>                     <C>                      <C>                             <C>

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

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

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

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

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

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

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

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

- -------------- --------------------- ----------------------- --------------------------- ----------------------------
</Table>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.47
<SEQUENCE>7
<FILENAME>cpi8k-6252002_1047.txt
<DESCRIPTION>AMENDMENT TO INTERCREDITOR AGREEMENT (6-25-2002)
<TEXT>

                                                                   EXHIBIT 10.47

         AMENDMENT dated June 25, 2002 TO INTERCREDITOR AND SUBORDINATION
AGREEMENT, dated as of October 9, 1997 ("Original Seller Subordination
Agreement"), among the Subordinated Lenders (as hereinafter defined), CPI
Aerostructures Inc., a New York corporation (hereafter "Holdings" or "CPI"),
Kolar, Inc., a Delaware corporation (hereafter the "Borrower" or "Kolar, Inc."),
and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as
administrative agent (together with its successors and assigns in such capacity,
the "Administrative Agent") for the Senior Lenders.

                                    RECITALS

A. Holdings, the Borrower and the Administrative Agent heretofore entered into a
Credit Agreement (the "Original Credit Agreement") dated as of October 9, 1997,
pursuant to which Chase Manhattan Bank and Mellon Bank, N.A as Lenders
("Original Lenders") made certain term loans to Kolar, Inc., designated therein
as "Tranche A Term Loans" and "Tranche B Term Loans" aggregating $10,375,000.
Holdings is the guarantor of Borrower's obligations under the Tranche A and
Tranche B Loans. As of the date hereof, the outstanding principal balance of the
Tranche A Loan is $931,570 and the outstanding principal balance of the Tranche
B Loan is $275,462.


B. As permitted under the Original Credit Agreement, the Original Lenders
provided lines of credit ("Line of Credit Loans") to Holdings and Borrower, as
co-borrowers, originally aggregating $1,000,000, and increasing to $1,700,000.

C. The Subordinated Obligations represented by the Seller Note (as defined in
the Original Seller Subordination Agreement) are currently subordinated to the
Tranche A and Tranche B Loans and to the Line of Credit Loans and pursuant to
the Original Seller Subordination Agreement, all of the said Loans are secured
pursuant to the Guarantee and Collateral Agreement made by Holdings, the
Borrower in favor of the Administrative Agent dated as of October 9, 1997.

D. Certain terms of the Original Credit Agreement have previously been changed
by certain amendments and waivers, pursuant to which, among other matters, the
repayment terms applicable to the Tranche A and Tranche B Loans have been
changed.

E. JPMorgan Chase Bank holds indebtedness of Borrower in the principal amount of
$704,484.41 representing the net deficiency ("Deficiency Debt") arising from the
sale by an affiliate of JPMorgan Chase Bank of certain equipment previously
leased by said affiliate to Borrower.

F. The parties to the Original Credit Agreement have agreed to amend and restate
the Original Credit Agreement, the purpose of such Amendment and Restatement
being, among other matters:

<Page>

         1. to convert the existing Tranche A Loan and outstanding Line of
Credit Loans into a single Tranche A Loan aggregating $2,631,570 and having a
maturity date of June 30, 2003, as to which Holdings shall be a direct
co-Borrower with Kolar, Inc.; and

         2. to include the Deficiency Debt within the indebtedness of the
Borrower covered by the Original Credit Agreement (as so amended and restated)
and to convert the Deficiency Debt into a term loan having a maturity date of
June 30, 2003 and designated in the Amended and Restated Credit Agreement as the
"Tranche C Loan" having a security interest in all of the assets of Holdings and
the Borrower, which Tranche C Loan shall be subordinated to the Tranche A and
Tranche B Loans as to payment and as to such security interest, subject to the
terms of this Agreement;.

G. The Subordinated Lenders have agreed that the Seller Note and the
Subordinated Obligations shall continue to be subordinated and junior in right
of payment to the Tranche A and Tranche B Loans and in addition shall be
subordinated and junior in right of payment to the Tranche C Loan, and for such
purpose are entering into this Amendment and are contemporaneously herewith
executing an amended and restated Seller Note as defined below.

H. Capitalized term used herein, other than those defined or redefined below,
shall have the meanings ascribed to them in the Original Subordination
Agreement.

         NOW THEREFORE, in consideration of the agreement of the Senior Lenders,
the Administrative Agent and the other parties to the Original Credit Agreement
to execute deliver and perform the Amended and Restated Credit Agreement, and
for other good and valuable consideration, the parties hereto hereby agree that
the Original Seller Subordination Agreement shall be amended as follows:

         1.       Definitions.


         (a) The following definitions set forth in section 1(b) of the Original
Seller Subordination Agreement shall be amended in their entirety to read as
follows:

                  "KMI": Ralok, Inc., formerly known as Kolar Machine, Inc.

                  "Seller Note": the 8% Convertible Subordinated Promissory
         Note, dated October 9, 1997, issued by the Borrower to KMI, as amended
         and restated as of the date hereof (hereafter the "Amended and Restated
         Seller Note") together with any replacement thereof in whole or in
         part, in each case as amended, supplemented or otherwise modified from
         time to time hereafter.

                  "Senior Credit Agreement": the Credit Agreement, dated as of
         October 9, 1997, among Holdings, the Borrower, the Administrative Agent
         and the Lenders parties thereto from time to time, as such Credit
         Agreement has heretofore been amended and is being amended and restated
         in the Amended and Restated Credit Agreement executed and delivered as
         of the date hereof, and as the same may be further amended,
         supplemented or otherwise modified from time to time, together with any
         one or more successive increases, renewals, extensions, refundings,
         deferrals, restructurings, replacements or refinancings of, or
         additions to, the arrangements provided in such Credit Agreement or
         Amended and Restated Credit Agreement (whether provided by the original
         Administrative Agent and Lenders under such Amended and Restated Credit
         Agreement or a successor Administrative Agent or other Lenders).

                                       2

<Page>

                  "Subordinated Lender Pari Passu Share" as defined in Section
         2(f), as added by this Amendment..

                  "Senior Loans": the loans made by the Senior Lenders (or any
         of them) to Holdings or the Borrower in connection with the Senior
         Credit Agreement (including, for avoidance of doubt, the Tranche C
         Loan) or the Additional Senior Debt.

                  "Subordinated Loan Documents": the collective reference to the
         Seller Note, the Subordinated Guarantee, the Subordinated Security
         Documents and any other documents or instruments that from time to time
         evidence the Subordinated Obligations or secure or support payment or
         performance thereof, all as the same have previously been amended, are
         being amended contemporaneously herewith or are hereafter amended with
         the consent of the Administrative Agent.

         (b) The following definitions are added:

                  This "Agreement" refers to the Original Seller Subordination
         Agreement, as previously amended, as amended by this amendment as it
         may hereafter be amended with the consent of the Administrative Agent.

                  "Original Seller Subordination Agreement" as defined in the
         Introduction to this Amendment.

                  "Restated Note" means the Amended and Restated Seller Note
         being executed by Ralok, Inc. contemporaneously herewith.

                  "Tranche C Lenders" means the Lender or Lenders under the
         Senior Credit Agreement holding all or a portion of the Tranche C Loan.

                  "Tranche C Loan" as defined in Recital E (2).

         (c) Definitions included in the Original Seller Subordination Agreement
which are not specifically amended hereby shall continue to apply to the
Original Seller Subordination Agreement as amended hereby.

         2.       Tranche C Subordination Modification in Certain Events

         (a) Section 2 of the Original Seller Subordination Agreement is
modified by adding, at the end thereof, an additional subsection 2(f) which
reads as follows:

                                       3
<Page>

                  "(f) (i) Notwithstanding the forgoing, if, pursuant to the
         Seller Note, the maturity date of the Seller Note is extended to a date
         which is after September 28, 2005 (respectively, the "Trigger
         Extension" and the "Trigger Extension Date"), then any payments made to
         a Lender or the Administrative Agent in respect of the Tranche C Loan
         (the "Tranche C Payment") after the Trigger Extension Date, whether of
         principal or interest, shall be shared by the Tranche C Lenders with
         the Subordinated Lenders, pro rata in accordance with the respective
         aggregates of the principal and interest outstanding (A) pursuant to
         the Seller Note and (B) in respect of the Tranche C Loan on the date
         such Tranche C Payment is received. Any amount payable to the
         Subordinated Lenders pursuant to the preceding sentence is referred to
         as the "Subordinated Lender Pari Passu Share."

                           (ii) In order to give effect to the preceding
         paragraph, if a Trigger Extension occurs and any Tranche C Lender or
         the Administrative Agent receives a Tranche C Payment after the Trigger
         Extension Date, such Tranche C Lender or the Administrative Agent shall
         be deemed to have received such payment in trust for the Subordinated
         Lenders to the extent of the Subordinated Lender Pari Passu Share. The
         Tranche C Lender or the Administrative Agent, as the case may be, shall
         give the Subordinated Lenders written notice of such receipt within
         five (5) business days of such receipt and shall, within ten (1)
         business days of such receipt, pay over to the Subordinated Lenders
         Subordinated Lender Pari Passu Share. Notwithstanding the forgoing, the
         obligation of a Tranche C Lender or the Administrative Agent to pay
         over a Subordinated Lender Pari Passu Share to the Subordinated Lenders
         shall be subject to any obligation which may be imposed by law upon the
         Tranche C Lender or the Administrative Agent otherwise to dispose of a
         Tranche C Payment, including any obligation so imposed in accordance
         with any proceeding or obligation (including but not limited to a
         proceeding or obligation under the United States Bankruptcy Code)
         arising out of or in connection with an Insolvency Event.

         3.       Additional Provisions Concerning Subordination

         (a) Section 3(a) of the Original Seller Subordination Agreement is
amended to read as follows:

                  "(1) all Senior Obligations shall be paid in full before any
         payment or distribution is made with respect to the Subordinated
         Obligations; provided, however, that the Subordinated Lender shall be
         entitled to payment of the Subordinated Lender Pari Passu Share under
         the circumstances described in Section 2(f)."

         (b) Section 3(c) of the Original Seller Subordination Agreement is
amended to read as follows:

                  "(c) If any payment or distribution, whether consisting of
         money, property or securities, shall be collected or received by any
         Subordinated Lender in respect of the Subordinated Obligations, except
         payments permitted to be made at the time of payment as expressly
         provided in Section 2(b), such Subordinated Lender forthwith shall
         deliver the same to the Administrative Agent for the account of the
         Senior Lenders, in the form received, duly indorsed to the
         Administrative Agent, if required, to be applied to the payment or
         prepayment of the Senior Obligations until the Senior Obligations are
         paid in full; provided, however, that if the Tranche A and Tranche B
         Loans have been paid in full, the Subordinated Lenders shall be
         entitled to retain an amount equal to the Subordinated Lender Pari
         Passu Share with respect to payments made under the circumstances
         described in Section 2(f). Until so delivered, such payment or
         distribution shall be held in trust by such Subordinated Lender as the
         property of the Administrative Agent, for the account of the Senior
         Lenders, segregated from other funds and property held by such
         Subordinated Lenders."

                                       4

<Page>

         4.       Rights in Collateral

         (a) Subsection 4(b)(2) of the Original Seller Subordination Agreement
is amended to read as follows:

                  "(2) Second, to the payment in full of all Senior Obligations
         in such order as the Administrative Agent may elect in its sole
         discretion; provided, however, that if the Tranche A and Tranche B
         Loans have been paid in full, the Subordinated Lenders shall be
         entitled to payment of the Subordinated Lender Pari Passu Share with
         respect to payments made in respect of the Tranche C Loan under the
         circumstances described in Section 2(f)."

         5.       Subrogation. Section 5 of the Original Seller Subordination
Agreement is amended to add the following sentence at the end thereof:

                  "Notwithstanding the foregoing, if all of the Tranche A and
         Tranche B Loans have been paid in full and a Trigger Extension shall
         have occurred, the Subordinated Lenders shall be subrogated to the
         rights of the Senior Lenders (1) to the extent of the Subordinated
         Lender Pari Passu Share notwithstanding that the Tranche C Loan has not
         been paid in full, and (2) to the extent of the entire remaining amount
         due under the Seller Note after the Tranche C Loan has been paid in
         full.

         6.       Representations and Warranties.

         In order to induce the Administrative Agent and the Lenders to enter
into this Amendment to the Original Seller Subordination Agreement, each of the
Borrowers hereby jointly and severally represent and warrant to the
Administrative Agent and each Lender that:

         (a) (1) the Amended and Restated Seller Note has been issued to and
accepted by it for good and valuable consideration, (2) the Amended and Restated
Seller Note is held by such Subordinated Lender free and clear of any security
interests, liens, charges or encumbrances whatsoever arising from, through or
under such Subordinated Lender, other than the interest of the Senior Lenders
under the Original Seller Subordination Agreement as amended hereby, (3) the
Amended and Restated Seller Note is payable solely and exclusively to such
Subordinated Lender and to no other Person, and (4) the Seller Note as so
amended constitutes the only evidence of the obligations evidenced thereby;

                                       5

<Page>

         (b) such Subordinated Lender has the corporate power and authority and
the legal right to execute and deliver and to perform its obligations under this
Amendment and has taken all necessary corporate action to authorize its
execution, delivery and performance of this Agreement;

         (c) this Amendment constitutes the legal, valid and binding obligations
of such Subordinated Lender;

         (d) the execution, delivery and performance of this Amendment and the
Amended and Restated Seller Note will not violate any provision of any law, rule
or regulation or any contractual obligation of such Subordinated Lender and will
not result in the creation or imposition of any lien on any of the properties or
revenues of such Subordinated Lender pursuant to any law, rule or regulation
affecting or any contractual obligation of such Subordinated Lender, except the
interest of the Senior Lenders under this Agreement; and

         (e) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or governmental authority and no consent of any other
Person (including, without limitation, any stockholder or creditor of such
Subordinated Lender), is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment and the Amended and
Restated Seller Note.

         7.       No Representation by Administrative Agent. Neither the
Administrative Agent nor any Senior Lender has made, and n one of them hereby or
otherwise makes to the Subordinated Lenders, any representations or warranties,
express, or implied, nor does the Administrative Agent or any Senior Lender
assume any liability to any Subordinated Lender with respect to: (a) the
financial or other condition of obligors in respect of the Senior Obligations or
the Subordinated Obligations, (b) the enforceability, validity, value or
collectibility of the Senior Obligations or the Subordinated Obligations, any
collateral therefor, or any guarantee or security which may have been granted in
connection with any of the Senior Obligations or the Subordinated Obligations or
(c) Holdings' or the Borrower's title or right to transfer any collateral or
security.

         8.       Expenses. Holdings and the Borrower, jointly and severally,
agree to pay or reimburse the Administrative Agent and each Senior Lender, upon
demand, for all its costs and expenses in connection with the negotiation and
execution of this Amendment and the Amended and Restated Seller Note.

         9.       Notices. Section 19 of the Original Seller Subordination
Agreement is amended to change addresses to which notices shall be given, as
follows:

If the Administrative Agent:     JPMorgan Chase Bank
                                 395 North Service Road
                                 Suite 302
                                 Melville, New York 11747
                                 Attn: Relationship Manager -
                                 CPI Aerostructures, Inc.

                                       6

<Page>

If to Holdings:                  CPI Aerostructures, Inc.
                                 200A Executive Drive
                                 Edgewood, NY 11717
                                 Attn: Edward J. Fred, President
                                 Fax:  (516) 586-5840

If to the Borrower:              Kolar, Inc.
                                 200A Executive Drive
                                 Edgewood, NY 11717
                                 Attn: Edward J. Fred, President
                                 Fax:  (516) 586-5840

If to the Subordinated Lender:   Ralok, Inc.
                                 c/o Daniel Liquori
                                 1001 Bay Road, #210C
                                 Vero Beach, Florida 32963

With a copy to:                  David Holstein
                                 Green & Seifter, Attorneys, PLLC.
                                 900 One Lincoln Center
                                 Syracuse, New York 13202
                                 Fax:( 315) 422-3549



         10.      Counterparts. This Amendment may be executed by one or more of
the parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Amendment signed by all the parties shall be lodged
with the Administrative Agent.

         11.      Integration. This Amendment to Original Seller Subordination
Agreement represents the agreement of the Administrative Agent and the Senior
Lenders and the Subordinated Lenders with respect to the subject matter hereof
and there are no promises or representations by the Administrative Agent or any
Senior Lender or any Subordinated Lender relative to the subject matter hereof
not reflected herein.



                             Signature Page Follows


                                       7

<Page>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to Intercreditor and Subordination Agreement to be duly executed and
delivered as of the day and year first above written.

                                 RALOK, INC.

                                 By:  /s/ Daniel Liguori
                                      ------------------
                                      Name:        Daniel Liguori
                                      Title:       President

                                 CPI AEROSTRUCTURES, INC.

                                 By: /s/ Edward J. Fred
                                     ------------------
                                      Name:        Edward J. Fred
                                      Title:       President

                                 KOLAR, INC.

