Exhibit 10.4
 

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NEXMED (U.S.A.), INC., AS MORTGAGOR

and

THE TAIL WIND FUND LTD. AND SOLOMON STRATEGIC HOLDINGS, INC., COLLECTIVELY AS
MORTGAGEE

 

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MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
 

(Fee)

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Dated :
As of June 30, 2008
       
Locations:
89 Twin Rivers Drive
   
East Windsor, New Jersey 08520
         
113 Milford Road
   
East Windsor, New Jersey 08520

The premises described within this instrument are also known as:

 
Block 20.06
Lot 6
       

and

 
Block 20.06
Lot 5
 

 
on the Official Tax Map of Mercer County.

 

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RECORD AND RETURN TO:
 

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MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS

THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS is made as
of the 30th day of June, 2008, by NEXMED (U.S.A.), INC., a Delaware corporation
having its principal place of business at 89 Twin Rivers Drive, East Windsor,
New Jersey 08520 (the “Mortgagor”), to THE TAIL WIND FUND LTD., a British Virgin
Islands limited liability company having an address at c/o Tail Wind Advisory
and Management Ltd., Attn: David Crook, 77 Long Acre, London WC2E 9LB UK (“Tail
Wind”), and SOLOMON STRATEGIC HOLDINGS, INC., a British Virgin Islands limited
liability company, (collectively, the “Mortgagee”), and Tail Wind as collateral
agent (including any successor collateral agent, the “Collateral Agent”).

W I T N E S S E T H

WHEREAS, the Mortgagor is the owner of a fee estate in the real property
described in Exhibit A and Exhibit B attached hereto and made a part hereof (the
“Premises”) and commonly known as 89 Twin Rivers Drive, East Windsor, New Jersey
08520 and 113 Milford Road, East Windsor, New Jersey 08520, respectively;
 
WHEREAS, the Mortgagor is a wholly-owned subsidiary of NexMed, Inc., a Nevada
corporation (“Parent”);
 
WHEREAS, the Parent is executing, issuing and delivering one or more of the
Parent’s 7% Convertible Notes due December 31, 2011 in the aggregate original
principal amount of Five Million Seven Hundred Fifty Thousand Dollars
($5,750,000), lawful money of the United States of America, dated on or about
the date hereof, to the Mortgagee, pursuant to the terms of that certain
Purchase Agreement entered into on or about the date hereof between the Parent
and the Mortgagee (“Purchase Agreement”); and
 
WHEREAS, as a condition to and as an inducement for the Mortgagee purchasing the
Notes, the Mortgagor is entering into a subsidiary guaranty (“Guaranty”) dated
on or about the date hereof in favor of the Mortgagee guaranteeing the Parent’s
obligations under the Notes and the agreements entered into in connection
therewith;
 

NOW THEREFORE, to secure the payment of an indebtedness in the aggregate
original principal sum of Five Million Seven Hundred Fifty Thousand Dollars
($5,750,000), lawful money of the United States of America, to be paid with
interest and with accretions to such principal amount (said indebtedness,
interest, accretions to the principal amount due thereunder, and all other sums
which may or shall become due hereunder or under the Notes and Guaranty,
collectively, the “Debt”) pursuant to the above described 7% Convertible Notes
due December 31, 2011 given by the Parent to the Mortgagee (the notes, together
with all extensions, renewals or modifications thereof, being hereinafter
collectively called the “Notes”) and pursuant to the Guaranty given by the
Mortgagor to the Mortgagee, the Mortgagor has mortgaged, given, granted,
bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged, assigned and
hypothecated, and by these presents does mortgage, give, grant, bargain, sell,
alien, convey, confirm, pledge, assign and hypothecate unto the Mortgagee
forever all right, title and interest of the Mortgagor now owned, or hereafter
acquired, in and to the following property, rights and interest (such property,
rights and interests, collectively, the “Mortgaged Property”):

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(a) The Premises;
 
(b) all buildings, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements now or hereafter located
on the Premises (the “Improvements”);
 
(c) all of the estate, right, title, claim or demand of any nature whatsoever of
the Mortgagor, either in law or in equity, in possession or expectancy, in and
to the Premises, Improvements, Easements (defined below), Equipment (defined
below), Leases (defined below), and/or Rents (defined below), or any part
thereof;
 
(d) all easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights and powers,
and all estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments, and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Premises and/or Improvements (including, without
limitation, any and all development rights, air rights or similar or comparable
rights of any nature whatsoever now or hereafter appurtenant to the Premises
and/or Improvements or now or hereafter transferred to the Premises and/or
Improvements) and all land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Premises and/or Improvements to
the center line thereof (“Easements”);
 
(e) all machinery, apparatus, equipment, fittings, fixtures (including but not
limited to all heating, air conditioning, plumbing, lighting and communications
fixtures) now or hereafter located on the Mortgaged Property, and all machinery,
apparatus, equipment, fittings, fixtures (including but not limited to all
heating, air conditioning, plumbing, lighting and communications fixtures) which
are replacements of, additions to or upgrades of such items (collectively, the
“Equipment”); 
 
(f) all awards or payments, including interest thereon, and the right to receive
the same, which may be made with respect to the Premises, Improvements,
Easements, Equipment, Leases and/or Rents, whether from the exercise of the
right of eminent domain (including any transfer made in lieu of the exercise of
said right), or awards or refunds received as a result of a reduction in the
real estate taxes or tax assessment affecting the Premises, Improvements,
Easements, Equipment, Leases and/or Rents, or proceeds received in connection
with any tax certiorari proceeding affecting the Premises, Improvements,
Easements, Equipment, Leases and/or Rents, or for any other injury to or
decrease in the value of the Mortgaged Property;
 
(g) all leases and other agreements affecting the use or occupancy of the
Premises, Improvements, Easements and/or Equipment, now or hereafter entered
into (the “Leases”) and the right to receive and apply the rents, issues and
profits of the Premises, Improvements, Easements, Equipment and/or Leases (the
“Rents”) to the payment of the Debt;
 