                                 By: /s/ Edward J. Fred
                                    -------------------
                                      Name:        Edward J. Fred
                                      Title:       Executive Vice President

                                 JPMorgan Chase Bank, as Administrative Agent

                                 By:  /s/ Lucille McArdle
                                      -------------------
                                      Name:        Lucille McArdle
                                      Title:       Vice President


                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.48
<SEQUENCE>8
<FILENAME>cpi8k-6252002_1048.txt
<DESCRIPTION>AMENDMENT TO GUARANTEE AGREEMENT (6-25-2002)
<TEXT>

                                                                   EXHIBIT 10.48

         AMENDMENT dated as of June 25, 2002 to GUARANTEE AND COLLATERAL
AGREEMENT, dated as of October 9, 1997 ("Original Guarantee Agreement"), made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided in the Original Guarantee Agreement, the "Grantors"),
in favor of JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), as
Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions (the "Lenders") from time to time parties
to the Amended and Restated Credit Agreement dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Amended
Credit Agreement"), among CPI Aerostructures, Inc. and Kolar, Inc. (the
"Borrowers"), the Lenders and the Administrative Agent.

                                    RECITALS:

A. Pursuant to a Credit Agreement ("Original Credit Agreement") originally dated
as of October 9, 1997, the Lenders made extensions of credit to Kolar, Inc. upon
the terms and subject to the conditions set forth therein; and the Original
Credit Agreement has been amended and restated pursuant to the Amended and
Restated Credit Agreement;

B. Pursuant to the Amended and Restated Credit Agreement, CPI Aerostructures,
Inc. ("CPI") the parent corporation and guarantor of the obligations of Kolar,
Inc., became a co-borrower with Kolar, Inc.

C. Pursuant to the Amended and Restated Credit Agreement, an additional amount
of indebtedness, described therein as the "Tranche C Loan" was added to the
indebtedness of Ralok, subordinate and junior in right of payment to the
indebtedness of CPI and Ralok, Inc. described as the "Tranche A Loan" and the
Tranche B Loan."

D. The parties desire to confirm, for avoidance of doubt, that the obligations
of CPI and the obligations of each other Grantor and Guarantor (if any) under
the Original Guarantee Agreement relate to the Tranche C Loan as well as to the
Tranche A and Tranche B Loans

         NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Amended and Restated
Credit Agreement each Grantor hereby agrees with the Administrative Agent, for
the ratable benefit of the Lenders, as follows:

         1.       Borrower Obligations       For avoidance of doubt:

         (a) the term "Borrower Obligations" as defined in the Original
Guarantee Agreement shall include the obligations of Kolar, Inc. to pay the
Tranche C Loan as defined in the Amended and Restated Credit Agreement; and

         (b) the term "this Agreement" as used in the Original Guarantee
Agreement shall include the Original Guarantee Agreement as hereby amended.

         2.       No Other Changes           Except as specifically modified
hereby allof the terms and conditions of the Original Guarantee Agreement shall
remain in full force and effect.

         3.       Counterparts.              This Amendment may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

                             Signature Page Follows



<Page>




IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.

                                       KOLAR, INC.


                                       By: /s/ Edward J. Fred
                                           ---------------------------
                                                Title:  Edward J. Fred
                                                        Executive Vice President


                                       CPI AEROSTRUCTURES, INC.


                                       By:  /s/ Edward J. Fred
                                            --------------------------
                                                Title:  Edward J. Fred
                                                        President


The foregoing amendment is accepted and agreed.

JPMORGAN CHASE BANK

As Administrative Agent



By: /s/










</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.49
<SEQUENCE>9
<FILENAME>cpi8k-6252002_1049.txt
<DESCRIPTION>TRANCHE C MORTGAGE, FIXTURE FILING AND ASSIGNMENT
<TEXT>
                                                                   EXHIBIT 10.49

                          MORTGAGE, FIXTURE FILING AND
                         ASSIGNMENT OF LEASES AND RENTS


                                      from



                             KOLAR, INC., Mortgagor


                                       to


                              JPMORGAN CHASE BANK,
                       as Administrative Agent, Mortgagee



                            DATED AS OF JUNE 25, 2002


                          PRINCIPAL AMOUNT: $704,484.41


                       After recording, please return to:



                             Herrick, Feinstein LLP
                                  2 Park Avenue
                            New York, New York 10016



                             ATTN: David Rosen, Esq.



<Page>

                                                                      [New York]
                          MORTGAGE, FIXTURE FILING AND
                         ASSIGNMENT OF LEASES AND RENTS

                                   (Tranche C)

         THIS MORTGAGE, FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS dated
as of June 25, 2002 is made by KOLAR, INC., a Delaware corporation
("Mortgagor"), whose address is 200A Executive Drive, Edgewood, New York 11717
to JPMORGAN CHASE BANK, a New York banking corporation ("JPM"), as
Administrative Agent for the Lenders (each term as defined in the Restated
Credit Agreement hereinafter defined; JPM, in such capacity, "Mortgagee"), whose
address is 270 Park Avenue, New York, New York 10017. References to this
"Mortgage" shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.

                                   Background

A. Mortgagor is the owner of the parcels of real property described on Schedule
A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"Improvements"), being collectively referred to as the "Real Estate").

B. Mortgagor is a party to that certain Amended and Restated Credit Agreement
dated as of even date herewith (as the same may be amended, supplemented,
modified, extended, restated or replaced from time to time, the "Restated Credit
Agreement") among Mortgagor, CPI Aerostructures, Inc., the several banks and
other financial institutions from time to time parties thereto (the "Lenders")
and JPM, as Administrative Agent for the Lenders. In the event of any conflict
between the terms and provisions of this Mortgage and the provisions of the
Restated Credit Agreement, the applicable terms and provisions of the Mortgage
shall govern and control. Capitalized terms used and not defined herein shall
have the respective meanings assigned thereto in the Restated Credit Agreement.

C. Pursuant to the Restated Credit Agreement, JPM as the Tranche C Term Loan
Lender thereunder has made a certain Tranche C Term Loan to Mortgagor in the
aggregate principal amount of $704,484.41, (the "Tranche C Loan").

D. The Tranche C Loan is evidenced by a promissory note of Mortgagor made
payable to the order of the Mortgagee (as the same may be amended, restated,
replaced, modified or otherwise supplemented from time to time, collectively,
the "Tranche C Note"). The Tranche C Loan bears interest at the rate set forth
in the Credit Agreement. References in this Mortgage to the "Default Rate" shall
mean, at any time, the rate of interest applicable to overdue principal amounts
of the Tranche C Loan as provided in the Credit Agreement.

E. It is a condition precedent to the obligation of JPM to make the Tranche C
Loan to Mortgagor that Mortgagor shall have executed and delivered this Mortgage
to Mortgagee for the benefit of JPM.



<Page>


                                Granting Clauses

         For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:

         (a) (i) the repayment of the indebtedness evidenced by the Tranche C
Note, and (ii) all interest (including, without limitation, interest accruing
after the maturity of the Tranche C Loan and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Mortgagor whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) and
fees, indemnities, costs, expenses (including, without limitation, all
reasonable fees and disbursements of counsel to Mortgagee that are required to
be paid by Mortgagor in respect of the Tranche C Note pursuant to the terms of
the Restated Credit Agreement or this Mortgage) or otherwise payable thereon
(the items set forth in clauses (i) and (ii) being referred to collectively as
the "Indebtedness"); and

         (b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "Obligations") whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Tranche C
Loan under the Restated Credit Agreement, the Tranche C Note, this Mortgage, any
other document securing payment of the Indebtedness (the "Security Documents")
and any amendments, supplements, extensions, renewals, restatements,
replacements or modifications of any of the foregoing (the Note, the Security
Documents and all other documents and instruments from time to time evidencing,
securing or guaranteeing the payment of the Indebtedness or the performance of
the Obligations, as any of the same may be amended, supplemented, extended,
renewed, restated, replaced or modified from time to time, are collectively
referred to as the "Loan Documents");

MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:

         (A) the Real Estate;

         (B) all the estate, right, title, claim or demand whatsoever of
Mortgagor, in possession or expectancy, in and to the Real Estate or any part
thereof;

         (C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages, sewer
rights, waters, water courses, water and riparian rights, development rights,
air rights, mineral rights and all estates, rights, titles, interests,
privileges, licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions, remainders,
rents, issues, profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Real Estate to the center
line thereof;

         (D) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions thereto
and substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or subsequently
acquired by Mortgagor and now or subsequently attached to, or contained in or
used or usable in any way in connection with any operation or letting of the
Real Estate, including but without limiting the generality of the foregoing, all
screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs"
storm doors and windows, furniture and furnishings, heating, electrical, and
mechanical equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and systems,
stoves, ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire prevention
and extinguishing apparatus and materials, security systems, motors, engines,
machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of
every kind and description Call of the foregoing in this paragraph (D) being
referred to as the "Equipment");

                                       2
<Page>

         (E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to, the Real
Estate and the Equipment, subsequently acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor on the Real Estate, immediately
upon such acquisition, release, construction, assembling or placement,
including, without limitation, any and all building materials whether stored at
the Real Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;

         (F) all right, title and interest of Mortgagor in, to and under all
leases, subleases, underlettings, concession agreements, management agreements,
licenses and other agreements relating to the use or occupancy of the Real
Estate or the Equipment or any part thereof, now existing or subsequently
entered into by Mortgagor and whether written or oral and all guarantees of any
of the foregoing (collectively, as any of the foregoing may be amended,
restated, extended, renewed or modified from time to time, the "Leases"), and
all rights of Mortgagor in respect of cash and securities deposited thereunder
and the right to receive and collect the revenues, income, rents, issues and
profits thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment of the
Mortgaged Property (as defined below) (collectively, the "Rents");

         (G) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of the
Real Estate or the Equipment or any part thereof; all general intangibles
related to the operation of the Improvements now existing or hereafter arising;

         (H) all unearned premiums under insurance policies now or subsequently
obtained by Mortgagor relating to the Real Estate or Equipment and Mortgagor's
interest in and to all such insurance policies and the proceeds thereof
(including title insurance policies) including the right to collect and receive
such proceeds, subject to the provisions relating to insurance generally set
forth below; and all awards and other compensation, including the interest
payable thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Real Estate or Equipment for the taking
by eminent domain, condemnation or otherwise, of all or any part of the Real
Estate or any easement or other right therein;

                                       3

<Page>

         (I) all right, title and interest of Mortgagor, in and to (i) all
contracts from time to time executed by Mortgagor or any manager or agent on its
behalf relating to the ownership, construction, maintenance, repair, operation,
occupancy, sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of the Real
Estate or any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of Equipment
(collectively, the "Contracts"), (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Real Estate or any
part thereof (collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");

         (J) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for the
payment of premiums on insurance policies covering the foregoing property or
otherwise on deposit with or held by Mortgagee as provided in this Mortgage; all
capital, operating, reserve or similar accounts held by or on behalf of
Mortgagor and related to the operation of the Mortgaged Property, whether now
existing or hereafter arising and all monies held in any of the foregoing
accounts and any certificates or instruments related to or evidencing such
accounts;

         (K) all accounts and revenues arising from the operation of the
Improvements including, without limitation, (i) any right to payment now
existing or hereafter arising for rental of space or for goods sold or leased or
for services rendered, whether or not yet earned by performance, arising from
the operation of the Improvements or any other facility on the Mortgaged
Property and (ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising from the
use of the American Express Card, the Visa Card, the Carte Blanche Card, the
Mastercard or any other credit card, including those now existing or hereafter
created, substitutions therefor, proceeds thereof (whether cash or non-cash,
movable or immovable, tangible or intangible) received upon the sale, exchange,
transfer, collection or other disposition or substitution thereof and any and
all of the foregoing and proceeds therefrom; and

         (L) all proceeds, both cash and noncash, of the foregoing;

         (All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "Premises", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "Mortgaged Property").

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby
mortgaged unto Mortgagee, its successors and assigns for the uses and purposes
set forth, until the Indebtedness is fully paid and the Obligations fully
performed.

                                       4
<Page>

SUBORDINATION

                  Notwithstanding anything to the contrary contained herein,
this Mortgage is and shall at all times whether before, after or during the
pending of any bankruptcy, reorganization or other insolvency proceeding be
junior, subject and subordinate in each and every respect to the first lien of
that certain Mortgage, Fixture Filing and Assignments of Rents and Leases dated
as of October 9, 1997 and recorded on October 9, 1997 in the office of the
County Clerk for Tompkins County in Book 1127, page 225 made by Mortgagor to JPM
(formerly The Chase Manhattan Bank) as Administrative Agent, (in such capacity,
including its successors and assigns, "Prior Mortgagee"), and to any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements thereof and increases in the amount
secured thereby (the "Prior Mortgage"), and to all Permitted Encumbrances (as
defined in the Prior Mortgage), and the Prior Mortgage shall be and remain a
first lien against the premises encumbered hereby for so long as the debt
secured by the Prior Mortgage is outstanding.

                  For so long as the debt secured by the Prior Mortgage shall be
outstanding, Mortgagor and Mortgagee agree that:

                  (a) Mortgagee shall not amend or consent to any amendment to
or other modification of the Tranche C Note or this Mortgage without the prior
written consent of the Tranche A Loan Lenders;

                  (b) The rights of Mortgagee to take, demand or receive,
directly or indirectly, by set-off, redemption, purchase or in any other manner,
any payment or security for the indebtedness evidenced by the Tranche C Note are
subject to and governed by that certain Tranche C Intercreditor and
Subordination Agreement dated as of the date hereof by and among Mortgagor,
Mortgagee, JPM as the Tranche C Loan Lender, and CPI Aerostructures, Inc., as
the same may be amended, supplement, restated, replaced or otherwise modified
from time to time.

                              Terms and Conditions

                  Mortgagor further represents, warrants, covenants and, agrees
with Mortgagee as follows:

1. Warranty of Title. Mortgagor warrants the title to the Premises, subject only
to the matters that were set forth in Schedule B of the title insurance policy
previously issued to Mortgagee to insure the lien of a Mortgage previously
issued to Mortgagee by Tycor Title Insurance Company on October 9, 1997, in
respect of the Mortgage to which this Mortgage is subordinate as provided herein
(the "Permitted Exceptions"). Mortgagor also represents and warrants that (i)
the execution and delivery of this Mortgage by the Mortgagor does not constitute
a "fraudulent conveyance" within the meaning of Title 11 of the United States
Code as now constituted or under any other applicable statute, and (ii) no
bankruptcy or insolvency proceedings are pending or contemplated by or against
the Mortgagor.

                                       5
<Page>

2. Payment of Indebtedness. Mortgagor shall pay the Indebtedness at the times
and places and in the manner specified in the Note and shall perform all the
Obligations.

3. Requirements.

         (a) Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of each of the United States of America, any
State and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy" possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred-to as the "Legal Requirements".

         (b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Mortgagor shall not by
act or omission impair the integrity of any of the Real Estate so as to
constitute an illegal subdivision or to prohibit the Premises and Improvements
from being conveyed as one zoning or tax lot. Mortgagor represents that the
Premises are not part of a larger tract of land owned by Mortgagor or its
affiliates or otherwise considered as part of one zoning or tax lot, or, if they
are that any authorization or variance required for the subdivision of such
larger tract which a sale of the Premises would entail has been obtained from
all appropriate Governmental Authorities so that the Premises and Improvements
constitute one zoning or tax lot capable of being conveyed as such. Any act or
omission by Mortgagor which would result in a violation of any of the provisions
of this subsection shall be void.

         (c) Mortgagor shall have the right to contest or object in good faith
to the validity or applicability to the Premises of any Legal Requirement by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Mortgagor's covenant to comply
with any such Legal Requirement as provided in this Section unless (i) Mortgagor
has given prior written notice to Mortgagee of Mortgagor's intent so to contest
or object to a Legal Requirement, (ii) Mortgagor shall demonstrate to
Mortgagee's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Mortgaged Property, or any part thereof, for the
noncompliance with the contested Legal Requirement prior to final determination
of such proceedings and (iii) Mortgagor shall furnish a good and sufficient bond
or surety as requested by and reasonably satisfactory to Mortgagee in the amount
equal to any interest and penalty which may be imposed for noncompliance with
such Legal Requirement and which could become a charge against the Real Estate
or any part of the Mortgaged Property.

                                       6

<Page>

4. Payment of Taxes and Other Impositions. (a) Promptly when due, Mortgagor
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges, vault taxes, and all other public charges
even if unforeseen or extraordinary, imposed upon or assessed against or which
may become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall, within 30 days after request by Mortgagee,
deliver to Mortgagee (i) original or copies of receipted bills and cancelled
checks evidencing payment of such Imposition if it is a real estate tax or other
public charge and (ii) evidence acceptable to Mortgagee showing the payment of
any other such Imposition. If by law any Imposition, at Mortgagor's option, may
be paid in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition) , Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.

         (b) Nothing herein shall affect any right or remedy of Mortgagee under.
this Mortgage or otherwise, without notice or demand to Mortgagor, to pay any
Imposition after the date such Imposition shall have become due. Any sums paid
by Mortgagee in discharge of any Impositions shall be payable on demand by
Mortgagor to Mortgagee together with interest at the Default Rate.

         (c) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.

         (d) Mortgagor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Mortgagor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Mortgagor has given prior written notice to Mortgagee of Mortgagor's intent
so to contest or object to an Imposition, (ii) Mortgagor shall demonstrate to
Mortgagee's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Mortgaged Property, or any part thereof, to satisfy
such Imposition prior to final determination of such proceedings and (iii)
Mortgagor shall furnish a good and sufficient bond or surety as requested by and
reasonably satisfactory to Mortgagee in the amount of the Impositions which are
being contested plus any interest and penalty which may be imposed thereon and
which could become a lien against the Real Estate or any part of the Mortgaged
Property.

         (e) Upon written notice to Mortgagor, Mortgagee shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds and Mortgagor shall not be entitled to interest thereon. Any
funds so collected by Mortgagee shall be used to pay Impositions as they become
due.