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(h) all right, title and interest of the Mortgagor in and to (i) all contracts
from time to time executed by the Mortgagor or any manager or agent on its
behalf relating to the ownership, construction, maintenance, repair, operation,
occupancy, sale or financing of the Premises, Improvements, Easements,
Equipment, Leases and/or Rents, or any part thereof and all agreements relating
to the purchase or lease of any portion of the Premises, Improvements,
Easements, Equipment, Leases and/or Rents, or any property which is adjacent or
peripheral to the Premises, Improvements and/or Easements, together with the
right to exercise such options and all leases of Equipment, (ii) all consents,
licenses, building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or operation of
the Premises, Improvements, Easements, Equipment, Leases and/or Rents, or any
part thereof, and (iii) all drawings, plans, specifications and similar or
related items related to the Premises, Improvements, Easements, Equipment,
Leases and/or Rents;
 
(i) all books and records relating to or used in connection with the operation
of the Premises, Improvements, Easements, Equipment, Leases and/or Rents, or any
part thereof; all general intangibles related to the operation of the Premises,
Improvements, Easements, Equipment, Leases and/or Rents, now existing or
hereafter arising;
 
(j) all proceeds, both cash and non-cash, of the foregoing;
 
(k) all proceeds of and any unearned premiums on any insurance policies covering
the Premises, Improvements, Easements, Equipment, Leases and/or Rents,
including, without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for damage to the
Premises, Improvements, Easements, Equipment, Leases and/or Rents; and
 
(l) after the occurrence of an Event of Default hereunder, the right, in the
name and on behalf of the Mortgagor, to appear in and defend any action or
proceeding brought with respect to the Premises, Improvements, Easements,
Equipment, Leases and/or Rents, and to commence any action or proceeding to
protect the interest of the Mortgagee in the Premises, Improvements, Easements,
Equipment, Leases and/or Rents.
 
TO HAVE AND TO HOLD the above granted and described Mortgaged Property unto and
to the use and benefit of the Mortgagee, and the successors and assigns of the
Mortgagee, forever.
 
AND the Mortgagor covenants and agrees with and represents and warrants to the
Mortgagee as follows:
 
1. Payment of Debt. The Parent or Mortgagor will pay the Debt at the time and in
the manner provided for its payment in the Notes and in this Mortgage.
 
2. Representations and Warranties. Mortgagor represents and warrants to the
Mortgagee that:
 
(a) Warranty of Title. Mortgagor has good title to the Mortgaged Property and
has the right to mortgage, give, grant, bargain, sell, alien, enfeoff, convey,
confirm, pledge, assign and hypothecate the same, and Mortgagor possesses an
unencumbered fee interest in the Mortgaged Property and owns the Mortgaged
Property free and clear of all liens, encumbrances and charges whatsoever except
for those exceptions shown in the title insurance policy insuring the lien of
this Mortgage. Mortgagor shall forever warrant, defend and preserve such title
and the validity and priority of the lien of this Mortgage and shall forever
warrant and defend the same to Mortgagee against the claims of all persons
whomsoever.
 
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(b)  Consideration. (i) Contemporaneously with, and in consideration for, the
execution and delivery of this Mortgage, the Mortgagor is receiving new value
from the Mortgagee, which new value is reasonably equivalent value in exchange
for this Mortgage, (ii) 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, (iii) no bankruptcy or insolvency proceedings are pending or
contemplated by or, to the knowledge of Mortgagor, against the Mortgagor, and
(iv) this Mortgage is legal and valid and creates a lien on and security
interest in the Mortgaged Property.
 
(c) Authority. The Mortgagor (i) has full power, authority and legal right to
execute this Mortgage, and to mortgage, give, grant, bargain, sell, alien,
convey, confirm and assign the Mortgaged Property pursuant to the terms hereof
and to keep and observe all of the terms of this Mortgage on the Mortgagor's
part to be performed and (ii) is a duly organized and presently existing
corporation in good standing under the laws of the State of Delaware and this
Mortgage has been duly executed by authority of its Board of Directors. No
shareholder approval is required to authorize the execution, delivery and
performance of this Mortgage. The Mortgagor is qualified to do business in the
State of New Jersey.
 
(d) Priority. There are no liens on the Mortgaged Property other than those
created by this Mortgage. Upon filing of this Mortgage and a UCC-1 financing
statement fixture filing with Mercer County in the State of New Jersey, the
Mortgagee will have a first priority lien on the real property and fixtures
included within the Mortgaged Property. This Mortgage, upon the filing of a
UCC-1 financing statements describing the Mortgaged Property with the Secretary
of State of the State of Delaware, creates a valid, perfected (upon filing) and
first priority security interest in the personal property included in the
Mortgaged Property in favor of the Mortgagee. The Mortgagor hereby authorizes
the Collateral Agent to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Mortgaged Property
without the signature of the Mortgagor.
 
(e) Bills. There are no unpaid bills for labor, materials, supplies or services
furnished upon or in connection with the Mortgaged Property more than 30 days
past the due date thereof which could result in a lien on the Mortgaged
Property. As of the date the Mortgage is recorded in the public records of the
county in which the Mortgaged Property is located, there is no active "Notice of
Commencement" on record with respect to the Mortgaged Property.
 
(f) Permits. Mortgagor has obtained all federal, state and local permits,
licenses, approvals and authorizations from those federal agencies and any state
or local authority charged with the enforcement or regulation of environmental
and land use matters in connection with the Mortgaged Property. The Mortgaged
Property is currently in compliance with all building, safety, zoning and other
requirements of any state, municipal or other governmental authority pertaining
to the use and occupancy of the Mortgaged Property, and prior to commencement of
manufacturing in the Premises outside the existing production suite, the
Mortgaged Property will be in compliance with all building, safety, zoning and
other requirements of any state, municipal or other governmental authority
pertaining to the use and occupancy of the Mortgaged Property for its intended
purpose. If the Mortgaged Property includes wetlands or other areas subject to
the regulatory jurisdiction of any water management district or other regulatory
body having jurisdiction over wetlands, protected species of flora and fauna, or
inland waterways, then Mortgagor has received all necessary permits, licenses
and approvals of the applicable governmental authorities relating to such
matters as may be necessary to use and occupy the Mortgaged Property for its
intended purpose.
 