                                       7

<Page>

5. Insurance. (a) Mortgagor shall maintain or cause to be maintained on all of
the Premises

                  (i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by such other
further risks and hazards as now are or subsequently may be covered by an "all
risk" policy or a fire policy covering "special" causes of loss. The policy
shall include building ordinance law endorsements and the policy limits shall be
automatically reinstated after each loss;

                  (ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the language
of such endorsement), covering all claims for personal injury, bodily injury or
death, or property damage occurring on, in or about the Premises in an amount
not less than $10,000,000 combined single limit with respect to injury and
property damage relating to any one occurrence plus such excess limits as
Mortgagee shall request from time to time;

                  (iii) when and to the extent required by Mortgagee, insurance
against loss or damage by any other risk commonly insured against by persons
occupying or using like properties in the locality or localities in which the
Real Estate is situated;

                  (iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Mortgagee, but not less than one year's
gross rent or gross income;

                  (v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy including
the "broad form CGL endorsement" (or which incorporates the language of such
endorsement), (including coverage for elevators and escalators, if any). The
policy shall include coverage for independent contractors and completed
operations. The completed operations coverage shall stay in effect for two years
after construction of any Improvements has been completed. The policy shall
provide coverage on an occurrence basis against claims for personal injury,
including, without limitation, bodily injury, death or property damage occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a limit of
not less than that required by Mortgagee with respect to personal injury, bodily
injury or death to any one or more persons or damage to property;

                  (vi) during the course of any construction or repair of the
Improvements, workers, compensation insurance (including employer's liability
insurance) for all employees of Mortgagor engaged on or with respect to the
Premises in such amounts as are reasonably satisfactory to Mortgagee, but in no
event less than the limits established by law;

                  (vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed value form
insurance against "all risks of physical loss," including collapse, water
damage, flood and earthquake and transit coverage, during construction or
repairs of the Improvements, with deductible approved by Mortgagee, in
nonreporting form, covering the total value of work performed and equipment,
supplies and materials furnished (with an appropriate limit for soft costs in
the case of construction);

                                       8

<Page>

                  (viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided the
Improvements contain equipment of such nature, and insurance against rent, extra
expense, business interruption and soft costs, if applicable, arising from any
such breakdown, in such amounts as are reasonably satisfactory to Mortgagee but
not less than the lesser of $1,000,000 or 10% of the value of the Improvements;

                  (ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable agency, flood insurance in an amount satisfactory to
Mortgagee, but in no event less than the maximum limit of coverage available
under the National Flood Insurance Act of 1968, as amended; and

                  (x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.

Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days, prior written notice to Mortgagee, (ii) with respect to
all property insurance, provide for deductibles not to exceed $25,000, contain a
"Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee), with loss payable solely to Mortgagee (modified, if
necessary, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee and be written by insurance companies having an A.M.
Best Company, Inc. rating of A or higher and a financial size category of not
less than XII, or otherwise as approved by Mortgagee, and (iii) contain an
"manuscript" endorsement providing that Mortgagor may not unilaterally cancel
such policy without Mortgagee's prior written consent. Liability insurance
policies shall name Mortgagee as an additional insured and contain a waiver of
subrogation against Mortgagee; all such policies shall indemnify and hold
Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the' adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
satisfactory to Mortgagee. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, or if for any other reason whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.

                                       9

<Page>

         (b) Mortgagor shall deliver to Mortgagee an original of each insurance
policy required to be maintained, or a certificate of such insurance acceptable
to Mortgagee, together with a copy of the declaration page for each such policy.
Mortgagor shall (i) pay as they become due all premiums for such insurance, (ii)
not later than 15 days prior to the expiration of each policy to be furnished
pursuant to the provisions of this Section, deliver a renewed policy or
policies, or duplicate original or originals thereof, marked "premium paid," or
accompanied by such other evidence of payment satisfactory to Mortgagee with
standard non-contributory mortgage clauses in favor of and acceptable to
Mortgagee. Upon request of Mortgagee, Mortgagor shall cause its insurance
underwriter or broker to certify to Mortgagee in writing that all the
requirements of this Mortgage governing insurance have been satisfied.

         (c) If Mortgagor is in default of its obligations to insure or deliver
any such prepaid policy or policies, then Mortgagee, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Mortgagor shall pay to Mortgagee on demand such premium
or premiums so paid by Mortgagee with interest from the time of payment at the
Default Rate.

         (d) Mortgagor shall increase the amount of property insurance required
to equal 100% replacement cost pursuant to the provisions of this Section at the
time of each renewal of each policy (but not later than 12 months from the date
of this Mortgage and each successive 12 month period to occur thereafter) by
using the F.W. Dodge Building Index to determine whether there shall have been
an increase in the replacement value since the most recent adjustment and, if
there shall have been such an increase, the amount of insurance required shall
be adjusted accordingly.

         (e) Mortgagor promptly shall comply with and conform to (i) all
provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Mortgagor or to any of the Mortgaged Property or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.

         (f) (f) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty, then provided no Event of Default
shall have occurred and be continuing, (i) if the cost to repair such damage is
less than the lesser of (x) 5% of the replacement cost of the Improvements at
the affected Real Estate site and (y) $100,000, both as determined by Mortgagee
in its sole and absolute discretion, Mortgagor shall have the right to adjust
such loss, and (ii) if the cost to repair such damage exceeds the foregoing
limit but is less than $150,000 as determined by Mortgagee in its sole and
absolute discretion, Mortgagor and Mortgagee shall jointly adjust such loss and,
under both clauses (i)and (ii) above, provided that in each instance (A)
Mortgagor shall have notified Mortgagee in writing within ten (10) days of the
date of such fire or other casualty that Mortgagor elects to repair the
Mortgaged Property substantially to its value, condition and character
immediately prior to such fire or other casualty and (B) the insurance proceeds

                                       10

<Page>

relating to such loss are received by Mortgagee at least six (6) months prior to
the date of the final maturity of the Loans, then the insurance proceeds
relating to such loss shall be paid over to Mortgagor; provided that Mortgagor
shall, promptly after any such damage, repair all such damage regardless of
whether any insurance proceeds have been received or whether such proceeds, if
received, are sufficient to pay for the costs of repair. If the Mortgaged
Property is damaged by fire or other casualty, and the cost to repair such
damage exceeds $150,000, or if an Event of Default shall have occurred and be
continuing, then Mortgagor authorizes and empowers Mortgagee, at Mortgagee's
option and in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
make proof of loss, to adjust and compromise any claim under any insurance
policy, to appear in and prosecute any action arising from any policy, to
collect and receive insurance proceeds and to deduct therefrom Mortgagee's
expenses incurred in the collection process. Each insurance company concerned is
hereby authorized and directed to make payment for all loss directly to
Mortgagee. Mortgagee shall have the right to require Mortgagor to repair or
restore the Mortgaged Property, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or permitted
under any insurance policy relating to repair or restoration. The insurance
proceeds or any part thereof received by Mortgagee may be applied by Mortgagee
toward reimbursement of all costs and expenses of Mortgagee in collecting such
proceeds, and the balance, at Mortgagee's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of maturity,
if payable in installments) and interest due or to become due under the Note, to
fulfill any other Obligation of Mortgagor, to the restoration or repair of the
property damaged, or released to Mortgagor. In the event Mortgagee elects to
release such proceeds to Mortgagor, Mortgagor shall be obligated to use such
proceeds to restore or repair the Mortgaged Property. Application by Mortgagee
of any insurance proceeds toward the last maturing installments of principal and
interest due or to become due under the Note shall not excuse Mortgagor from
making any regularly scheduled payments due thereunder, nor shall such
application extend or reduce the amount of such payments. In the event of
foreclosure of this Mortgage or other transfer of title to the Mortgaged
Property in extinguishment of the Indebtedness, all right, title and interest of
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.

         (g) Upon written notice to Mortgagor, Mortgagee after an Event of
Default shall be entitled to require Mortgagor to pay monthly in advance to
Mortgagee the equivalent of 1/12th of the estimated annual premiums due on such
insurance. Mortgagee may commingle such funds with its own funds and Mortgagor
shall not be entitled to interest thereon. Any funds so collected by Mortgagee
shall be used to pay insurance premiums as they become due.

         (h) Mortgagor may maintain insurance required under this Mortgage by
means of one or more blanket insurance policies maintained by Mortgagor only
with Mortgagee's prior written consent; in the event any such consent shall be
given by Mortgagee, (A) any such policy shall specify, or Mortgagor shall
furnish to Mortgagee a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Premises and the other Mortgaged Property and any sublimits in
such blanket policy applicable to the Premises and the other Mortgaged Property,
(B) each such blanket policy shall include an endorsement providing that, in the
event of a loss resulting from an insured peril, insurance proceeds shall be
allocated to the Mortgaged Property in an amount equal to the coverages required
to be maintained by Mortgagor as provided above and (C) the protection afforded
under any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property.

                                       11
<Page>

6. Restrictions on Liens and Encumbrances. Except for the lien of this Mortgage
and the Permitted Exceptions, and as otherwise expressly permitted under the
Restated Credit Agreement, Mortgagor shall not further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to the lien of this Mortgage and whether recourse or
non-recourse.

7. Due on Sale and Other Transfer Restrictions. Mortgagor shall not sell,
transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property. Further, without the prior written consent of Mortgagee in
its sole discretion, the ultimate beneficial ownership of Mortgagor and the
partners of Mortgagor (in the case of a partnership) shall not be changed or
altered, by sale, assignment, transfer, pledge foreclosure or otherwise, from
the ultimate beneficial ownership on the date hereof.

8. Limitation on Fundamental Changes. Mortgagor agrees that:

         (i) Mortgagor shall not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any liquidation or
dissolution), or acquire by purchase or otherwise all or substantially all the
business or assets of, or any stock or other evidence of beneficial ownership
of, any entity; and

         (ii) Mortgagor shall not engage in any business other than the
ownership and operation of the Mortgaged Property and the business conducted
there as of the date of this Mortgage without the prior written consent of
Mortgagee.

9. Maintenance; No Alteration; Inspection; Utilities. (a) Mortgagor shall
maintain or cause to be maintained all the Improvements in good condition and
repair and shall not commit or suffer any waste of the Improvements. Mortgagor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever. The Improvements
shall not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee.

         (b) Mortgagee and any persons authorized by Mortgagee, at any
reasonable time and as often as may reasonably be desired upon notice given
reasonably in advance, shall have the right to enter and inspect the Premises
and the right to inspect all work done, labor performed and materials furnished
in and about the Improvements and the right to inspect and make copies of all
books, contracts and records of Mortgagor relating to the Mortgaged Property.

         (c) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.

                                       12

<Page>

10. Condemnation/Eminent Domain. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged Property,
or any portion thereof, Mortgagor will notify Mortgagee of the pendency of such
proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's option and in
Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to commence,
appear in and prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any condemnation of the Mortgaged Property, or any
portion thereof, and to settle or compromise any claim in connection with such
condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.

11. Restoration. If Mortgagee elects to release funds to Mortgagor for
restoration of any of the Mortgaged Property, then such restoration shall be
performed only in accordance with the following conditions:

         (a) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be submitted
to and approved by Mortgagee;

         (b) prior to making any advance of restoration funds, Mortgagee shall
be satisfied that the remaining restoration funds are sufficient to complete the
restoration and to pay all related expenses, including interest on the
Indebtedness and real estate taxes on the Premises, during restoration;

         (c) at the time of any disbursement of the restoration funds, (A) no
Default (as defined below) shall then exist, (B) no mechanics, or materialmen's
liens shall have been filed and remain undischarged, except those discharged by
the disbursement of the requested restoration funds and (C) a satisfactory
bring-down or continuation of title insurance on the Premises shall be delivered
to Mortgagee;

         (d) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of satisfactory evidence of the stage of completion and of performance
of the work in a good and workmanlike manner and in accordance with the
contracts, plans and specifications acceptable to Mortgagee;

         (e) with respect to each advance of restoration funds, Mortgagee may
retain 10% of the amount of such advance as a holdback until the restoration is
fully completed;

         (f) the restoration funds shall bear no interest and may be commingled
with Mortgagee's other funds;

                                       13

<Page>

         (g) Mortgagee may impose such other conditions as are customarily
imposed by construction lenders; and

         (h) any restoration funds remaining shall be retained by Mortgagee and
may be applied by Mortgagee, in its sole discretion, to the Indebtedness in the
inverse order of maturity.

12. Leases. (a) Mortgagor shall not (i) execute an assignment or pledge of any
Lease relating to all or any portion of the Mortgaged Property other than in
favor of Mortgagee, or (ii) without the prior written consent of Mortgagee,
execute or permit to exist any Lease of any of the Mortgaged Property.

         (b) As to any Lease consented to by Mortgagee, Mortgagor shall:

                  (i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;

                  (ii) promptly enforce all of the provisions of the Lease on
the part of the lessee thereunder to be performed;

                  (iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of Mortgagor
as lessor or of the lessee thereunder;

                  (iv) exercise, within 5 days after a request by Mortgagee, any
right to request from the lessee a certificate with respect to the status
thereof;

                  (v) simultaneously deliver to mortgagee copies of any notices

of default which Mortgagor may at any time forward to or receive from the
lessee;

                  (vi) promptly deliver to Mortgagee a fully executed
counterpart of the Lease; and

                  (vii) promptly deliver to Mortgagee, upon Mortgagee's request,
an assignment of the Mortgagor's interest under such Lease.

         (c) Mortgagor shall deliver to Mortgagee, within 10 days after a
request by Mortgagee, a written statement, certified by Mortgagor as being true,
correct and complete, containing the names of all lessees and other occupants of
the Mortgaged Property, the terms of all Leases and the spaces occupied and
rentals payable thereunder, and a list of all Leases which are then in default,
including the nature and magnitude of the default; such statement shall be
accompanied by credit information with respect to the lessees and such other
information as Mortgagee may request.

         (d) All Leases entered into by Mortgagor after the date hereof, if any,
and all rights of any lessees thereunder shall be subject and subordinate in all
respects to the lien and provisions of this Mortgage unless Mortgagee shall
otherwise elect in writing.

                                       14

<Page>

         (e) As to any Lease now in existence or subsequently consented to by
Mortgagee, Mortgagor shall not accept a surrender or terminate, cancel, rescind,
supplement, alter, revise, modify or amend such Lease or permit any such action
to be taken nor shall Mortgagor accept the payment of rent more than thirty (30)
days in advance of its due date. The provisions of this subsection are made with
reference to Section 291-f of the Real Property Law of the State of New York.

         (f) If any act or omission of Mortgagor would give any lessee under any
Lease the right, immediately or after lapse of a period of time, to cancel or
terminate such Lease, or to abate or offset against the payment of rent or to
claim a partial or total eviction, such lessee shall not exercise such right
until it has given written notice of such act or omission to Mortgagee and until
a reasonable period for remedying such act or omission shall have elapsed
following the giving of such notice without a remedy being effected.

         (g) In the event of the enforcement by Mortgagee of any remedy under
this Mortgage, the lessee under each Lease shall, if requested by Mortgagee or
any other person succeeding to the interest of Mortgagee as a result of such
enforcement, attorn to Mortgagee or to such person and shall recognize Mortgagee
or such successor in interest as lessor under the Lease without change in the
provisions thereof; provided however, that Mortgagee or such successor in
interest shall not be: (i) bound by any payment of an installment of rent or
additional rent which may have been made more than 30 days before the due date
of such installment; (ii) bound by any amendment or modification to the Lease
made without the consent of Mortgagee or such successor in interest; (iii)
liable for any previous act or omission of Mortgagor (or its predecessors in
interest); (iv) responsible for any monies owing by Mortgagor to the credit of
such lessee or subject to any credits, offsets, claims, counterclaims, demands
or defenses which the lessee may have against Mortgagor (or its predecessors in
interest); (v) bound by any covenant to undertake or complete any construction
of the Premises or any portion thereof; or (vi) obligated to make any payment to
such lessee other than any security deposit actually delivered to Mortgagee or
such successor in interest. Each lessee or other occupant, upon request by
Mortgagee or such successor in interest, shall execute and deliver an instrument
or instruments confirming such attornment. In addition, Mortgagor agrees that
each Lease entered into after the date of this Mortgage shall include language
to the effect of subsections (d)-(g) of this Section; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.

13. Further Assurances/Estoppel Certificates. To further assure Mortgagee's
rights under this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any
act or execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
required by Mortgagee to confirm the lien of this Mortgage and all other rights
or benefits conferred on Mortgagee. Mortgagor, within 5 business days after
request, shall deliver, in form and substance satisfactory to Mortgagee, a
written statement, duly acknowledged, setting forth the amount of the
Indebtedness, and whether any offsets, claims, counterclaims or defenses exist
against the Indebtedness and certifying as to such other matters as Mortgagee
shall reasonably request.

                                       15

<Page>

14. Mortgagee's Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor, Mortgagee, without waiving or releasing
Mortgagor from any obligation or default under this Mortgage, may, at any time
(but shall be under no obligation to) pay or perform the same, and the amount or
cost thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee. To the extent that any such amounts or costs paid by
Mortgagee shall constitute payment of (i) Impositions; (ii) premiums on
insurance policies covering the Premises; (iii) expenses incurred in upholding
or enforcing the lien of this Mortgage, including, but not limited to the
expenses of any litigation to prosecute or defend the rights and lien created by
this Mortgage; (iv) costs of removal of or otherwise related to Hazardous
Materials (as defined below) or asbestos; or (v) any amount, costs or charge to
which Mortgagee becomes subrogated, upon payment, whether under recognized
principles of law or equity, or under express statutory authority; then, and in
each such event, such amounts or costs, together with interest thereon at the
Default Rate, shall be added to the Indebtedness and shall be secured by this
Mortgage and shall be a lien on the Mortgaged Property prior to any right, title
to, interest in, or claim upon the Mortgaged Property attaching subsequent to
the lien of this Mortgage. if. any payment required to be made by Mortgagor
under this Mortgage shall not be paid by Mortgagor within fifteen (15) days
after the date upon which it is due, then in addition to any interest thereon at
the Default Rate as may be provided for herein, Mortgagor shall pay to Mortgagee
upon demand an amount equal to two percent (2%) of such unpaid payment to defray
expenses incurred by Mortgagee in handling and processing such delinquent
payment, which amount shall be added to the Indebtedness and shall be secured by
this Mortgage and shall be a lien on the Mortgaged Property prior to any right,
title to, interest in, or claim upon the Mortgaged Property attaching subsequent
to the lien of this Mortgage. No payment or advance of money by Mortgagee under
this Section shall be deemed or construed to cure Mortgagor's default or waive
any right or remedy of Mortgagee.

15. Mortgagor's Existence, etc. Mortgagor shall 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 in which it was formed and its right to
own property and transact business in each state in which the Real Estate is
located. Mortgagor represents and warrants that Mortgagor is' a duly organized
and validly, existing corporation or general or limited partnership, as the case
may be, in good standing, and this Mortgage has been executed by a duly
authorized partner or officer thereof, as applicable. This Mortgage constitutes
the legal, valid and binding obligation of Mortgagor, enforceable against
Mortgagor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.

16. Financial Statements; Certificates; Other Information. (a) Mortgagor shall
deliver to Mortgagee (i) all financial statements, certificates and other
information required to be delivered under the Restated Credit Agreement, and
(ii) within 120 days after the end of each of its fiscal years a rent roll for
the Premises, certified by a Responsible Officer.

         (b) Mortgagor shall furnish to Mortgagee:

                  (i) concurrently with the delivery of the financial statements
referred to in subsection (a) a certificate of a Responsible Officer stating
that, to the best of such person's knowledge, after such examination or
investigation as is necessary to enable such person to make an informed
judgment, Mortgagor during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in this
Mortgage and all other documents evidencing, securing or relating to the
Indebtedness to be observed, performed or satisfied by it, and that such person
has obtained no knowledge of any Event of Default or any event which with the
giving of notice or passage of time, or both, would constitute an Event of
Default ("Default"), except as specified in such certificate; and

                  (ii) promptly, such additional financial and other information
as mortgagee may from time to time reasonably request.

                                       16

<Page>

17. Notice of Certain Occurrences. Mortgagor shall give notice to Mortgagee
promptly upon the occurrence of:

         (a) any litigation or proceeding affecting the Mortgaged Property or
any part thereof or interest therein in which the amount involved is $50,000 or
more and not fully covered by insurance or in which injunctive or similar relief
is sought; and

         (b) a material adverse change in the operations or condition of the
Mortgaged Property or any part thereof.

18. Hazardous Material. (a) For the purposes of this Mortgage, 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 now or
hereafter defined or regulated as a hazardous waste, hazardous substance,
pollutant or contaminant under any Environmental Requirement, or which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous or which is or contains petroleum, gasoline,
diesel fuel, another petroleum hydrocarbon product, asbestos,
asbestos-containing materials or polychlorinated biphenyls and (ii) the
"Environmental Requirements" shall collectively mean all present and future
laws, statutes, common law, ordinances, rules, regulations, orders, codes,
licenses, permits, decrees, judgments, directives or the equivalent of or by any
Governmental Authority and relating to or addressing the protection of the
environment or human health.

         (b) Mortgagor hereby represents and warrants to Mortgagee that to the
best of Mortgagor's knowledge after diligent inquiry (i) no Hazardous Material
is currently located at, on, in, under or about the Mortgaged Property, except
as specifically set forth in that certain Phase I Environmental Assessment dated
August 15, 1997 made by Lexicon Environmental Associates, Inc., (ii) no
Hazardous Material is currently located at, in, on, under or about the Mortgaged
Property in manner which violates any Environmental Requirement, or which
requires cleanup or corrective action of any kind under any Environmental
Requirement, (iii) no releasing, emitting, discharging, leaching, dumping,
disposing or transporting of any Hazardous Material from the Mortgaged Property
onto any other property or from any other property onto or into the Mortgaged
Property has occurred or is occurring in violation of any Environmental
Requirement, (iv) no notice of violation, non-compliance, liability or potential
liability, lien, complaint, suit, order or other notice with respect to the
Mortgaged Property is presently outstanding under any Environmental Requirement,
nor does mortgagor have knowledge or reason to believe that any such notice will
be received or is being threatened, and (v) the Mortgaged Property and the
operation thereof are in full compliance with all Environmental Requirements.

                                       17

<Page>


         (c) Mortgagor shall comply, and shall cause all tenants or other
occupants of the Mortgaged Property to comply, in all respects with all
Environmental Requirements, and will not generate, store, handle, process,
dispose of or otherwise use, and will not permit any tenant or other occupant of
the Mortgaged Property to generate, store, handle, process, dispose of or
otherwise use, Hazardous Materials at, in, on, or about the Mortgaged Property
in a manner that could lead or potentially lead to the imposition on Mortgagor,
Mortgagee or the Mortgaged Property of any liability or lien of any nature
whatsoever under any Environmental Requirement. Mortgagor shall notify Mortgagee
promptly in the event of any spill or other release of any Hazardous Material
at, in, on, under or about the Mortgaged Property which is required to be
reported to a Governmental Authority under any Environmental Requirement, will
promptly forward to Mortgagee copies of any notices received by Mortgagor
relating to alleged violations of any Environmental Requirement or any potential
liability under any Environmental Requirement and will promptly pay when due any
fine or assessment against Mortgagee, Mortgagor or the Mortgaged Property
relating to any Environmental Requirement. If at any time it is it is determined
that the operation or use of the Mortgaged Property in violation of any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Mortgaged Property violates any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Mortgaged Property which, under any
Environmental Requirement, require special handling in collection, storage,
treatment or disposal, or any form of cleanup or corrective action, Mortgagor
shall, within thirty (30) days after receipt of notice thereof from any
Governmental Authority or from Mortgagee, take, at Mortgagor's 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, mortgagor
shall commence such necessary action within such thirty (30) day period and
shall thereafter diligently and expeditiously proceed to fully comply in all
respects and in a timely fashion with all Environmental Requirements.

         (d) If Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action described
in clause (c) above, Mortgagee may, in its sole and absolute discretion, make
advances or payments toward the performance or satisfaction of the same, but
shall in no event be under any obligation to do so. All sums so advanced or paid
by. Mortgagee (including, without limitation, counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, and fines or other
penalty payments) and all 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 Mortgagor and shall bear
interest at the Default Rate from the date any such sums are so advanced or paid
by Mortgagee until the date any such sums are repaid by Mortgagor to Mortgagee.
Mortgagor will execute and deliver, promptly upon request, such instruments as
Mortgagee may deem useful or necessary to permit Mortgagee to take any such
action, and such additional notes and mortgages, as Mortgagee may require to
secure all sums so advanced or paid by Mortgagee. If a lien is filed against the
Mortgaged Property 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 Mortgagor or for which 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 Mortgaged Property is
located, then Mortgagor will, within thirty (30) days from the date that
Mortgagor is first given notice that such lien has been placed against the
Mortgaged Property (or within such shorter period of time as may be specified by
Mortgagee if such Governmental Authority has commenced steps to cause the
Mortgaged Property 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 Mortgagee and is
sufficient to effect a complete discharge of such lien on the Mortgaged
Property.

                                       18

<Page>

         (e) Mortgagee may, at its option, at intervals of not less than one
year, or more frequently if Mortgagee reasonably believes that a Hazardous
Material or other environmental condition violates or threatens to violate any
Environmental Requirement, cause an environmental audit of the Mortgaged
Property or portions thereof to be conducted to confirm Mortgagor's compliance
with the provisions of this paragraph, and Mortgagor shall cooperate in all
reasonable ways with Mortgagee connection with any such audit. If such audit
discloses that a violation of or a liability under an Environmental Requirement
exists or if such audit was required or prescribed by law, regulation or
governmental or quasi-governmental authority, Mortgagor shall pay all costs and
expenses incurred in connection with such audit; otherwise, the costs and
expenses of such audit shall, notwithstanding anything to the contrary set forth
in this paragraph, be paid by Mortgagee.

         (f) If this mortgage is foreclosed, or if the Mortgaged Property is
sold pursuant to the provisions of this Mortgage, or if Mortgagor tenders a deed
or assignment in lieu of foreclosure or sale, Mortgagor shall deliver the
Mortgaged Property to the purchaser at foreclosure or sale or to Mortgagee, its
nominee, or wholly-owned subsidiary, as the case may be, in a condition that
complies in all respects with all Environmental Requirements.

         (g) Mortgagor will defend, indemnify, and hold harmless Mortgagee, the
Tranche C Lender, and all participants, employees, agents, officers, and
directors of Mortgagee and the Tranche C Lender 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 Mortgagor of any of the provisions of this Section
18, (ii) the presence, disposal, spillage, discharge, emission, leakage,
release, or threatened release of any Hazardous Material which is at, in, on,
under, about, from or affecting the Mortgaged Property, including, without
limitation, any damage or injury resulting from any such Hazardous Material to
or affecting the Mortgaged Property or the soil, water, air, vegetation,
buildings, personal property, persons or animals located on the Mortgaged
Property 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 Mortgagee hereunder.
The aforesaid indemnification shall, notwithstanding any exculpatory or other
provision of any other document or instrument now or hereafter executed and
delivered in connection with the Tranche C Loan evidenced by the Tranche C Note
and secured by this Mortgage, constitute the personal recourse undertakings,
obligations and liabilities of Mortgagor.

                                       19

<Page>

         (h) The obligations and liabilities of Mortgagor under this Section 18
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 the Obligations fully performed, and
irrespective of any foreclosure of this Mortgage, sale of the Mortgaged Property
pursuant to the provisions of this Mortgage or acceptance by Mortgagee, its
nominee or affiliate of a deed or assignment in lieu of foreclosure or sale and
irrespective of any other fact or circumstance of any nature whatsoever.

19. Asbestos. Mortgagor shall not install or permit to be installed in the
Premises friable asbestos or any substance containing asbestos and deemed
hazardous by any Legal Requirement respecting such material, or any other
building material deemed to be harmful, hazardous or injurious by relevant Legal
Requirements and with respect to any such material currently present in the
Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall be a recourse obligation
of Mortgagor and shall survive repayment of the Note, notwithstanding any
limitation on recourse which may be contained herein or in any of the Loan
Documents or the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.

20. Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default:

         (a) an Event of Default shall occur under the Restated Credit
Agreement;

         (b) a failure to make payment of any sums required to be paid hereunder
(including, without limitation, any Imposition) within the period required by
specific provision of this Mortgage or, if no such period is so provided, by no
later than three clays after written notice; or

         (c) a failure (i) to keep in force the insurance required by this
Mortgage, or (ii) to comply with and conform to all provisions and requirements
of the insurance policies and the insurers thereunder which would affect
Mortgagor's ability to keep in force the insurance required by this Mortgage or
to collect any proceeds therefrom, or (iii) to comply with any other material
provisions of this Mortgage regarding insurance; or if on application of
Mortgagee two or more insurance companies lawfully doing business in the State
of New York refuse to issue policies of any of the insurance required by this
Mortgage; or

                                       20

<Page>

         (d) upon the actual waste, removal or demolition of, or material
alteration to, any part of the Premises (other than necessary replacements of
worn or obsolete Equipment) , construction of any new Improvements or if the
Mortgaged Property is not kept in good condition and repair; or

         (e) upon failure to comply promptly (except in accordance with the
express provisions of Section 3(c) of this Mortgage) with any Legal Requirement
or order or notice of violation of law or ordinance issued by any Governmental
Authority having jurisdiction over the Premises, which failure could materially
adversely affect the Mortgaged Property; or

         (f) if any representation or warranty made by Mortgagor in this
Mortgage or in any certificate, document or financial or other statement
furnished under or in connection with this Mortgage shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or

         (g) if any of the Mortgaged Property is damaged or destroyed by an
uninsured casualty and Mortgagor does not immediately provide funds for the
restoration of the damage caused by such casualty; or

         (h) if Mortgagor shall further mortgage, pledge or otherwise encumber
the Mortgaged Property or any part thereof or any interest therein or create or
suffer to exist any lien, charge or other encumbrance on the Mortgaged Property
or any part thereof, whether superior or subordinate to the lien of this
Mortgage, whether recourse or non-recourse; or

         (i) if (i) Mortgagor shall (A) sell, transfer, convey or assign the
Mortgaged Property or any part thereof or any interest therein (by operation of
law or otherwise) , or (B) lease any of the Mortgaged Property without the prior
written consent of Mortgagee; or (ii) if the ultimate beneficial ownership of
Mortgagor shall change or be altered by sale, assignment, transfer, pledge
foreclosure or otherwise, from the ultimate beneficial ownership on the date
hereof; or

         (j) if Mortgagor shall (i) fail to occupy substantially all of the
Mortgaged Property, or (ii) suspend operation of the business conducted by
Mortgagor as of the date hereof (whether at the Mortgaged Property or
otherwise); or

         (k) this Mortgage or any of the other Security Documents shall cease
for any reason to be in full force and effect or Mortgagor shall' so assert in
writing; or

         (l) if Mortgagee shall permit any additional lien or mortgage to
encumber the Mortgaged Property (whether superior or subordinate, recourse or
non-recourse) , any default shall occur in connection with such lien or
mortgage; or

         (m) a failure of Mortgagor to duly perform and observe, or a violation
or breach of, any other terms, covenants, provisions or conditions of this
Mortgage and the continuation thereof for a 30-day period after notice shall
have been given to Mortgagor by Mortgagee specifying such default and requiring
such default be remedied; which period may be extended to the extent required
(but not longer than 180 days) if such default is not susceptible of cure within
30 days so long as Mortgagor has commenced to cure such default within such
30-day period and is thereafter diligently prosecuting such cure to completion
and so long as such delay is not likely to have a material adverse effect on
either the Mortgaged Property or Mortgagee's rights under this Mortgage;
provided, however, any such default that can be cured by the payment of money
shall be promptly cured after notice by Mortgagee.

                                       21

<Page>

21. Remedies.

         (a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Loan Documents, or
as provided by law, and without limitation, (a) if such event is an Event of
Default specified in clause (i) or (ii) of Section 7(f) of the Restated Credit
Agreement, automatically the Indebtedness and all other amounts owing under the
Note, this Mortgage and the other Security Documents immediately shall become
due and payable, and (b) if such event is any other Event of Default, with the
consent of the Required Lender Mortgagee may, or upon the request of the
Required Lender Mortgagee shall, by notice to Mortgagor, declare the
Indebtedness (together with accrued interest thereon) and all other amounts
payable under the Note, this Mortgage and the other Security Documents to be
immediately due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. In addition, upon the occurrence of any Event of Default,
Mortgagee may immediately take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against Mortgagor and in and
to the Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
manner as Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee:

                  (i) Mortgagee may, to the extent permitted by applicable law,
         (A) institute and maintain an action of mortgage foreclosure against
         all or any part of the Mortgaged Property, (B) institute and maintain
         an action on the Note, (C) sell all or part of the Mortgaged Property
         (Mortgagor expressly granting to Mortgagee the power of sale), or (D)
         take such other action at law or in equity for the enforcement of this
         Mortgage or any of the Loan Documents as the law may allow. Mortgagee
         may proceed in any such action to final judgment and execution thereon
         for all sums due hereunder, together with interest thereon at the
         Default Rate and all costs of suit, including, without limitation,
         reasonable attorneys, fees and disbursements. Interest at the Default
         Rate shall be due on any judgment obtained by Mortgagee from the date
         of judgment until actual payment is made of the full amount of the
         judgment.

                  (ii) Mortgagee may personally, or by its agents, attorneys and
         employees and without regard to the adequacy or inadequacy of the
         Mortgaged Property or any other collateral as security for the
         Indebtedness and Obligations enter into and upon the Mortgaged Property
         and each and every part thereof and exclude Mortgagor and its agents
         and employees therefrom without liability for trespass, damage or
         otherwise (Mortgagor hereby agreeing to surrender possession of the
         Mortgaged Property to Mortgagee upon demand at any such time) and use,
         operate, manage, maintain and control the Mortgaged Property and every
         part thereof. Following such entry and taking of possession, Mortgagee
         shall be entitled, without limitation, (x) to lease all or any part or
         parts of the Mortgaged Property for such periods of time and upon such
         conditions as Mortgagee may, in its discretion, deem proper, (y) to
         enforce, cancel or modify any Lease and (i) generally to execute, do
         and perform any other act, deed, matter or thing concerning the
         Mortgaged Property as Mortgagee shall deem appropriate as fully as
         Mortgagor might do.

                                       22

<Page>

         (b) The holder of this Mortgage, in any action to foreclose it, shall
be entitled to the appointment of a receiver. In case of a foreclosure sale, the
Real Estate may be sold, at Mortgagee's election, in one parcel or in more than
one parcel and Mortgagee is specifically empowered, (without being required to
do so, and in its sole and absolute discretion) to cause successive sales of
portions of the Mortgaged Property to be held.

         (c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.