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(g) Rights of Access. The Mortgaged Property has adequate right of access to
public rights of way, directly or pursuant to insurable easements.
 
(h) Utilities. Prior to commencement of manufacturing on the Premises outside
the existing production suite, sewer, water, telephone, electricity and all
other necessary utilities will be physically available at the Mortgaged Property
in sufficient capacity to serve the Mortgaged Property for its intended use, and
the zoning, occupancy and land use classification(s) and designation(s) under
all laws, ordinances, rules and regulations will permit the use and occupancy of
the Mortgaged Property for its intended purpose, without the necessity of
obtaining further approvals, variances, waivers, consents or authorizations. All
easements, licenses or other interests in the property of others or any consent
of other land owners as required for drainage or other utilities or services
relating to the Mortgaged Property have been obtained.
 
(i) Litigation. There are no suits or proceedings pending or, to the knowledge
of Mortgagor, threatened against or affecting Mortgagor, the Mortgaged Property,
or involving the validity or enforceability of this Mortgage or involving any
risk of a judgment or a liability which, if unsatisfied, would have a material
adverse effect on the financial condition, business or properties of Mortgagor
or the validity or priority of the lien of this Mortgage.
 
(j) No conflict. The execution and delivery of this Mortgage does not conflict
with or result in the breach of any regulation, order, writ, injunction,
judgment or decree of any court or governmental authority or in the breach of or
default under any agreement or other instrument to which Mortgagor or Parent is
a party or by which it or its property is bound.
 
(k) Location. Mortgagor's principal place of business and executive office is
located at the address set forth in the introductory paragraph of this Mortgage.
Mortgagor shall notify the Collateral Agent at least 30 days prior to any change
in such location.
 
(l) Mortgaged Property. The building on the Mortgaged Property described in
Exhibit A attached hereto consists of not less than 31,500 square feet of space
and the Mortgaged Property described in Exhibit A attached hereto consists of
not less than 3.55 acres of land. All machinery and equipment that currently is
or will be affixed to the Premises or Improvements is or shall be owned by
Mortgagor.
 
(m)  Developer’s Agreement. No default exists under that certain Developer’s
Agreement, dated September 1, 1999, between the Township of East Windsor and
Simon Developments, LLC, that encumbers the Premises, and no event has occurred
which, with the passage of time or the giving of notice or both, would
constitute such a default.
 
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(n) Other Real Property. The Mortgagor does not own any real property other than
the real property included in the Mortgaged Property.
 
3. Insurance. The Mortgagor (i) will keep the Improvements and the Equipment
insured against loss or damage by fire, standard extended coverage perils and
such other hazards in amounts not less than 100% of the full insurable value of
the Improvements and the Equipment, excluding the costs of foundations,
excavations and footings below grade, and shall be sufficient to meet all
applicable co-insurance requirements, and (ii) will maintain business
interruption insurance and such other forms of insurance coverage with respect
to the Mortgaged Property as the Collateral Agent shall from time to time
reasonably require in amounts approved by the Collateral Agent but in no event
in all such instances greater than those coverages customarily required of other
comparable buildings in the Mercer County, New Jersey area by institutional
commercial lenders. All policies of insurance (the “Policies”) shall be issued
by insurers having a minimum policy holders rating of “A” per the latest rating
publication of Property and Casualty Insurers by A.M. Best Company and who are
lawfully doing business in New Jersey and are otherwise reasonably acceptable in
all respects to the Collateral Agent in its reasonable discretion. All Policies
shall contain the standard New Jersey mortgagee non-contribution clause
endorsement or an equivalent endorsement satisfactory to the Collateral Agent
naming the Mortgagee, or the Collateral Agent on behalf of the Mortgagee, as the
person to which all payments made by the insurer thereunder shall be paid and
shall otherwise be in form and substance satisfactory in all respects to the
Collateral Agent. Blanket insurance policies shall not be acceptable for the
purposes of this paragraph unless otherwise approved to the contrary by the
Collateral Agent. The Mortgagor shall pay the premiums for the Policies as the
same become due and payable. At the request of the Collateral Agent, the
Mortgagor will deliver the Policies to the Collateral Agent. Not later than ten
(10) business days prior to the expiration date of each of the Policies, the
Mortgagor will deliver to the Collateral Agent a renewal policy or policies
accompanied by evidence of payment of premiums billed reasonably satisfactory to
the Collateral Agent. If at any time the Collateral Agent is not in receipt of
written evidence that all insurance required hereunder is in force and effect,
the Collateral Agent shall have the right upon three (3) business days notice to
the Mortgagor to take such action as the Collateral Agent deems necessary to
protect its interest in the Mortgaged Property, including, without limitation,
the obtaining of such insurance coverage as the Collateral Agent in its sole
discretion deems appropriate, and all expenses incurred by the Collateral Agent
in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by the Mortgagor to the Collateral Agent upon demand. The
Mortgagor shall at all times comply with and shall cause the Improvements and
Equipment and the use, occupancy, operation, maintenance, alteration, repair and
restoration thereof to comply with the terms, conditions, stipulations and
requirements of the Policies.
 
If the Premises, or any portion of the Improvements, is located in a Federally
designated “special flood hazard area,” in addition to the other Policies
required under this paragraph, a flood insurance policy shall be delivered by
the Mortgagor to the Collateral Agent. The Mortgagor shall also maintain such
other property and liability insurance policies with respect to the Mortgaged
Property as are customary and prudent under the circum-stances, evidence of
which Collateral Agent at any time may require.
 