22. Right of Mortgagee to Credit Sale. Upon the occurrence of any sale made
under this Mortgage, whether made under the power of sale or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Note and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.

23. Appointment of Receiver. If an Event of Default shall have occurred and be
continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral as security for
the Indebtedness and Obligations or the interest of Mortgagor therein, shall
have the right to apply to any court having jurisdiction to appoint a receiver
or receivers or other manager of the Mortgaged Property, and Mortgagor hereby
irrevocably consents to such appointment and waives notice of any application
therefor (except as may be required by law) . Any such receiver or receivers
shall have all the usual powers and duties of receivers in like or similar cases
and all the powers and duties of Mortgagee in case of entry as provided in this
Mortgage, including, without limitation and to the extent permitted by law, the
right to enter into leases of all or any part of the Mortgaged Property, and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.

24. Extension, Release, etc. (a) Without affecting the lien or charge of this
Mortgage upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Indebtedness, Mortgagee may,
from time to time and without notice, agree to (i) release any person liable for
the Indebtedness, (ii) extend the maturity or alter any of the terms of the
Indebtedness or any guaranty thereof, (iii) grant other indulgences, (iv)
release or reconvey, or cause to be released or reconveyed at any time at
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (v)
take or release any other or additional security for any obligation herein
mentioned, or (vi) make compositions or other arrangements with debtors in
relation thereto. If at any time this Mortgage shall secure less than all of the
principal amount of the ' Indebtedness, it is expressly agreed that any
repayments of the principal amount of the Indebtedness shall not reduce the
amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.

                                       23

<Page>

         (b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.

         (c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.

         (d) Unless expressly provided otherwise, in the event that ownership of
this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.

25. Security Agreement under Uniform Commercial Code. (a) It is the intention of
the parties hereto that this Mortgage shall constitute a Security Agreement
within the meaning of the Uniform Commercial Code (the "Code") of the State of
New York. If an Event of Default shall occur under this Mortgage, then in
addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Mortgaged Property which is
personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days, notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.

         (b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.

                                       24

<Page>

         (c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form satisfactory to Mortgagee, covering all or any part of the
Mortgaged Property and will further execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as Mortgagee may request
in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Mortgage and such security instrument.
Mortgagor further agrees to pay to Mortgagee on demand all costs and expenses
incurred by Mortgagee in connection with the preparation, execution, recording,
filing and re-filing of any such document and all reasonable costs and expenses
of any record searches for financing statements Mortgagee shall reasonably
require. Mortgagor shall from time to time, on request of Mortgagee, deliver to
Mortgagee an inventory in reasonable detail of any of the Mortgaged Property
which constitutes personal property. If Mortgagor shall fail to furnish any
financing or continuation statement within 10 days after request by Mortgagee,
then pursuant to the provisions of the Code, Mortgagor hereby authorizes
Mortgagee, without the signature of Mortgagor, to execute and file any such
financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above.

26. Assignment of Rents. Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment of the Indebtedness and performance of the
obligations, and Mortgagor grants to Mortgagee the right to enter the Mortgaged
Property for the purpose of collecting the same and to let the Mortgaged
Property or any part thereof, and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any) . The agreement
contained in this Section has been made with reference to section 291-f of the
Real Property Law of the State of New York.

27. Trust Funds. (a) Mortgagor shall receive the advances secured hereby subject
to the trust fund provisions of Section 13 of the Lien Law of the State of New
York.

                                       25

<Page>

         (b) All lease security deposits of the Real Estate shall be treated as
trust funds not to be commingled with any other funds of Mortgagor. Within 10
days after request by Mortgagee, Mortgagor shall furnish Mortgagee satisfactory
evidence of compliance with this subsection, together with a statement of all
lease security deposits by lessees and copies of all Leases not previously
delivered to Mortgagee, which statement shall be certified by Mortgagor.

28. Additional Rights. (a) The clauses and covenants contained in this Mortgage
that are construed by Section 254 of the Real Property Law of the State of New
York shall be construed as provided in those sections, except that the
provisions of subsection 4 of such Section 254 shall not in any manner apply to
or construe the provisions of this Mortgage; the additional clauses and
covenants contained herein shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by such Section
254 and shall not impair, modify, alter or defeat such rights (except that the
provisions of this Mortgage governing insurance shall be exclusive of and shall
be in substitution for the rights which would be conferred by the clauses and
covenants construed by such subsection 4 of such Section 254), notwithstanding
that such additional clauses and covenants may relate to the same subject matter
or provide for different or additional rights in the same or similar
contingencies as the clauses and covenants construed by such Section 254; the
rights of Mortgagee arising under clauses and covenants contained in this
Mortgage shall be separate, distinct and cumulative and none of them shall be in
exclusion of the others; no act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding, and in
the event of any inconsistencies between the provisions of such Section 254 and
the provisions of this Mortgage, the provisions of this Mortgage shall prevail.

         (b) The holder of any subordinate lien on the Mortgaged Property shall
have no right to terminate any Lease whether or not such Lease is subordinate to
this Mortgage nor shall any holder of any subordinate lien join any tenant under
any Lease in any action to foreclose the lien or modify, interfere with, disturb
or terminate the rights of any tenant under any Lease. By recordation of this
Mortgage all subordinate lienholders are subject to and notified of this
provision, and any action taken by any such lienholder contrary to this
provision shall be null and void. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness.
Any such application shall not be construed to cure or waive any Default or
Event of Default or invalidate any act taken by Mortgagee on account of such
Default or Event of Default.

29. Changes in Method of Taxation. In the event of the passage after the date
hereof of any law of any Governmental Authority deducting from the value of the
Premises for the purposes of taxation any lien thereon, or changing in any way
the laws for the taxation of mortgages or debts secured thereby for federal,
state or local purposes, or the manner of collection of any such taxes, and
imposing a tax, either directly or indirectly, on mortgages or debts secured
thereby, the holder of this Mortgage shall have the right to declare the
Indebtedness due on a date to be specified by not less than 30 days' written
notice to be given to Mortgagor unless within such 30-day period Mortgagor shall
assume as an Obligation hereunder the payment of any tax so imposed until full
payment of the Indebtedness and such assumption shall be permitted by law.

                                       26

<Page>

30. Notices. All notices, requests, demands and other communications hereunder
shall be given in the manner and to the addresses determined under subsection
10.2 of the Restated Credit Agreement. If any party other than Mortgagor shall
be entitled to receive copies of notices, demands or approvals, failure of
Mortgagee to send such copies shall not impair the effectiveness of any notice
sent to Mortgagor.

31. No Oral Modification. This Mortgage may not be changed or terminated orally.
Any agreement made by Mortgagor and Mortgagee after the date of this Mortgage
relating to this Mortgage shall be superior. to the rights of the holder of 'any
intervening or subordinate lien or encumbrance.

32. Partial Invalidity. In the event any one or more of the provisions contained
in this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of the Indebtedness or Loan Documents, the obligations of Mortgagor
and of any other obligor under the Indebtedness or Loan Documents shall be
subject to the limitation that Mortgagee shall not charge, take or receive, nor
shall Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the' maximum rate permitted by law to
be charged by Mortgagee.

33. Mortgagor's Waiver of Rights. To the fullest extent permitted by law,
Mortgagor waives the benefit of all laws now existing or that may subsequently
be enacted providing for (i) any appraisement before sale of any portion of the
Mortgaged Property, (ii) any extension of the time for the enforcement of the
collection of the Indebtedness or the creation or extension of a period of
redemption from any sale made in collecting such debt and (iii) exemption of the
Mortgaged Property from attachment, levy or sale under execution or exemption
from civil process. To the full extent Mortgagor may do so, Mortgagor agrees
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Mortgage before exercising any other remedy granted
hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for
any and all persons ever claiming any interest in the Mortgaged Property, to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of foreclosure of the liens hereby created.

34. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment of
the Indebtedness and performance of the Obligations and to exercise all rights
and powers under this Mortgage or under any of the other Loan Documents or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Indebtedness and obligations may now or hereafter be otherwise secured,
whether by mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, shall prejudice or
in any manner affect Mortgagee's right to realize upon or enforce any other
security now or hereafter held by Mortgagee, it being agreed that Mortgagee
shall be entitled to enforce this Mortgage and any other security now or
hereafter held by Mortgagee in such order and manner as Mortgagee may determine
in its absolute discretion. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each 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. Every power or remedy given by any of the Loan Documents
to Mortgagee or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee. In no event shall Mortgagee, in the exercise of the
remedies provided, in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the Mortgaged
Property), be deemed a "mortgagee in possession," and Mortgagee shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.

                                       27

<Page>

35. Multiple Security. If (a) the Premises shall consist of one or more parcels,
whether or not contiguous and whether or not located in the same county, or (b)
in addition to this Mortgage, Mortgagee shall now or hereafter hold one or more
additional mortgages, liens, deeds of trust or other security (directly or
indirectly) for the Indebtedness upon other property in the State in which the
Premises are located (whether or not such property is owned by Mortgagor or by
others) or (c) both the circumstances described in clauses (a) and (b) shall be
true, then to the fullest extent permitted by law, Mortgagee may, at its
election, commence or consolidate in a single foreclosure action all foreclosure
proceedings against all such collateral securing the Indebtedness (including the
Mortgaged Property), which action may be brought or consolidated in the courts
of any county in which any of such collateral is located. Mortgagor acknowledges
that the right to maintain a consolidated foreclosure action is a specific
inducement to Mortgagee to extend the Indebtedness, and Mortgagor expressly and
irrevocably waives any objections to the commencement or consolidation of the
foreclosure proceedings in a single action and any objections to the laying of
venue or based on the grounds of forum non conveniens which it may now or
hereafter have. Mortgagor further agrees that if Mortgagee shall be prosecuting
one or more foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Indebtedness, or if Mortgagee
shall have obtained a judgment of foreclosure and sale or similar judgment
against such collateral, then, whether or not such proceedings are being
maintained or judgments were obtained in or outside the State in which the
Premises are located, Mortgagee may commence or continue foreclosure proceedings
and exercise its other remedies granted in this Mortgage against all or any part
of the Mortgaged Property and Mortgagor waives any objections to the
commencement or continuation of a foreclosure of this Mortgage or exercise of
any other remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Mortgage or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to foreclose this
Mortgage nor the exercise of any other rights hereunder nor the recovery of any
judgment by Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral (either in or
outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly) in
the most economical and least time-consuming manner.

                                       28

<Page>

36. Expenses; Indemnification. (a) Mortgagor shall pay or reimburse Mortgagee
for all expenses incurred by Mortgagee before and after the date of this
Mortgage with respect to any and all transactions contemplated by this Mortgage
including without limitation, the preparation of any document reasonably
required hereunder or any amendment, modification, restatement or supplement to
this Mortgage, the delivery of any consent, nondisturbance agreement or similar
document in connection with this Mortgage or the enforcement of any of
Mortgagee's rights. Such expenses shall include, without limitation, all title
and conveyancing charges, recording and filing fees and taxes, mortgage taxes,
intangible personal property taxes, escrow fees, revenue and tax stamp expenses,
insurance premiums (including title insurance premiums), title search and title
rundown charges, brokerage commissions, finders, fees, placement fees, court
costs, surveyors', photographers', appraisers', architects', engineers',
consulting professional's, accountants' and attorneys' fees and disbursements.
Mortgagor acknowledges that from time to time Mortgagor may receive statements
for such expenses, including without limitation attorneys' fees and
disbursements. Mortgagor shall pay such statements promptly upon receipt.

         (b) If (i) any action or proceeding shall be commenced by Mortgagee
(including but not limited to any action to foreclose this Mortgage or to
collect the Indebtedness), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Obligor), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action or
proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from a Guarantor of
the Indebtedness or of any of the Obligations or any of the transactions
contemplated by this Mortgage, then Mortgagor will immediately reimburse or pay
to Mortgagee all of the expenses which have been or may be incurred by Mortgagee
with respect to the foregoing (including reasonable counsel fees and
disbursements), together with interest thereon at the Default Rate, and
following the occurrence of a Default any such sum and the interest thereon
shall be a lien on the Mortgaged Property, prior to any right, or title to,
interest in or claim upon the Mortgaged Property attaching or accruing
subsequent to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage. In any action or proceeding to foreclose this Mortgage, or to
recover or collect the Indebtedness, the provisions of law respecting the
recovering of costs, disbursements and allowances shall prevail unaffected by
this covenant.

         (c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.

                                       29

<Page>

37. Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in its sole discretion it deems
such waiver advisable. All such covenants of Mortgagor shall run with the land
and bind Mortgagor, the successors and assigns of Mortgagor (and each of them)
and all subsequent owners, encumbrancers and tenants of the Mortgaged Property,
and shall inure to the benefit of Mortgagee, its successors and assigns. The
word "Mortgagor" shall be construed as if it read "Mortgagors" whenever the
sense of this mortgage so requires and if there shall be more than one
Mortgagor, the obligations of Mortgagors shall be joint and several.

38. No Waivers, etc. Any 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 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
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 Mortgaged Property, any
part of the security held for the obligations secured by this Mortgage without,
as to the remainder of the security, in any way impairing or affecting the lien
of this Mortgage or the priority of such lien over any subordinate lien.

39. Governing Law, etc. This Mortgage shall be governed by and construed and
interpreted in accordance with the laws of the State of New York. Mortgagor
hereby irrevocably agrees that any legal action, suit, or proceeding against it
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Mortgage or the other Loan Documents
or for recognition or enforcement of any judgment rendered in any such action,
suit or proceeding may be brought in the United States Courts for the Southern
District of New York, or in the courts of the State of New York, as Mortgagee
may elect, and, by execution and delivery of this Mortgage, Mortgagor hereby
irrevocably accepts and submits to the nonexclusive jurisdiction of each of the
aforesaid courts in persona, generally and unconditionally with respect to any
such action, suit or proceeding for itself and in respect of its property.
Mortgagor further agrees that final judgment against it in any action, suit, or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of its
indebtedness.

                                       30

<Page>


40. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby irrevocably and
unconditionally waive trial by jury in any action, claim, suit or proceeding
relating to this Mortgage and for any counterclaim brought therein. Mortgagor
hereby waives all rights to interpose any counterclaim in any suit brought by
Mortgagee hereunder and all rights to have any such suit consolidated with any
separate suit, action or proceeding.

41. Certain Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided herein, words used in this Mortgage
shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein, and the word
"Mortgagee" shall mean "Mortgagee or any successor administrative agent for the
holder (s) of the Tranche C Note".

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

43. Last Dollars Secured; Priority. This Mortgage secures only a portion of the
indebtedness owing or which may become owing by Mortgagor to the Lenders. The
parties agree that any payments or repayments of such indebtedness shall be and
be deemed to be applied first to the portion of the indebtedness that is not
secured hereby, it being the parties' intent that the portion of the
indebtedness last remaining unpaid shall be secured hereby.

44. MAXIMUM SECURED AMOUNT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, THE MAXIMUM AMOUNT OF PRINCIAPL INDEBTEDNESS SECURED BY THIS MORTGAGE AT
THE TIME OF EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY HEREAFTER BECOME
SECURED HEREBY AT ANY TIME IS SEVEN HUNDRED FIVE THOUSAND DOLLARS ($705,000);
PROVIDED, THAT SUCH LIMITATION SHALL NOT LIMIT THE SECURITY OF THIS MORTGAGE
WITH RESPECT TO (I) INTEREST ON THE AFORESAID MAXIMUM AMOUNT OF PRINCIPAL
INDEBTEDNESS AT THE RATE APPLICABLE TO THE TRANCHE TERM LOANS AS PROVIDED IN THE
CREDIT AGREEMENT, (II) AFTER A DEFAULT BY MORTGAGOR TO PAY OR PERFORM SAME, SUMS
TO PAY IMPOSITIONS AS PROVIDED FOR HEREIN, (III) AFTER A DEFAULT BY MORTGAGOR TO
PAY OR PERFORM SAME, SUMS TO PAY PREMIUMS ON INSURANCE POLICIES COVERING THE
MORTGAGED PROPERTY AS PROVIDED FOR HEREIN, (IV) EXPENSES INCURRED IN UPHOLDING
OR ENFORCING THE LIEN OF THIS MORTGAGE, INCLUDING, BUT NOT LIMITED TO, THE
EXPENSES OF ANY LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS AND LIEN CREATED BY
THIS MORTGAGE, (V) AFTER DEFAULT BY MORTGAGOR TO PAY OR PERFORM SAME, EXPENSES
INCURRED TO PROTECT THE PROPERTY SECURED BY THIS MORTGAGE, (VI) ANY AMOUNT,
COSTS OR CHARGE TO WHICH THIS MORTGAGE BECOMES SUBROGATED, UPON PAYMENT, WHETHER
UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY, OR UNDER EXPRESS STATUTORY
AUTHORITY AND (VII) ANY OTHER AMOUNT SECURED BY THIS MORTGAGE WHICH IF NOT
LIMITED BY SUCH LIMITATION WOULD NOT RENDER THIS MORTGAGE INDEFINITE OR INCREASE
THE AMOUNT OF MORTGAGE RECORDING TAXES, IF ANY, PAYABLE WITH RESPECT TO THIS
MORTGAGE

                                       31

<Page>

45. Mortgagor will pay all applicable mortgage recording tax imposed pursuant to
Article 11 of the New York Tax Law incurred in connection with the recordation
of this Mortgage.

         This Mortgage has been duly executed by Mortgagor on the date first
above written.

                                KOLAR, INC.


                                By:   /s/ Edward J. Fred
                                      Name:  Edward J. Fred
                                      Title: President

STATE OF NEW YORK )
                  :ss:
COUNTY OF NEW YORK)

On the 25th day of June in the year 2000 before me, the undersigned, personally
appeared Edward J. Fred, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.


/s/
Signature and Office of individual
taking acknowledgment


                                       32

<Page>


                             SCHEDULE A DESCRIPTION

Parcel A

I:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point at the intersection of the east line of Cliff Street and
the north line of former Cascadilla Street (unopened), running thence North
05(Degree) 30' East along the east line of Cliff Street a distance of 450 feet
to a nail set; running thence South 87(Degree) 51' East a distance of 118.7 feet
to a point; running thence South 01(Degree) 49' West for a distance of 159.8
feet to a point; running thence South 01(Degree) 37' West for a distance of 307
feet to a point; running thence North 81(Degree) 09' West a distance of 149.8
feet to the point and place of beginning.

II:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point in the North line of former Cascadilla Street (unopened
street), said point being located South 81(Degree) 09'East for a distance of
149.8 feet from the intersection of said streetline with the east line of Cliff
Street; running thence South 81(Degree)09' East for a distance of 50 feet to an
iron pipe set; running thence North 01(Degree) 39'East for a distance of 473.83
feet to an iron pipe found; running thence North 89(Degree) 17' West passing
through an iron stake at 38 feet and continuing for a total distance of 49.3
feet to a point; running thence South 01(Degree) 49' West for a distance of
159.8 feet to a point; running thence South 01(Degree) 37' West for a distance
of 307 feet to the point and place of beginning.

III:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at an iron pipe found in the west line of Cliff Street, said point
being the southeast corner of Tax Map Number 42-1-9, being lands reputedly of
Rea; running thence North 80(Degree) 58' West passing through an iron pipe at a
distance of 7.2 feet, and continuing for a total distance of 60 feet to a point;
running thence South 07(Degree) 14'West passing through an iron pipe found at a
distance of 86 feet and continuing for a total distance of 146 feet to a point
in the centerline of an existing ravine; running thence Easterly along the
centerline of said ravine for a distance of 70 feet to a point in the west line
of Cliff Street, said course having a chord bearing and distance of South
69(Degree) 07'East - 66.5 feet; running thence North 5(Degree) 30'East for a
distance of 154 feet to the point and place of beginning.

                                       33

<Page>


PARCEL B
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:

                  BEGINNING at a nail set in the at line of Cliff Street, said
nail being located North 05(Degree) 30' East a distance of 450 feet from the
intersection of Cliff Street with the North line of former Cascadilla Street
(unopened); running thence North 05(Degree) 30' East along the east line of
Cliff Street for a distance of 47.5 feet to an iron pin set; running thence
North 00(Degree) 49' West along the east line of Cliff Street for a distance of
241.9 feet to an iron pin set; running thence North 89(Degree) 11' East for a
distance of 130.0 feet to an iron pin set; running thence South 00(Degree) 49'
East for a distance of 248.4 feet to an iron pin set; running thence South
05(Degree) 30' West for a distance of 47.5 feet to an iron pipe found; running
thence North 89(Degree) 17' West for a distance of 11.3 feet to a point; running
thence North 87(Degree) 51' West for a distance of 118.70 feet to the point and
place of beginning.

                                       34

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.50
<SEQUENCE>10
<FILENAME>cpi8k-6252002_1050.txt
<DESCRIPTION>SECURITY AGREEMENT AMENDMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.50



                            CPI Aerostructures, Inc.

                       Seller Security Agreement Amendment

         AMENDMENT dated as of June 25, 2002 to Security Agreement (the
"Guaranty") dated October 9, 1997, made by CPI AEROSTRUCTURES, INC. ("CPI")
KOLAR, INC., ("Buyer"), and RALOK, INC. (formerly Kolar Machine, Inc.), a New
York corporation ( "Seller"),

                                    RECITALS

A. The parties previously executed a Security Agreement ("Original Security
Agreement") in connection with an Asset Purchase Agreement by and among CPI,
Buyer, Principal and Daniel Liguori.

B. Pursuant to the Asset Purchase Agreement, Buyer issued an 8% convertible
subordinated promissory note (the "Note"), the payment of which was guaranteed
by the Guarantor pursuant to the Guaranty.

C. Pursuant to the Original Security Agreement the Buyer granted to Seller a
security interest ("Security Interest") in certain collateral (defined as
"Assets" in the Original Security Agreement) to secure the payment to principal
of all obligations of the Buyer to the Seller under the Asset Purchase Agreement
(the "Obligations").

D. The Security Interest is expressly subordinate to certain other indebtedness
of the Buyer pursuant to a certain Credit Agreement (the "Original Credit
Agreement") among the Buyer, CPI Aerostructures, Inc. JPMorgan Chase Bank
(formerly The Chase Manhattan Bank) as Administrative Agent and the Senior
Lenders described therein

E. The aforesaid Original Credit Agreement has been amended and restated as of
the date hereof (the "Amended and Restated Credit Agreement"), such that, among
other matters, the obligation of the Buyer has been extended to certain
additional indebtedness of the Buyer in the amount of $704,484.41 which is
described as the "Tranche C Loan" under an Amended and Restated Credit Agreement
of even date herewith among the Guarantor and Kolar, Inc. as co-borrowers,
JPMorgan Chase Bank as Administrative Agent and the Senior Lenders described
therein; and for avoidance of doubt the parties wish to confirm and agree that
the obligations of the Buyer under the Original Security Agreement are
subordinated to the obligation of the Buyer to repay the Tranche C Loan.

         NOW, THEREFORE, in consideration of the foregoing and the terms,
conditions, and mutual covenants appearing in this Amendment, the Buyer and the
Seller hereby agree as follows:

<Page>

1. Confirmation and Extension of Subordination Provisions The last paragraph of
Section 2 of the Security Agreement is hereby amended to read in its entirety as
follows:

         "The parties hereto acknowledge that the security interest granted
         hereby to the Seller shall be subordinate to the senior security
         interest of JPMorgan Chase Bank (formerly The Chase Manhattan Bank) in
         the collateral to the extent of the aggregate amount of the Tranche A,
         Tranche B and Tranche C Loans, as such terms are defined in the Amended
         and Restated Credit Agreement, to the extent of the aggregate
         outstanding balances of such loans at any particular time (together
         with any accrued and unpaid interest thereon) and as the same may be
         assigned by the Lenders thereunder or refinanced by the Buyer, but only
         to the extent that such refinancing does not increase the principal
         that would be due under the Amended and Restated Credit Agreement
         outstanding as of the date hereof. The subordination is subject to the
         limitations contained in an Amendment to Intercreditor and
         Subordination Agreement dated of even date herewith."

2. Continuing Security CPI and Buyer hereby acknowledge, ratify and confirm
that, without limiting the terms of the Original Security Agreement, each and
every obligation under a Amended and Restated Note executed and delivered by
Buyer to Seller and dated as of even date herewith is secured by security
interests granted under the Original Security Agreement.

3. No Other Changes Except as amended hereby, the terms of the Original Security
Agreement shall continue in full force and effect.

4. Counterparts. This Agreement may be executed in counterparts and all so
executed shall constitute one Agreement, binding on all parties notwithstanding
that all parties are not signatories to the original or the same counterpart.



<Page>



         IN WITNESS WHEREOF, the parties have executed this Amendment to
Security Agreement as of the day and year first written above.

CPI AEROSTRUCTURES, INC.               KOLAR, Inc.

By:  /s/ Edward J. Fred                By: /s/ Edward J. Fred
     ------------------                    ------------------
Edward J. Fred, President              Edward J. Fred, Executive Vice President


RALOK, INC.


By: /s/








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.51
<SEQUENCE>11
<FILENAME>cpi8k-6252002_1051.txt
<DESCRIPTION>RESTATED SELLER NOTE (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.51



                                   KOLAR, INC.

                              AMENDED AND RESTATED

                   8% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$4,000,000                                                        JUNE 25, 2002

1. Kolar, Inc., a Delaware corporation (the "Maker"), for value received, and
without presentment or demand, hereby promises to pay to RALOK, INC. (formerly
Kolar Machine, Inc.), or registered assigns (the "Payee") on or before September
30, 2003 or such other date as shall be established pursuant to Section 16 of
this Note ("Maturity Date"), the principal sum of FOUR MILLION AND NO/100
DOLLARS ($4,000,000 - hereafter the "Principal Sum") by wire transfer of
immediately available United States funds.

2. Amendment and Restatement of Prior Note. This Note amends, restates and
supersedes, in its entirety, the 8% Convertible Subordinated Promissory Note
originally issued by the Maker to the Payee dated October 9, 1997, as the same
was amended by amendments dated February 15, 2001 and May 4, 2001, respectively
(collectively, the "Prior Note"). The Prior Note was issued pursuant an Asset
Purchase Agreement dated October 9, 1997, between Maker, Payee, CPI
Aerostructures, Inc. ("CPI") and Daniel Liguori ("Liguori"). The terms of the
Asset Purchase Agreement are incorporated herein by reference. Capitalized terms
used in this Note shall have the meanings ascribed to them in the Asset Purchase
Agreement unless otherwise defined herein.

3. Prior Interest Amount. Unpaid and accrued interest in respect of the Prior
Note is $898,035.00 as of June 30,2002 ("Prior Interest Amount").

4. Interest Payments. Interest on the Prior Interest Amount and on the Principal
Sum and on any interest not paid by the first day of each month following the
month in which this Note is executed shall be compounded monthly. Interest shall
not exceed the maximum amount permitted by law. Payments due pursuant to this
Section are hereafter collectively referred to as "Interest". Interest shall be
paid on the Maturity Date, or if all or a portion of this Note is prepaid
pursuant to Section 5 below, on the Prepayment Date, with respect to (a) the
Principal Amount, and (b) the Prior Interest Amount, in each case at the rate of
eight percent (8%) per annum, computed in each case from and after the date
hereof through the date on which such payment is made.

5. Prepayment. Maker may prepay this Note in full, or in part, by delivering at
least thirty-five (35) days' prior written notice of prepayment ("Prepayment
Notice") to Payee. If Maker delivers a Prepayment Notice, Payee may exercise its
right to purchase CPI Common Shares pursuant to Section 7 below by delivering to
Maker a notice in the form attached hereto (the "Conversion Notice") not later
than thirty (30) days after Maker's Prepayment Notice is delivered. If Payee
does not timely deliver a Conversion Notice, then Maker shall, on the
thirty-fifth (35th) day after delivery of the Prepayment Notice, pay the portion
of the Principal Sum of this Note specified in the Prepayment Notice together
with all accrued and unpaid Interest computed through the date prepayment is
made. Any sum paid by the Maker shall be applied as required under Section 6.


<Page>

6. Application of Payments. If, on any date a prepayment is made in respect of
this Note pursuant to Section 5 which is less than the aggregate of the
outstanding Prior Interest Amount, outstanding Principal Sum and all Interest
due on such date, then the entire such payment shall be applied, first to the
aggregate Interest due, second to the Prior Interest Amount, and third, to the
Principal Sum.

7. Right to Convert to CPI Shares.

         (i) Maker and CPI hereby grant to the Payee the right to purchase from
CPI up to 333,334 Common Shares of CPI, $.001 par value ("CPI Common Shares").
The conversion rate ("Conversion Rate") of $12.00 per share (an aggregate
purchase price of $4,000,000 for 333,334 CPI Common Shares), is subject to
adjustment, as described below in Section 9. For avoidance of doubt, the
Conversion Rate stated in the immediately preceding sentence reflects a one for
three reverse stock split that was effective on May 3, 1999. Payee may exercise
its right to purchase such CPI Common Shares during the term of this Note, in
whole or in part, but in not less than 33,000 share increments, by giving
written notice of exercise to Maker prior to the Maturity Date.

         (ii) The Conversion Notice shall specify the portion of the Principal
Sum to be converted. Payee need not deliver this Note to the Maker and the
purchase price for the CPI Common Shares delivered to Payee shall be paid by
application of a portion of the outstanding Principal Sum of this Note to the
purchase price, and Maker shall deliver to Payee a certificate representing the
number of CPI Common Shares purchased. Accrued, but unpaid interest due under
this Note, including Prior Interest, shall not be discharged upon any
conversion. As soon as practicable after the delivery of the Conversion Notice,
the Company shall deliver to the Payee, or on its written order, to a third
party (if an exemption for transfer to such person is then available), a
certificate or certificates for the number of full number of CPI Common Shares
issuable upon the conversion of this Note or portion thereof. Such conversion
shall be deemed to have been effected on the day the Conversion Notice is
received by the Maker (the "Conversion Date"). Subject to issuance and delivery
of the CPI Common Shares, the rights of the Payee as to the portion of the Note
converted shall cease, and the person or persons in whose name or names any
certificate for CPI Common Shares shall be issuable upon such Conversion shall
be deemed to have become the holder or holders of record of the Shares
represented thereby, all as of the Conversion Date.

         (iii) No fractional CPI Common Shares or scrip shall be issued upon
conversion of all or part of this Note. Any fractional share interests shall be
rounded up to a full CPI Common Share.

                                        2

<Page>

8. Reductions in Principal Sum Upon Conversion. The Principal Sum of this Note
shall be decreased, on a dollar for dollar basis, equal to the purchase price
for the common shares of CPI issued upon conversion or partial conversion of
this Note. Such reduction shall be effective as of the Conversion Date as
established pursuant to Section 7.

9. Adjustment of Conversion Rate. The Conversion Rate shall be subject to
adjustment from time to time as follows:

         (i) If the number of CPI Common Shares outstanding at any time after
the date hereof is increased by a stock dividend or other distribution of
securities to CPI's shareholders without consideration (other than a
distribution of rights to purchase securities for cash) payable in CPI Common
Shares or by a subdivision or split-up of CPI common shares, then, immediately
following the date of such stock dividend, distribution, subdivision or
split-up, the Conversion Rate shall be appropriately decreased so that the
number of CPI Common Shares issuable on conversion of this Note shall be
increased in direct proportion to such increase in outstanding shares.

         (ii) If the number of CPI Common Shares outstanding at any time after
the date hereof is decreased by a combination or a reverse stock split, then
immediately following the date of such combination or reverse stock split the
Conversion Rate shall be appropriately increased so that the number of CPI
Common Shares issuable on the Conversion Date shall be decreased in direct
proportion to such decrease in outstanding shares.

         (iii) If any consolidation or merger of CPI with or into another
entity, or the sale of all or substantially all of its assets to another entity
shall be effected, or in case of any capital reorganization or reclassification
of the capital stock of CPI, then, as a condition of such consolidation, merger
or sale, reorganization or reclassification of the capital stock of CPI, lawful
and adequate provision shall be made whereby the Payee shall thereafter have the
right to receive upon the terms and conditions specified herein and in the
document governing any such transaction, and in lieu of the CPI Common Shares
immediately theretofore receivable upon the conversion of the Notes, such shares
of stock, or of securities, interests or assets (other than cash) as may be
issued or payable with respect to or in exchange for a number of outstanding CPI
Common Shares equal to the number of CPI Common Shares immediately theretofore
so receivable by the Payee had such consolidation, merger, sale, reorganization
or reclassification not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of the Payee to the end
that the provisions hereof (including without limitation provisions for
adjustment of the Conversion Rate) shall thereafter be applicable, as nearly as
may be in relation to any shares of stock, securities, interests or assets
thereafter deliverable upon the exercise of such conversion rights. The
provisions of this paragraph shall not prevent, or cause any adjustment of the
Conversion Rate on account of, a sale by CPI of the stock of any of its
subsidiaries.

         (iv) The Conversion Rate shall not be subject to adjustment for any
other reason including, but not limited to, the issuance of any shares, options,
warrants or derivative securities issued by CPI to any of its employees,
directors or consultants, or in any transaction other than one provided for in
Subsections (i), (ii) or (iii) above.

                                       3

<Page>

10. Investment Intent. Payee represents that it is acquiring this Note and will
acquire any CPI Common Shares pursuant to the exercise of its rights hereunder,
until the registration of such CPI Common Shares, for investment and not with a
view to the sale or distribution thereof. Maker and CPI shall afford Payee and
its representatives the opportunity to ask questions of and receive answers from
representatives of Maker and CPI with regard to the business and operations of
CPI prior to the exercise of its rights to purchase CPI Common Shares hereunder.

         Payee agrees that it will not rely upon any representations, written or
oral, of any person in connection with the exercise of its rights to purchase
CPI Common Shares hereunder unless such representations are made in writing and
delivered to Payee prior to its exercise of its rights hereunder.

         All certificates issued to Payee upon conversion, if issued prior to
the registration of the CPI Common Shares represented thereby, shall bear the
following legend:

                  The shares represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"), and may not be sold, transferred, pledged,
                  hypothecated or otherwise disposed of in the absence of (i) an
                  effective registration statement under the Act, or (ii) an
                  opinion of counsel reasonably satisfactory to the issuer and
                  its counsel that registration is not required under the Act.

                  Notwithstanding the foregoing, the Maker,CPI and Payee hereby
                  acknowledge that nothing in this paragraph of this Note shall
                  diminish the rights and obligations of the parties hereto set
                  forth in a Registration Rights Agreement entered into on or
                  about October 9, 1997 and incorporated herein by reference.