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If the Mortgaged Property shall be damaged or destroyed, in whole or in part, by
fire or other property hazard or casualty, the Mortgagor shall give prompt
notice thereof to the Collateral Agent. Sums paid to the Mortgagee or the
Collateral Agent by any insurer may be retained and applied by the Mortgagee (or
the Collateral Agent on behalf of the Mortgagee) toward payment of the Debt
whether or not then due and payable in such order, priority and proportions as
the Mortgagee (or the Collateral Agent on behalf of the Mortgagee) in its
discretion shall deem proper or, at the discretion of the Collateral Agent, the
same may be paid, either in whole or in part, to the Mortgagor for such purposes
as the Collateral Agent shall designate. If the Mortgagee (or the Collateral
Agent on behalf of the Mortgagee) shall receive and retain such insurance
proceeds, the lien of this Mortgage shall be reduced only by the amount thereof
received and retained by the Mortgagee and actually applied by the Mortgagee in
reduction of the Debt.
 
The Mortgagor shall also maintain commercial general liability insurance with
respect to the Premises and the Improvements, on an “occurrence” basis and in
such amounts and containing such coverage as shall be reasonably required by the
Collateral Agent (so long as such amounts and coverage do not exceed what is
customarily required of owners of other comparable buildings in the Mercer
County, New Jersey area by institutional commercial lenders). The Mortgagee
shall be named as an additional insured on such commercial general liability
policy.
 
4. Covenants.
 
(a) Payment of Taxes, Etc. Mortgagor shall pay all taxes, assessments, water
rates, sewer rents, ground rents, maintenance charges and other charges,
including without limita-tion, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter levied
or assessed or imposed against the Mortgaged Property or any part thereof (the
"Taxes") as same become due and payable. Mortgagor will deliver to Collateral
Agent, upon request, evidence satisfactory to Collateral Agent that the Taxes
are not delinquent. Mortgagor shall not suffer and shall promptly cause to be
paid and discharged, any lien or charge whatsoever which may be or become a lien
or charge against the Mortgaged Property, and shall promptly pay for all utility
services provided to the Mortgaged Property. Mortgagor shall furnish to
Collateral Agent receipts for the payment of the Taxes prior to the date the
same shall become delinquent.
 
(b) Corporate Existence, Etc. The Mortgagor will preserve and keep in force and
effect its corporate existence and will cause each subsidiary and its Parent to
preserve and keep in force and effect its corporate, partnership or other
existence, except in each such case in the event of a merger as expressly
permitted herein, in accordance with the respective organizational documents of
each such subsidiary and Parent, and the rights and franchises of the Mortgagor
and its subsidiaries and Parent.
 
(c) Rights of the Mortgagee. The Mortgagor will not, at any time, by any
amendment of the Mortgagor’s corporate charter or by-laws, or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue or
sale of securities or any other action, seek to avoid the observance or
performance hereof or under any of the other Loan Documents, but will at all
times take such actions as are necessary or appropriate in order to protect the
rights of the Mortgagee hereunder and under the other Loan Documents.
 
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(d) Schedules. The Mortgagor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Mortgaged
Property and such other reports in connection with the Mortgaged Property as the
Collateral Agent may reasonably request, all in reasonable detail.
 
5. Escrow Fund. At any time after the occurrence of an Event of Default
hereunder, upon the request of the Collateral Agent, the Mortgagor shall pay to
the Collateral Agent on the first day of each calendar month (a) one twelfth of
an amount which would be sufficient to pay the Taxes imposed against the
Mortgaged Property or any part thereof payable, or estimated by Collateral Agent
to be payable, during the next ensuing twelve (12) months and (b) one-twelfth of
an amount which would be sufficient to pay the premiums due for the renewal of
the coverage afforded by the Policies upon the expiration thereof (said amounts
in (a) and (b) above hereinafter called the “Escrow Fund”). Mortgagor hereby
pledges to Mortgagee any and all monies now or hereafter deposited in the Escrow
Fund as additional security for the payment of the Debt. Collateral Agent will
apply the Escrow Fund to payments required to be made by Mortgagor pursuant to
the provisions of this Mortgage. If the amount of the Escrow Fund shall exceed
the amount due for the items described, Collateral Agent shall, in its
discretion, (1) return any excess to Mortgagor, (2) credit such excess against
the Debt in such priority and proportions as Collateral Agent in its discretion
shall deem proper, or (3) credit such excess against future payments to be made
to the Escrow Fund. If the Escrow Fund is not sufficient to pay the items set
forth in (a) and (b) above, Mortgagor shall promptly pay to Collateral Agent,
upon demand, an amount which Collateral Agent shall estimate in good faith as
sufficient to make up the deficiency. The Escrow Fund shall not constitute a
trust fund, and until expended or applied as above provided, any amounts in the
Escrow Fund may be commingled with the general funds of the Collateral Agent and
shall constitute additional security for the Debt. No earnings or interest on
the Escrow Fund shall be payable to Mortgagor.
 
6. Condemnation. Mortgagor shall give Collateral Agent immediate notice of the
actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Collateral Agent copies of any and all papers
served in connection with such proceedings. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise, the
Mortgagor shall continue to pay the Debt at the time and in the manner provided
for its payment in the Notes and this Mortgage and the Debt shall not be reduced
until any award or payment therefor shall have been actually received and
applied by the Mortgagee to the discharge of the Debt. The Mortgagee may apply
the entire amount of any such award or payment to the discharge of the Debt
whether or not then due and payable in such order, priority and proportions as
the Mortgagee in its or his discretion shall deem proper. If the Mortgaged
Property is sold, through foreclosure or otherwise, prior to the receipt by the
Mortgagee of such award or payment, the Mortgagee shall have the right, whether
or not a deficiency judgment on the Note shall have been sought, recovered or
denied, to receive such award or payment, or a portion thereof sufficient to pay
the Debt, whichever is less. The Mortgagor shall file and prosecute its claim or
claims for any such award or payment in good faith and with due diligence and
cause the same to be collected and paid over to the Collateral Agent. The
Mortgagor hereby irrevocably authorizes and empowers the Collateral Agent, in
the name of the Mortgagor or otherwise, to collect and receipt for any such
award or payment and to file and prosecute such claim or claims. Although it is
hereby expressly agreed that the same shall not be necessary in any event, the
Mortgagor shall, upon demand of the Collateral Agent, make, execute and deliver
any and all assignments and other instruments sufficient for the purpose of
assigning any such award or payment to the Mortgagee, free and clear of any
encumbrances of any kind or nature whatsoever.
 
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7. Leases and Rents. Mortgagor represents that there are no leases or tenancies
with respect to the Mortgaged Property. Mortgagor has and hereby does assign to
Mortgagee the Rents and Leases and Collateral Agent, on behalf of Mortgagee,
shall have the right to enter the Mortgaged Property for the purposes of
enforcing its interests in the Leases and the Rents. Nevertheless, subject to
the terms of this paragraph 7, Collateral Agent waives the right to enter the
Mortgaged Property for the purpose of collecting the Rents, and grants Mortgagor
the right to collect the Rents. Mortgagor shall hold the Rents, or an amount
sufficient to discharge all current sums due on the Debt, in trust for use in
the payment of the Debt. The right of Mortgagor to collect the Rents may be
revoked by Collateral Agent, on behalf of Mortgagee, upon any Event of Default
(hereinafter defined). Upon or at any time after an Event or Default, Collateral
Agent, on behalf of Mortgagee, may, with or without entering upon and taking
possession of the Mortgaged Property, collect, retain and apply the Rents, less
costs of operation and collection (included but not limited to employment of
guard service and attorneys' fees), toward payment of the Debt in such priority
and proportions as Collateral Agent in its discretion shall deem proper.
Mortgagor shall furnish Collateral Agent with executed copies of all Leases. All
proposed Leases shall be subject to the prior approval of Collateral Agent.
Mortgagor shall submit to Collateral Agent all proposed Leases together with a
summary of the proposed business terms of such Lease, a description and
identification of the proposed tenant and such other information as Collateral
Agent may thereafter request concerning the proposed Lease and proposed tenant
thereunder. All Leases shall provide that they are subordinate to this Mortgage
and that the lessee attorns to Mortgagee. Mortgagor shall not, without the
consent of Collateral Agent, cancel, abridge or otherwise modify any Leases or
accept prepayments of installments of Rent under any Lease for a period of more
than one (1) month in advance or further assign the whole or any part of the
Leases or the Rents without the consent of Collateral Agent. In respect of any
Lease, Mortgagor will (a) fulfill or perform each and every provision thereof on
the lessor's part to be fulfilled or performed; (b) promptly send copies to
Collateral Agent of all notices of default which Mortgagor shall send or receive
thereunder, and (c) enforce all of the terms, covenants and conditions contained
in the Leases upon the lessee's part to be performed, short of termination
thereof. In addition to the rights which Collateral Agent, on behalf of
Mortgagee, may have herein, upon the occurrence of any Event of Default,
Collateral Agent, at its option, may require Mortgagor to pay monthly in advance
to Collateral Agent, on behalf of Mortgagee, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Mortgaged Property as may be in possession of
Mortgagor and may require Mortgagor to vacate and surrender possession of the
Mortgaged Property to Collateral Agent, or to such receiver and, in default
thereof, Mortgagor may be evicted by summary proceedings or otherwise. Nothing
contained in this paragraph shall be construed as imposing on the Mortgagee or
Collateral Agent any of the obligations of the lessor under the Leases.
 
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8. Maintenance of the Mortgaged Property. The Mortgagor shall cause the
Mortgaged Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Mortgaged Property, and
following validation or certification by the Food and Drug Administration
(“FDA”) the Mortgagor shall cause the Mortgaged Property to be maintained in
compliance with the Current Good Manufacturing Practice Regulations (“CGMP”) of
the FDA for drug manufacture and processing. The Improvements and the Equipment
shall not be removed, demolished or materially altered (except for normal
replacement of the Equipment in the ordinary course of business), without the
consent of the Collateral Agent. The Mortgagor shall promptly comply with all
existing and future governmental laws, orders, ordinances, rules and regulations
(including without limitation the FDA and CGMP) affecting the Mortgaged
Property, or any portion thereof or the use thereof. The Mortgagor shall
promptly repair, replace or rebuild any part of the Mortgaged Property which may
be damaged or destroyed by fire or other property hazard or casualty (including
any fire or other property hazard or casualty for which insurance was not
obtained or obtainable) or which may be affected by any taking by any public or
quasi-public authority through eminent domain or otherwise, and shall complete
and pay for, within a reasonable time, any structure at any time in the process
of construction or repair on the Premises. If such fire or other property hazard
or casualty shall be covered by the Policies, the Mortgagor's obligation to
repair, replace or rebuild such portion of the Mortgaged Property shall be
contingent upon the Mortgagee paying the Mortgagor the proceeds of the Policies,
or such portion thereof as shall be sufficient to complete such repair,
replacement or rebuilding, whichever is less. The Mortgagor will not, without
obtaining the prior consent of the Collateral Agent, initiate, join in or
consent to any private restrictive covenant, zoning ordinance, or other public
or private restrictions, limiting or affecting the uses which may be made of the
Mortgaged Property or any part thereof
 
9. Environmental Provisions.
 
(a) For the purposes of this Section the following terms shall have the
following meanings: (i) the term “Hazardous Material” shall mean any material or
substance that, whether by its nature or use, is 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, (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, and (iii) the
term “Governmental Authority” shall mean the Federal government, or any state or
other political subdivision, or any agency, court or body of the Federal
government, any state or other political subdivision, exercising executive,
legislative, judicial, regulatory or administrative functions.
 
(b) The Mortgagor hereby represents and warrants to the Mortgagee that (i) no
Hazardous Material regulated or otherwise defined by any Governmental Authority
is currently located at, on, in, under or about the Mortgaged Property which has
not been generated, stored, handled, processed, disposed of, or otherwise used,
by Mortgagor in compliance in all material respects with the Environmental
Requirements, (ii) 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 while the Mortgaged Property was owned by the Mortgagor or
is occurring in violation of any Environmental Requirement and to the
Mortgagor’s knowledge 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 at any other time, (iii) 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 the Mortgagor have knowledge or
reason to believe that any such notice will be received or is being threatened,
and (iv) the Mortgaged Property and the operation thereof are and will be in
full compliance with all Environmental Requirements in all material respects.
 