11. Events of Default. In the event that the Principal Sum, the Prior Interest
Amount and Interest thereon is not paid on or before its Maturity Date, or upon
acceleration, or if CPI Common Shares are not issued hereunder within seven (7)
calendar days of delivery by Payee of a Conversion Notice, or (b) there has been
an acceleration under the Amended and Restated Credit Agreement between CPI
Aerostructures, Inc., Kolar, Inc., the several banks and other financial
institutions or entities from time to time parties thereto and JPMorgan Chase
Bank, as Administrative Agent (the "Credit Agreement") or or if an obligation is
payable on demand, a demand has been made, or (c) if the Maker shall enter into
an assignment for the benefit of creditors, or admit in writing its inability to
pay its debts as they become due, or commence a voluntary bankruptcy proceeding,
or there is an order of relief entered in any involuntary bankruptcy case
against the Maker or if the Maker shall seek or consent to or acquiesce in the
appointment of any trustee or receiver for itself or any substantial part of its
property, and if such voluntary or involuntary proceeding is not terminated,
dismissed or concluded in a manner not adverse to Maker within sixty (60) days
of the commencement of such proceeding, then, and in any such event (such events
constituting both singly and collectively an "Event of Default"), the Payee at
its option may by written notice to Maker (1) declare this Note to be due and
payable in full, whereupon the same shall forthwith mature and become due and

                                       4

<Page>

payable, without presentment, demand, protest or further notice, all of which
are hereby waived. During the period during which an Event of Default shall have
occurred and shall be continuing the interest rate on the unpaid Principal Sum
and the Prior Interest Amount shall equal the greater of 12% per annum or two
(2) percentage points above the prime rate of JPMorgan Chase Bank, but shall not
exceed 18% per annum. In no event shall any interest payable under this Note
exceed the maximum interest rate permitted by law, and any interest collected
hereunder that may be in excess of such rate shall be applied to the reduction
first, of the Prior Interest Amount, and second, of the Principal Sum, or shall
be returned to Maker in the event that the Prior Interest Amount and the
Principal Sum shall have been paid in full. The liability of the Maker and any
endorser hereunder shall be unconditional and, except as set forth herein, shall
not be in any manner affected by any indulgence whatsoever granted or consented
to by the Payee hereof, including without limitation, an extension of time,
renewal, waiver or other modification. Any failure of the Payee hereof to
exercise any right hereunder shall not be construed as a waiver of the right to
exercise the same or any other right at any time and from time to time.

12. Payment to Registered Payees. Amounts due pursuant to this Note will be paid
only to the Payee in whose name this Note is registered at the close of business
on the Maturity Date, or, if all or any portion hereof is prepaid ("Prepayment
Date"), on a record date ("Record Date") for such Prepayment Date, which Record
Date shall be ten (10) business days next preceding such Prepayment Date

13.      Transfer of Note.

         (i) Subject to the terms hereof, the surrender of this Note for
registration of transfer may be made by delivering this Note duly endorsed and
accompanied by a written instrument of assignment in the form attached hereto
(the "Assignment"), duly executed by the Payee or his attorney duly authorized
in writing. A transfer that complies with all of the provisions of this Section
shall be deemed effective as of the date set forth in the Assignment.

         (ii) As a condition to the transfer of CPI Common Shares, the holder
requesting to so transfer shall execute appropriate investment letters and other
documents as may be reasonably required by the Maker and its counsel to assure
that the shares of CPI Common Shares are transferred only in compliance with
applicable securities laws.

         (iii) As soon as practicable after delivery of the Assignment to the
Maker, one or more new Notes of authorized denominations, and for the same
aggregate principal amount, will be issued by the Maker to the designated
transferee or transferees.

         (iv) No service charge shall be made for any such registration of
transfer or exchange, but the Maker may require payment of a sum sufficient to
cover any tax or other governmental charges payable in connection therewith.

         (v) Notwithstanding the above, this Note may be transferred to Liguori
and shall be registered in his name without cost or expense to Liguori and
without the requirement that Payee, Maker or Liguori execute any investment
letters or other documents (other than an instrument of assignment) to effect
such change.

         (vi) If the Principal Sum and/or Prior Interest Amount has been reduced
at the time such transfer is requested, the Maker shall issue to the transferee
a new Note of like tenor ("New Note") reflecting the reduced Prior Interest
Amount and Principal Sum, and, if any CPI Common Shares have been issued
pursuant to a Conversion Notice, the Reduced Principal Sum resulting from such
conversion and appropriate changes in Section 7 reflecting the reduced amount of
CPI Common Shares remaining available upon conversion. If all of the CPI Common
Shares available for issuance upon conversion have been issued, the New Note
shall be amended to eliminate references to conversion.

                                       5

<Page>

         (vii) If this Note is lost, misplaced or destroyed, the Maker will
issue a replacement note to then then-registered Payee upon presentation to the
Maker of an appropriate affidavit of loss, indemnity and, in Maker's reasonable
discretion, an indemnity bond, in such form and in such amount as Maker shall
reasonably require.

14. Transfer of CPI Common Shares. As a condition to the transfer of CPI Common
Shares, the transferee shall execute appropriate investment letters and other
documents as may be reasonably required by the Maker and its counsel to assure
that the CPI Common Shares are transferred only in compliance with applicable
securities laws.

15. SUBORDINATION. ALL INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATED TO OTHER
INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE
SUBJECT TO THE TERMS OF, THE INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS
OF OCTOBER 9, 1997 (THE "SUBORDINATION AGREEMENT"), AS THE SAME HAS BEEN AMENDED
AS OF THE DATE HEREOF AND AS THE SAME AS THE SAME MAY HEREAFTER BE AMENDED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG CPI AEROSTRUCTURES
INC., KOLAR, INC., AND JPMORGAN CHASE BANK (FORMERLY THE CHASE MANHATTAN BANK),
AS ADMINISTRATIVE AGENT FOR THE LENDERS PARTIES TO THE AMENDED AND RESTATED
SENIOR CREDIT AGREEMENT REFERRED TO IN THE SUBORDINATION AGREEMENT AS AMENDED,
AND THE HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS ARISING UNDER THE
SUBORDINATED LOAN DOCUMENTS REFERRED TO IN THE SUBORDINATION AGREEMENT,
INCLUDING, WITHOUT LIMITATION, HEREUNDER.

16. Extensions or Reductions of Maturity Date; Modification of Subordination.

         (i) The Maturity Date shall be extended to such date as shall be 90
days after the maturity date to which any of the Loans under the Credit
Agreement shall have been extended, or, if any portion of such Loans shall have
been refinanced, to 90 days after the maturity date of such refinanced Loans;
provided that such extension shall not be later than September 30, 2007, without
the consent of Payee.

         (ii) Notwithstanding the forgoing, if pursuant to subsection (i) above
the Maturity Date is extended to a date which is after September 28, 2005
(respectively, the "Trigger Extension" and the "Trigger Extension Date"), the
subordination set forth in Section 15 above shall be modified to the extent
specified in Section 2 of the Amendment to the Intercreditor and Subordination
Agreement executed as of the date hereof.

                                       6

<Page>

         (iii) Notwithstanding the foregoing, if the obligations senior to
obligations owed to Payee under this Note are paid in full prior to the Maturity
Date, the Payee, at its option, may declare the Note immediately due and payable
in full.

17. Notices. All notices, requests and demands to or upon the Payee or the Maker
shall be delivered in the manner, and shall be deemed delivered on the dates
specified in Section 19 of the Subordination Agreement as amended.

18. Waiver of Presentment, etc. Maker hereby waives presentment for payment,
demand, protest, notice of protest, notice of nonpayment and diligence in
bringing suit and any other notice or demand of any kind or description, other
than as required by this Note.

19. Costs of Collection;Attorneys' Fees. Maker shall pay the costs and expenses
of collection, including, without limitation, reasonable attorneys fees.

                                       7

<Page>

         IN WITNESS WHEREOF, the Maker has caused this Amended and Restated Note
to be executed and delivered by its President on the date first above written.

                                    KOLAR, INC.


                                    By: /s/ Edward J. Fred
                                        ------------------
                                        Edward J. Fred, Executive Vice President

         CPI AEROSTRUCTURES, INC. is executing this Amended and Restated Note
with respect to its rights and obligations set forth in Sections 5, 7, 9, 10, 11
and 14.

                                     CPI AEROSTRUCTURES, INC.


                                     By: /s/ Edward J. Fred
                                         ------------------
                                         Edward J. Fred, President

                                       8

<Page>


STATE OF NEW YORK )
                  :ss:
COUNTY OF NEW YORK)



On the 25th day of June in the year 2002 before me, the undersigned,
personally appeared EDWARD J. FRED personally known to me or proved to me on
the basis of satisfactory evidence to be the individual(s) whose name(s) is
(are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.

/s/
Signature and Office of individual
taking acknowledgment






<Page>

                                 ASSIGNMENT FORM

I, or we, hereby assign and transfer this
Note to:                                      --------------------------------
                                              Insert Percentage of "Aggregate
                                              Due Amount" Transferred

- -----------------------------------------------------------------------------
(Insert assignee's social security or tax ID number)

- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
              (Print or type assignee's name, address and zip code)

and irrevocably appoint:

- -----------------------------------------------------------------------------
as agent to transfer this Note on the books of the Issuer. The agent may
substitute another to act for him.

Date:
     -----------

- -----------------------------------------------------------------------------
(Print Name)

By:
   -----------------------------------------------------------------------------
       (Sign exactly as your name appears on the first page of the Note)

Signature Guaranteed:

- -----------------------------------------------------------------------------
The Signature must be guaranteed by an officer of a commercial bank or trust
company or Member of an accepted medallion guaranty



<Page>


                                CONVERSION NOTICE
                                 To Kolar, Inc.

                  The undersigned Payee of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
_____________ Common Shares or $__________, or any integral multiple thereof)
below designated, into Common Shares of CPI Aerostructures, Inc. and directs
that the shares issuable and deliverable upon conversion, together with any Note
representing any unconverted principal amount hereof, be issued and delivered to
the registered Payee hereof unless a different name has been indicated below and
the undersigned's signature is guaranteed as indicated. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.

Dated:
      --------------------------------------
Principal Amount to be converted: $
                                   ---------------------------------------------
Total Conversion Price delivered to date $
                                          --------------------------------------


           By:
              ------------------------------------------------------------------
              (Sign exactly as your name appears on the first page of this Note)

              ------------------------------------------------------------------
              Please print name and address (including zip code)

              Social Security or other Taxpayer ID number:

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



- ------------------------------------------------------------------
MEDALLION SIGNATURE GUARANTY (by a New York commercial bank or
trust company or member of an accepted medallion guaranty)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.52
<SEQUENCE>12
<FILENAME>cpi8k-6252002_1052.txt
<DESCRIPTION>GUARANTY AGREEMENT AMENDMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.52

                            CPI Aerostructures, Inc.

                          Guaranty Agreement Amendment

         AMENDMENT dated as of June 25, 2002 to Guaranty Agreement (the
"Guaranty") dated October 9, 1997, given by CPI AEROSTRUCTURES, INC., a New York
corporation and its successors and assigns ("Guarantor"), in favor of RALOK,
INC. (formerly Kolar Machine, Inc.), a New York corporation ( "Principal"), to
secure all of the obligations and liabilities of Kolar, Inc., a Delaware
corporation ("Buyer") to Principal as set forth in the Guaranty and herein.

                                    RECITALS

A. The Guaranty was previously issued to the Principal in connections with an
Asset Purchase Agreement by and among CPI, Buyer, Principal and Daniel Liguori.

B. Pursuant to the Asset Purchase Agreement, Buyer issued an 8% convertible
subordinated promissory note (the "Note"), the payment of which was guaranteed
by the Guarantor pursuant to the Guaranty. Buyer has executed and delivered to
Principal an Amended and Restated Note dated as of the date of this Amendment
(the "Amended Note").

C. Pursuant to the Asset Purchase Agreement the Guarantor guaranteed the payment
to principal of all obligations of the Buyer to the Principal under the Asset
Purchase Agreement (the "Obligations").

D. The Guaranty is expressly subordinate to certain other indebtedness of the
Guarantor pursuant to a certain Intercreditor and Subordination Agreement (as
defined in the Guaranty Agreement - hereafter "Subordination Agreement") as said
Subordination Agreement may be amended, supplemented or modified.

E. The Subordination Agreement has been amended such that, among other matters,
the obligation of the Guarantor has been extended to certain additional
indebtedness of the Guarantor in the amount of $704,484.41 described as the
"Tranche C Loan" under an Amended and Restated Credit Agreement of even date
herewith among the Guarantor and Kolar, Inc. as co-borrowers, JPMorgan Chase
Bank as Administrative Agent and the Senior Lenders described therein; and for
avoidance of doubt the parties wish to confirm and agree that the obligations of
the Guarantor under the Guaranty are subordinated to the obligation of the
Guarantor to repay the Tranche C Loan, subject to the limitations contained in
the Subordination Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the terms,
conditions, and mutual covenants appearing in this Guaranty, the Guarantor and
the Principal hereby agree as follows:



<Page>


         Section 1. Section 11 of the Guaranty is hereby amended by adding an
additional sentence at the end thereof, reading as follows:


         "WITHOUT LIMITATION OF THE FOREGOING, THE INDEBTEDNESS OF GUARANTOR
         WHICH IS SUBORDINATED HEREBY INCLUDES THE INDEBTEDNESS OF THE GUARANTOR
         IN RESPECT OF THE "TRANCHE C LOAN" AS DESCRIBED IN THE SUBORDINATION
         AGREEMENT, AS THE SAME HAS BEEN AMENDED BY AMENDMENT OF EVEN DATE
         HEREWITH, SUBJECT TO THE TERMS AND LIMITATIONS OF THE SUBORDINATION
         AGREEMENT."

         Section 2. Guarantor hereby acknowledges, ratifies and confirms that
without limiting the terms of the Guaranty, each and every obligation of the
Amended Note is subject to the Guaranty and that there are no defenses, offsets,
recoupments or counterclaims of any kind or description to the Guaranty. Except
as amended hereby, the terms of the Guaranty shall continue in full force and
effect.

         Section 3. Counterparts. This Agreement may be executed in counterparts
and all so executed shall constitute one Agreement, binding on all parties
notwithstanding that all parties are not signatories to the original or the same
counterpart.


                                       2


<Page>




                  IN WITNESS WHEREOF, the Guarantor has executed this Amendment
to Guaranty Agreement as of the day and year first written above.

                                              CPI AEROSTRUCTURES, INC.


                                              By: /s/ Edward J. Fred
                                                  --------------------------
                                                  Edward J. Fred,  President


The foregoing amendment is accepted and approved.

Ralok, Inc.

By: /s/



                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.53
<SEQUENCE>13
<FILENAME>cpi8k-6252002_1053.txt
<DESCRIPTION>MORTGAGE SUBORDINATION AGREEMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.53
?-------------------------------------------------

         RALOK, INC.
                                                          Subordinate Mortgagee
         - with -

         ----------------------------,

         JPMORGAN CHASE BANK
                                                          Senior Mortgagee


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

                             SUBORDINATION AGREEMENT

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


                           Date:                     June 25, 2002
                           Section:                  ___________
                           Block:                    ___________
                           Lot:                      ___________
                           County:          Tompkins
- ------------------------------------------------------------
Record and Return to:

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

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

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

<Page>




                             SUBORDINATION AGREEMENT

         Agreement made by RALOK, INC. (formerly Kolar Machine, Inc.) a New York
corporation having an office at c/o c/o Daniel Liguori, 1001 Bay Road, #210C,
Vero Beach, Fla 32963 ("Subordinate Mortgagee") for the benefit of JPMorgan
Chase Bank, having an address at 395 North Service Road, Suite 302, Melville,
New York 11747 ("Senior Mortgagee").

                                    RECITALS

         A        Prior Mortgage

         (1) Senior Mortgagee is the holder and owner of a Mortgage, Fixture
Filing and Assignment of Leases and Rents (the "Prior Mortgage"), dated October
9, 1997, made by Kolar, Inc. to JPMorgan Chase Bank (formerly The Chase
Manhattan Bank and acting as the "Administrative Agent") under a Credit
Agreement dated October 9, 1997 (the "Original Credit Agreement"). by and among
Kolar, Inc. (the "Borrower"), said Administrative Agent, CPI Aerostructures,
Inc. (CPI") and certain lenders described therein. The Prior Mortgage encumbers
the premises (the "Original Premises") described on Schedule A annexed thereto
and securing certain Notes (collectively the "Credit Agreement Notes"), dated
October 9, 1997, made by Borrower to JPMorgan Chase Bank (formerly The Chase
Manhattan Bank) in the original principal sum of $10,375,000 (the lien of said
Prior Mortgage being limited to $1,500,000);

         (2) The Prior Mortgage was recorded in the office of the County Clerk
of Tompkins County on October 9, 1997, in Book 1127, page 225;

         B.       Subordinate Mortgage

         (1) Subordinate Mortgagee is the holder and owner of a Mortgage,
Fixture Filing and Assignment of Leases and Rents (the "Subordinate Mortgage"),
dated October 9, 1997, made by Borrower to Subordinate Mortgagee, as lender,
encumbering the Original Premises and securing that certain Note (the "Seller
Note") dated October 9, 1997, made by Borrower in favor of Subordinate Mortgagee
in the original principal sum of $4,000,000 (the Seller Note and the Subordinate
Mortgage being collectively referred to as the "Subordinate Loan Documents");

         (2) The Subordinate Mortgage was recorded in the office of the County
Clerk of Tompkins County on October 10, 1997 in Book 1127, page 269; and will be
modified pursuant to a Mortgage Modification Agreement in form attached as
Schedule 1.