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(c) The Mortgagor shall comply, and shall cause all tenants or other occupants
of the Mortgaged Property to comply, in all material 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 the
Mortgagor, the Mortgagee or the Mortgaged Property of any liability or lien of
any nature whatsoever under any Environmental Requirement. The Mortgagor shall
notify the Collateral Agent 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 the Collateral Agent copies
of any notices received by the 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 the
Mortgagee, the Mortgagor or the Mortgaged Property relating to any Environmental
Requirement. If at any time it is determined that the operation or use of the
Mortgaged Property is in violation of any applicable Environmental Requirement
or that there are Hazardous Materials located at, in, on, under or about the
Mortgaged Property which 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, the Mortgagor shall, within thirty (30) days after receipt
of notice thereof from any Governmental Authority or from the Collateral Agent,
take, at the 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, the 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 the 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, the Collateral Agent, on the Mortgagee’s behalf, 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 the Collateral Agent (including, without
limitation, reasonable 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 the Mortgagor and shall bear interest at the Default
Rate from the date any such sums are so advanced or paid by the Collateral Agent
until the date any such sums are repaid by the Mortgagor to the Collateral
Agent. The Mortgagor will execute and deliver, promptly upon request, such
instruments as the Collateral Agent reasonably may deem useful or necessary to
permit the Collateral Agent to take any such action, and such additional notes
and mortgages, as the Collateral Agent may require to secure all sums so
advanced or paid by the Collateral Agent. 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 the Mortgagor or for which the
Mortgagor is responsible, resulting in the releasing, spilling, leaking,
leaching, pumping, emitting, pouring, emptying or dumping of any Hazardous
Material into the waters or onto land located within or without the state where
the Mortgaged Property is located, then the Mortgagor will, within thirty (30)
days from the date that the Mortgagor is first given notice that such lien has
been placed against the Mortgaged Property (or within such shorter period of
time as may be specified by the 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 the Collateral Agent and is sufficient to effect a complete
discharge of such lien on the Mortgaged Property.
 
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(e) The Collateral Agent may, at its option, at intervals of not less than one
year, or more frequently if the Collateral Agent reasonably believes that a
Hazardous Material or other environmental condition violates or threatens to
violate any Environmental Requirement, require Mortgagor to perform (at
Mortgagor's expense) an environmental audit and, if deemed necessary by
Collateral Agent, an environmental risk assessment, each of which must be
satisfactory to Collateral Agent, with regard to the Mortgaged Property or with
regard to the hazardous waste management practices and/or hazardous waste
disposal sites used by Mortgagor in connection with the Mortgaged Property.
Mortgagor shall cooperate in all reasonable ways with the Collateral Agent in
connection with any such audit. Such audit and/or risk assessment must be by an
environmental consultant satis-fac-tory to Collateral Agent. Should Mortgagor
fail to perform any such environmental audit or risk assessment within thirty
(30) days of the Collateral Agent’s written request, Collateral Agent shall have
the right but not the obligation to retain an environmental consultant to
perform any such environmental audit or risk assessment. All costs and expenses
incurred by Collateral Agent in the exercise of such rights shall be secured by
this Mortgage and shall be payable by Mortgagor upon demand or charged to
Mortgagor's loan balance at the discretion of Collateral Agent.
 
(f) If this Mortgage is foreclosed, or if the Mortgaged Property is sold
pursuant to the provisions of this Mortgage, or if the Mortgagor tenders a deed
or assignment in lieu of foreclosure or sale, the Mortgagor shall deliver the
Mortgaged Property to the purchaser at foreclosure or sale or to the 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) Except to the extent directly and solely caused by the gross negligence or
willful misconduct of the Mortgagee or Collateral Agent or their employees,
officers, directors, contractors, or authorized agents, the Mortgagor will
defend, indemnify, and hold harmless the Mortgagee and Collateral Agent and
their investors, participants, employees, agents, officers, and directors, from
and against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, reasonable counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, court costs, and
litigation expenses) arising out of, or in any way related to, (i) any breach by
the Mortgagor of any of the provisions of this Section 9, (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, (v) any violation of any Environmental Requirement by Mortgagor, or
(vi) any enforcement of this indemnification. 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
loan evidenced by the Notes and secured by this Mortgage, constitute the
personal recourse undertakings, obligations and liabilities of the Mortgagor.
 
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(h) The obligations and liabilities of the Mortgagor under this Section 9 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 Debt
has been paid in full and irrespective of any foreclosure of this Mortgage, sale
of the Mortgaged Property pursuant to the provisions of this Mortgage or
acceptance by the 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.
 
10. Estoppel Certificates. After request by Collateral Agent, Mortgagor, within
ten (10) days and at its expense, will furnish Collateral Agent with a
statement, duly acknowledged and certified, setting forth the amount of the
original principal amount of each of the Notes, the unpaid principal amount of
each of the Notes, the rate of interest of the Notes, the date installments of
interest and/or principal were last paid, any offsets or defenses to the payment
of the Debt, and that the Notes and this Mortgage are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification.
 
11. Transfer or Encumbrance of the Mortgaged Property. Except to the extent
permitted and in accordance with the terms of Section 7.2(c) of the Purchase
Agreement, no part of the Mortgaged Property nor any interest of any nature
whatsoever therein (whether record, beneficial, or otherwise) shall in any
manner be further encumbered, sold, transferred or conveyed, or permitted to be
further encumbered, sold, transferred, assigned or conveyed without the prior
consent of the Collateral Agent, which consent in any and all circumstances may
be withheld in the sole and absolute discretion of the Collateral Agent. The
provisions of the foregoing sentence of this paragraph shall apply to each and
every such further encumbrance, sale, transfer, assignment or conveyance,
regardless of whether or not the Collateral Agent has consented to, or waived by
its action or inaction its rights hereunder with respect to, any such previous
further encumbrance, sale, transfer, assignment or conveyance, and irrespective
of whether such further encumbrance, sale, transfer, assignment or conveyance is
voluntary, by reason of operation of law or is otherwise made. A sale, transfer
or conveyance within the meaning of this para-graph shall be deemed to include
(a) an installment sales agreement wherein Mortgagor agrees to sell the
Mortgaged Property or any part thereof for a price to be paid in installments,
and (b) an agreement by Mortgagor leasing all or a substantial part of the
Mortgaged Property or a sale, assignment or other transfer of, or the grant of a
security interest in, Mortgagor’s right, title and interest in and to any Leases
or any Rents;
 
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12. Notice. Any notice, request, demand, statement, authorization, approval or
consent made hereunder shall be in writing and shall be hand delivered or sent
by Federal Express, or other reputable courier service, or by postage pre-paid
registered or certified mail, return receipt requested, and shall be deemed
given (i) when received at the following addresses if hand delivered or sent by
Federal Express, or other reputable courier service, and (ii) three (3) business
days after being postmarked and addressed as follows if sent by registered or
postage pre-paid certified mail, return receipt requested:
 
If to the Mortgagor:

NexMed (U.S.A.), Inc.
89 Twin Rivers Drive
East Windsor, NJ 08520
Fax: (609) 426-0340
Attention: Chief Financial Officer

With a copy to:

Katten Muchin Rosenman LLP
575 Madison Avenue
New York, New York 10022
Fax: (212) 940-6557
Attention: Robert Kohl, Esq.

If to the Collateral Agent or if to Mortgagee:

c/o The Tail Wind Fund Ltd.
c/o Tail Wind Advisory and Management Ltd.
77 Long Acre
London WC2E 9LB UK
Facsimile: 44-207- 420 3819
Attn: David Crook

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With a copy to:

Peter J. Weisman, P.C.
153 East 53rd Street, 29th Floor
New York, NY 10022
Telephone: 212-433-1368
Facsimile: 212-433-1361

Each party to this Mortgage may designate a change of address by notice given,
as herein provided, to the other party ten (10) days prior to the date such
change of address is to become effective.
 
13. Sale of Mortgaged Property. If this Mortgage is foreclosed, the Mortgaged
Property, or any interest therein, may, at the discretion of the Collateral
Agent, on behalf of the Mortgagee, be sold in one or more parcels or in several
interests or portions and in any order or manner.
 
14. Changes in Laws Regarding Taxation. In the event of the passage after the
date of this Mortgage of any law which deducts from the value of real property
for the purpose of taxation any lien or encumbrance thereon or changing in any
way the laws for the taxation of mortgages or debts secured by mortgages for
state or local purposes or the manner of the collection of any such taxes, and
imposing a tax, either directly or indirectly, on this Mortgage, the Notes or
the Debt, the Mortgagor shall pay any tax imposed as a result of any such law
within the statutory period or within fifteen (15) days after demand by the
Collateral Agent, whichever is less.
 
15. No Credits on Account of the Debt. The Mortgagor will not claim or demand or
be entitled to any credit or credits on account of the Debt for any part of the
Taxes assessed against the Mortgaged Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Mortgaged Property, or any part thereof, by reason of this Mortgage or the Debt.
If at any time this Mortgage shall secure less than all of the principal amount
of the Debt, it is expressly agreed that any repayment of the principal amount
of the Debt shall not reduce the amount of the lien of this Mortgage until the
lien amount shall equal the principal amount of the Debt outstanding.
 
16. Documentary Stamps. If at any time the United States of America, any state
thereof, or any governmental subdivision of any such state, shall require
revenue or other stamps to be affixed to the Note or this Mortgage, the
Mortgagor will pay for the same, with interest and penalties thereon, if any.
 
17. Right of Entry. Upon reasonable prior notice, the Collateral Agent and its
agents shall have the right to enter and inspect the Mortgaged Property at all
reasonable times during normal business hours.
 
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18. Books and Records. The Mortgagor will keep and maintain or will cause to be
kept and maintained on a fiscal year basis in accordance with generally accepted
accounting practices consistently applied proper and accurate books, records and
accounts reflecting all of the financial affairs of the Mortgagor relating to
the Mortgaged Property and all items of income and expense in connection with
the operation of the Mortgaged Property or in connection with any services,
equipment or furnishings provided in connection with the operation of the
Mortgaged Property, whether such income or expense be realized by the Mortgagor
or by any other person whatsoever excepting lessees unrelated to and
unaffiliated with the Mortgagor who have leased from the Mortgagor portions of
the Mortgaged Property for the purpose of occupying the same. The Collateral
Agent shall have the right from time to time at all times during normal business
hours after reasonable prior notice to Mortgagor to examine such books, records
and accounts at the office of the Mortgagor or other person maintaining such
books, records and accounts and to make copies or extracts thereof as the
Collateral Agent shall desire; provided, however, that Mortgagor shall not
provide any material non-public information to the Collateral Agent unless the
Collateral Agent consents to same in advance and, if reasonably requested by
Mortgagor, enters into a reasonable confidentiality agreement with the
Mortgagor. The Mortgagor will furnish the Collateral Agent annually, within
ninety (90) days next following the end of each fiscal year of the Mortgagor, a
certificate signed by a duly authorized representative of the Mortgagor
certifying on the date thereof either that there does or does not exist an event
which constitutes, or which upon notice or lapse of time or both would
constitute, a default or an Event of Default under this Mortgage and if such
default or Event of Default exists, the nature thereof and the period of time it
has existed.
 