<Page>

         C.       As of the date hereof, the remaining real estate encumbered by
the Prior Mortgage and the Subordinate Mortgage consists of "Parcel A" and
"Parcel B" set forth in such mortgages (hereafter the "Remaining Real Estate").
A description of said Remaining Real Estate is annexed to this Agreement as
Schedule 2.

         D.       As of the date hereof the aggregate principal amount remaining
secured by the Prior Mortgage prior to execution of the Prior Mortgage Amendment
(defined below) was $1,207,033.

         E.       As of the date hereof, the Original Credit Agreement has been
amended and restated (hereafter the "Amended and Restated Credit Agreement"), to
provide that an additional $1,700,000 (described in the Amended and Restated
Credit Agreement as the "Deficiency Debt") shall be added to the principal
indebtedness secured by the Mortgage. Such indebtedness will be represented by
an amended and restated note or notes designated in the Amended and Restated
Credit Agreement as the "Replacement Term Note."

         F.       In addition, the Amended and Restated Credit Agreement has
been amended to provide that an additional $704,484.41 in principal indebtedness
of Kolar, Inc. (described therein as the "Tranche C Loan") shall be added to the
loans covered thereby.

         F.       The Prior Mortgage has been amended as of the date hereof
("Prior Mortgage Amendment") to reflect the Deficiency Debt as additional
principal indebtedness secured by the Prior Mortgage, said amendment having been
recorded in the office of the County Clerk of Tompkins County on
___________________, 2002 in Book ________, page _______; and, in addition, that
the Subordinate Mortgagee agree further to subordinate the lien of the
Subordinate Mortgage to the lien and the security interest of the Tranche C
Mortgage as provided below;

         G.       In order to secure the Tranche C Loan, Borrower has granted a
mortgage (the "Tranche C Mortgage") to the Administrative Agent for the benefit
of the holders of the Tranche C Loan. The Tranche C Mortgage also encumbers the
Remaining Real Estate. The Amended and Restated Credit Agreement provides for
the issuance by Borrower, as co-Borrower with CPI, of (i) Replacement Term
Notes, representing the Tranche A Loan thereunder, and (ii) a Tranche C Note
representing the Tranche C Loan thereunder.

         H.       The Amended and Restated Credit Agreement, the Replacement
Term Notes, the Tranche C Note, the Prior Mortgage, the Prior Mortgage
Amendment, the Tranche C Mortgage and all other documents executed pursuant to
the Original Credit Agreement and the Amended and Restated Credit Agreement
evidencing obligations of CPI and/or Borrower under the Amended and Restated
Credit Agreement, as the same have been or may hereafter be amended, are
hereafter referred to as the "Senior Loan Documents." The Replacement Term Note
and the Tranche C Note are collectively referred to as the "Senior Notes."

                                       2

<Page>

         F.       It is a condition to the execution of the Amended and Restated
Credit Agreement by the Administrative Agent and the Lenders under the Original
Credit Agreement that the Subordinate Mortgagee confirm, and the Subordinate
Mortgagee has agreed to confirm, the subordination of the Subordinate Mortgage
to the lien and the security interest of the Prior Mortgage; and, in addition,
that the Subordinate Mortgagee agree further to subordinate the lien of the
Subordinate Mortgage to the lien and the security interest of the Tranche C
Mortgage;

         NOW THEREFORE, in consideration of TEN DOLLARS ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1. The recitals to this Agreement are incorporated herein and made a
part hereof by this reference thereto.

         2. Subordinate Mortgagee hereby agrees that all of the liens and
security interests created by the Subordinate Loan Documents shall at all times
be wholly subordinate to the liens and security interests created by the Senior
Loan Documents and any and all advances (whether or not obligatory) advanced or
incurred in accordance therewith, including without limitation the Tranche C
Loan and the Tranche C Mortgage, except that the Subordinate Mortgage shall be
in pari passu to the lien of the Tranche C Mortgage to the extent provided in an
Intercreditor and Subordination Agreement dated October 9, 1997 as amended by an
amendment thereto dated as of the date hereof.

         3. The terms and conditions of the subordination contained in the
Subordinate Mortgage sated October 9, 1997 shall remain in full force and
effect.

         4. This Agreement will be governed by, and construed and enforced in
accordance with, the laws of the State of New York. Subordinate Mortgagee hereby
consents to the jurisdiction of any federal or state court within the Tompkins
Country, State of New York, and also consents to service of process by any means
authorized by those courts or federal law.

                                       3

<Page>



         IN WITNESS WHEREOF the undersigned has executed this Subordination
Agreement as of the date first above written.

                                                     RALOK, INC.


                                                     By: /s/
                                                         Name:
                                                         Title:

WITNESS:

/s/



STATE OF NEW YORK          )
COUNTY OF                  )ss.:

On the ____day of June in the year 2002 before me, the undersigned, personally
appeared ______________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, that by his signature on the instrument, the individual,
or the person upon behalf of which the individual acted, executed the
instrument, and that such individual made such appearance before the undersigned
in the ______________ _____________________________ (insert the city or other
political subdivision), State of Florida.


(signature and office of individual taking acknowledgment)
Record and Return to:

HERRICK, FEINSTEIN
David A. Rosen, Esq.
2 Park Avenue
New York, New York  10016


                                       4
<Page>


                                   SCHEDULE 1


                    Form of Mortgage Modification Agreement.

                  MORTGAGE MODIFICATION AND EXTENSION AGREEMENT


THIS MORTGAGE MODIFICATION AND EXTENSION AGREEMENT is made as of the ___ day of
June, 2002, by KOLAR, INC., ----- having offices at 200A Executive Drive,
Edgewood, New York 11717 ("Mortgagor"), in favor of RALOK, INC. (formerly KOLAR
MACHINE, INC.), having offices at c/o Daniel Liguori, 1001 Bay Road, #210C, Vero
Beach, FL 32963 ("Mortgagee").

         W I T N E S S E T H:

WHEREAS, Mortgagee is the lawful owner and holder of (i) a certain 8%
Convertible Subordinated Promissory Note made by Mortgagor to Mortgagee dated
October 9, 1997 given to secure the principal sum of $4,000,000.00, as
previously amended and as further amended and restated by an Amended and
Restated 8% Convertible Subordinated Promissory Note dated of even date
herewith, a copy of which is attached hereto and incorporated herein as Exhibit
"A" (together, "Note"), and (ii) the Mortgage securing the Note, which Mortgage
is dated October 9, 1997 and was recorded in the Tompkins County Clerk_s Office
on October 10, 1997 in Book 1127 of Mortgages at page 269 ("Mortgage"); and

WHEREAS, the Mortgage is now a valid lien on the premises described therein
("Premises"); and

WHEREAS, Mortgagee and Mortgagor have agreed to modify the terms of the Mortgage
in the manner set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the receipt and adequacy of which are hereby acknowledged, the parties
agree as follows:

1. Validity of Note and Mortgage. The Note is a valid, subsisting obligation of
Mortgagor upon which there is unpaid the principal sum of $4,000,000 with
interest thereon and the Mortgage is and remains a lien upon the Premises in
such amount, together with interest and any other charges due thereon. There is
no defense, counterclaim, set-off or recoupment to the Note, Mortgage or the
Indebtedness represented thereby.

2. Indebtedness. Mortgagor agrees that it is presently indebted to Mortgagee in
the principal amount of $4,000,000 with interest as provided in the Note
("Indebtedness").

                                       5

<Page>

3. No Defenses. There are no defenses, counterclaims, recoupments or setoffs to
the Note, the Mortgage or the Indebtedness represented thereby.

4. Modification of Mortgage. The terms of the Mortgage are modified to provide
that the Mortgage secures the payment of the indebtedness evidenced by the Note,
as defined herein, together with any and all renewals, extensions,
substitutions, modifications, amendments and consolidations thereof.

5. Terms of Mortgage. The terms of the Mortgage shall not be impaired by
anything herein contained, but whenever the terms, provisions, covenants and
conditions of this Agreement conflict in any way with the terms, provisions,
covenants or conditions of the Mortgage, the terms, provisions, covenants and
conditions of this Agreement shall control and prevail. Otherwise the terms of
the Mortgage shall remain in full force and effect. Notwithstanding any other
term or condition of this Agreement, there shall be no greater amount secured
under this Agreement than under the Mortgage.

6. Mortgagor's Interest in the Premises. Mortgagor represents and warrants that
it is the lawful owner of the Premises.

7. Written Termination or Change of this Agreement. This Agreement may not be
terminated, changed, or amended except by a written agreement signed by the
parties.

8. Counterparts. This Agreement may be executed in counterparts and all so
executed shall constitute one Modification and Extension Agreement, binding on
Mortgagor and Mortgagee notwithstanding that all parties are not signatories to
the original or the same counterpart.

IN WITNESS WHEREOF, this Modification and Extension Agreement has been duly
executed by Mortgagor and Mortgagee.

MORTGAGOR:                                  KOLAR, INC.


By:

MORTGAGEE:                                  RALOK, INC.


By:


STATE OF NEW YORK          )
COUNTY OF                  )ss.:

On the ___ day of June in the year 2002 before me, the undersigned, a Notary
Public in and for said State, personally appeared _________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.


Notary Public

STATE OF                            )
COUNTY OF                           )ss.:

On the ____day of June in the year 2002 before me, the undersigned, personally
appeared ______________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, that by his signature on the instrument, the individual,
or the person upon behalf of which the individual acted, executed the
instrument, and that such individual made such appearance before the undersigned
in the ______________ _____________________________ (insert the city or other
political subdivision), State of ________________________.


(signature and office of individual taking acknowledgment)
Record and Return to:
GREEN & SEIFTER, ATTORNEYS, PLLC
David A. Holstein, Esq.
One Lincoln Center
Syracuse, New York 13202-1387


                                       6


<Page>



                                   SCHEDULE 2

                    Description of the Remaining Real Estate

Parcel A

I:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point at the intersection of the east line of Cliff Street and
the north line of former Cascadilla Street (unopened), running thence North
05(Degree) 30' East along the east line of Cliff Street a distance of 450 feet
to a nail set; running thence South 87(Degree) 51' East a distance of 118.7 feet
to a point; running thence South 01(Degree) 49' West for a distance of 159.8
feet to a point; running thence South 01(Degree) 37' West for a distance of 307
feet to a point; running thence North 81(Degree) 09' West a distance of 149.8
feet to the point and place of beginning.

II:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at a point in the North line of former Cascadilla Street (unopened
street), said point being located South 81(Degree) 09'East for a distance of
149.8 feet from the intersection of said streetline with the east line of Cliff
Street; running thence South 81(Degree)09' East for a distance of 50 feet to an
iron pipe set; running thence North 01(Degree) 39'East for a distance of 473.83
feet to an iron pipe found; running thence North 89(Degree) 17' West passing
through an iron stake at 38 feet and continuing for a total distance of 49.3
feet to a point; running thence South 01(Degree) 49' West for a distance of
159.8 feet to a point; running thence South 01(Degree) 37' West for a distance
of 307 feet to the point and place of beginning.

III:
                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:
BEGINNING at an iron pipe found in the west line of Cliff Street, said point
being the southeast corner of Tax Map Number 42-1-9, being lands reputedly of
Rea; running thence North 80(Degree) 58' West passing through an iron pipe at a
distance of 7.2 feet, and continuing for a total distance of 60 feet to a point;
running thence South 07(Degree) 14'West passing through an iron pipe found at a
distance of 86 feet and continuing for a total distance of 146 feet to a point
in the centerline of an existing ravine; running thence Easterly along the
centerline of said ravine for a distance of 70 feet to a point in the west line
of Cliff Street, said course having a chord bearing and distance of South
69(Degree) 07'East - 66.5 feet; running thence North 5(Degree) 30'East for a
distance of 154 feet to the point and place of beginning.

                                       7

<Page>

PARCEL B

                  ALL THAT TRACT OR PARCEL OF LAND situate in the City of
Ithaca, County of Tompkins, State of New York, bounded and described as follows:

                  BEGINNING at a nail set in the at line of Cliff Street, said
nail being located North 05(Degree) 30' East a distance of 450 feet from the
intersection of Cliff Street with the North line of former Cascadilla Street
(unopened); running thence North 05(Degree) 30' East along the east line of
Cliff Street for a distance of 47.5 feet to an iron pin set; running thence
North 00(Degree) 49' West along the east line of Cliff Street for a distance of
241.9 feet to an iron pin set; running thence North 89(Degree) 11' East for a
distance of 130.0 feet to an iron pin set; running thence South 00(Degree) 49'
East for a distance of 248.4 feet to an iron pin set; running thence South
05(Degree) 30' West for a distance of 47.5 feet to an iron pipe found; running
thence North 89(Degree) 17' West for a distance of 11.3 feet to a point; running
thence North 87(Degree) 51' West for a distance of 118.70 feet to the point and
place of beginning.



                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.54
<SEQUENCE>14
<FILENAME>cpi8k-6252002_1054.txt
<DESCRIPTION>MORTGAGE MODIFICATION AGREEMENT (6-25-2002)
<TEXT>
                                                                   EXHIBIT 10.54

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

         KOLAR, INC.
                                                                       Mortgagor
         - with -

         ----------------------------,

         JPMORGAN CHASE BANK
                                                                       Mortgagee


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

                         MORTGAGE MODIFICATION AGREEMENT
- ------------------------------------------------------------


                           Date:                     June 25, 2002
                           Section:
                           Block:
                           Lot:
                           County:                   Tompkins
- -------------------------------------------------------------------------------

Record and Return to:

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

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

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

<Page>




                         MORTGAGE MODIFICATION AGREEMENT

         Agreement made by KOLAR, INC. a New York corporation having an office
at 200A Executive Drive Edgewood, New York 11717 ("Mortgagor") for the benefit
of JPMorgan Chase Bank, having an address at 395 North Service Road, Suite 302,
Melville, New York 11747 ("Mortgagee").

                                    RECITALS

         A.       Mortgage

         (1) Mortgagee is the holder and owner of a Mortgage, Fixture Filing and
Assignment of Leases and Rents (the "Mortgage"), dated October 9, 1997, made by
Kolar, Inc., to JPMorgan Chase Bank (formerly The Chase Manhattan Bank and
acting as the "Administrative Agent") under a Credit Agreement dated October 9,
1997 (the "Original Credit Agreement") by and among the Mortgagor and said
Administrative Agent, CPI Aerostructures, Inc. and certain lenders described
therein. The Mortgage encumbered the premises (the "Original Premises")
described on Schedule A annexed thereto and secured certain Notes (collectively
the "Credit Agreement Notes"), dated October 9, 1997, made by Mortgagor to
JPMorgan Chase Bank (formerly The Chase Manhattan Bank) in the original
principal sum of $10,375,000 (the lien of said Mortgage having been limited to
$1,500,000);

         (2) The Mortgage was recorded in the office of the County Clerk of
Tompkins County on October 9, 1997, in Book 1127, page 225;

         B.       As of the date hereof, the Original Credit Agreement has been
amended and restated (hereafter the "Amended and Restated Credit Agreement"), to
provide that an additional $1,700,000 (described in the Amended and Restated
Credit Agreement as the "Deficiency Debt") shall be added to the indebtedness
secured by the Mortgage. Such indebtedness will be represented by an amended and
restated note or notes designated in the Amended and Restated Credit Agreement
as the "Replacement Term Note".

         C.       As of the date hereof the aggregate principal amount remaining
secured by the Mortgage prior to the execution of this Agreement was $1,206,962.
The aggregate amount secured by the Mortgage, as amended hereby, shall remain
$1,500,000. Accordingly, the additional amount secured by the Mortgage as
amended hereby is $268,500.

         D.       It is a condition to the execution of the Amended and Restated
Credit Agreement by the Administrative Agent and the Lenders under the Original
Credit Agreement that the Mortgagor under the Mortgage execute this Amendment;
and it is intended that the Mortgage, as amended hereby, shall secure the
Replacement Term Note.

<Page>

         NOW THEREFORE, in consideration of TEN DOLLARS ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1. All references in the Mortgage to the "Note" shall be deemed
references to the Replacement Term Note.

         2. The Mortgage shall continue to secure all sums that are or may
become due under the Note, as modified by the Note Modification Agreement.

         3. All references in the Mortgage to the "Credit Agreement" shall be
deemed to refer to the Credit Agreement as amended and restated by the Amended
and Restated Credit Agreement.

         4. Without limitation of the foregoing, all references in the Mortgage
to the "Obligations" and "Security Documents" shall refers to such terms as
defined in the Amended and Restated Credit Agreement; and all references to the
"Indebtedness" secured by the Mortgage shall refer to the indebtedness
represented by the Replacement Term Note; and all references to other
capitalized, defined terms in the Mortgage shall be deemed to refer to those
terms as defined in the Amended and Restated Credit Agreement.

         5. All of the terms and conditions of the Mortgage, as modified hereby,
are hereby ratified and confirmed and shall continue in full force and effect.

                             Signature Page Follows


                                       2

<Page>



         4. This Mortgage Modification Agreement shall be binding upon and inure
to the benefit of Mortgagor and Mortgagee and their respective successors and
assigns.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

KOLAR, INC.

By:      /s/ Edward J. Fred
         ------------------------
         Edward J. Fred
         Executive Vice President





STATE OF NEW YORK )
                  :ss:
COUNTY OF NEW YORK)

On the 25th day of June in the year 2002 before me, the undersigned, personally
appeared Edward J. Fred, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity(ies), and that by his/her/their signature(s) on
the instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

/s/
- ----------------------------------
Signature and Office of individual
taking acknowledgment



                                       3

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