19. Performance of Other Agreements. The Mortgagor shall observe and perform
each and every term to be observed or performed by the Mortgagor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
 
20. Events of Default. The occurrence of any one or more of the following events
(herein collectively referred to as “Events of Default”) shall be an Event of
Default:
 
(a) if any portion of the Debt is not paid within three (3) days after notice by
the Collateral Agent or Mortgagee to the Mortgagor that the same is past due;
 
(b) if the Mortgagor shall fail to pay on or before the due date, any
installment of any assessment against the Mortgaged Property for local
improvements heretofore or hereafter laid, which assessment is or may become
payable in annual or periodic installments and is or may become a lien on the
Mortgaged Property;
 
(c) if any of the Taxes are not paid when same are due and payable;
 
(d) if without the consent of the Collateral Agent (which consent in any and all
circumstances may be withheld in the sole and absolute discretion of the
Collateral Agent) any part of the Mortgaged Property or any interest of any
nature whatsoever therein is in any manner, by operation of law or otherwise,
whether directly or indirectly, further encumbered, sold, transferred, assigned
or conveyed, and irrespective of whether any such further encumbrance, sale,
transfer, assignment or conveyance is voluntary, by reason or operation of law
or is otherwise made;
 
(e) if without the consent of the Collateral Agent any Improvement or the
Equipment (except for the normal ordinary course of business replacement of the
Equipment and the normal ordinary course of business removal of obsolete
Equipment) is removed, demolished or materially altered, or if the Mortgaged
Property is not kept in good condition and repair;
 
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(f) if the Mortgagor shall fail to comply with any requirement or order or
notice of violation of law or ordinance issued by any governmental department
claiming jurisdiction over the Mortgaged Property, which failure could
reasonably be expected to have a material adverse effect on the Mortgaged
Property, within three (3) months from the issuance thereof, or the time period
set forth therein, whichever is less;
 
(g) if the Policies are not kept in full force and effect, or if the Policies
are not delivered to the Mortgagee upon request;
 
(h) if the Mortgagor shall fail to pay Collateral Agent or any Mortgagee on
demand for all Premiums and/or Taxes paid by the Collateral Agent or Mortgagee
pursuant to this Mortgage, together with any late payment charge and interest
thereon calculated at the Default Rate;
 
(i) if without the consent of the Collateral Agent any Leases are made,
cancelled or modified or if any portion of the Rents is paid for a period of
more than one (1) month in advance or if any of the Rents are further assigned;
 
(j) if any representation or warranty of the Mortgagor or Parent herein, or in
any certificate, report, financial statement or other instrument furnished in
connection with the making of this Mortgage, shall prove false or misleading in
any material respect;
 
(k) if the Mortgagor or Parent shall make an assignment for the benefit of
creditors;
 
(l) if a court of competent jurisdiction enters a decree or order for relief
with respect to the Mortgagor or Parent under Title 11 of the United States Code
as now constituted or hereafter amended or under any other applicable Federal or
state bankruptcy law or other similar law, or if such court enters a decree or
order appointing a receiver, liquidator, assignee, trustee, sequestrator (or
similar official) of the Mortgagor or Parent, or of any substantial part of
their respective properties, or if such court decrees or orders the winding up
or liquidation of the affairs of the Mortgagor, Parent or any other guarantor;
 
(m) if the Mortgagor or Parent fails generally to pay its respective debts as
such debts become due;
 
(n) if the Mortgagor or Parent shall be in default under any mortgage or deed of
trust covering any part of the Mortgaged Property whether superior or inferior
in lien to this Mortgage, and including, without limitation, any such mortgage
or deed of trust now or hereafter held by the Mortgagee;
 
(o) if the Mortgaged Property shall become subject (i) to any tax lien, other
than a lien for local real estate taxes and assessments not due and payable, or
(ii) to any lis pendens, notice of pendency, stop order, notice of intention to
file mechanic's or materialman's lien, mechanic's or materialman's lien or other
lien of any nature whatsoever and the same shall not either be discharged of
record or in the alternative effectively subordinated and insured over to the
satisfaction of the Collateral Agent by a title company selected by Collateral
Agent that will insure the lien of this Mortgage (at Mortgagor’s expense) within
a period of thirty (30) days after the same is filed or recorded, and
irrespective of whether the same is superior or subordinate in right or other
priority to the lien of this Mortgage and irrespective of whether the same
constitutes a perfected or inchoate lien or encumbered on the Mortgaged Property
or is only a matter of record or notice;
 
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(p) if the Mortgagor or Parent shall continue to be in default or breach under
any of the other terms, covenants or conditions of this Mortgage, the Guaranty,
the Purchase Agreement, the Registration Rights Agreement or the Notes (as such
terms are defined in the Purchase Agreement), for thirty (30) days after notice
from the Collateral Agent; or
 
(q) If an “Event of Default” occurs under any of the Notes (as defined therein).
 
21. Remedies. Upon the happening of any one or more of said Events of Default,
the entire unpaid balance of the principal, and accrued interest, and all other
sums secured by this Mortgage shall at the option of Collateral Agent, on behalf
of the Mortgagee, become immediately due and payable without further notice or
demand, and in any such Event of Default, the Mortgagee or the Collateral Agent
on behalf of the Mortgagee, may forthwith undertake any one or more of the
following:
 
(a) Declare the debt to be immediately due and payable, and thereupon the same
shall become immediately due and payable;
 
(b) Recover judgment against Mortgagor for any debt; and neither the recovery of
judgment nor the levy of execution thereof on any property, including the
Premises, shall affect Mortgagee’s rights hereunder or the lien hereof;
 
(c) Enter upon and take possession of the Premises, or have a receiver appointed
(as more fully provided for in the following Section), without proof of
depreciation in the value of the Premises, inadequacy of the Premises, or
insolvency of Mortgagor; and Mortgagee or the receiver may lease the Premises,
in the name of Mortgagor, Collateral Agent, on behalf of the Mortgagee, or the
receiver, and may receive the rents issues and profits and apply the same:
 
(i)     To the payment of expenses of operating, maintaining, repairing and
improving the Premises, including renting commission and rental collection
commissions paid to an agent of Mortgagee or of the receiver; and/or
 
(ii)     On account of the Notes, in such order and in such amounts as
Collateral Agent, on behalf of the Mortgagee, or the receiver determines, but
while in possession of the Premises, Collateral Agent or the receiver shall be
liable to account only for the rents, issues and profits actually received;
and/or
 
(d) Take such other action to protect and enforce Mortgagee’s rights hereunder
and the lien hereof, as Mortgagee or Collateral Agent deems advisable, including
without limitation:
 
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(i)     The foreclosure hereof, subject, at Mortgagee’s option, and upon the
filing of a Complaint in Foreclosure, Mortgagee shall be entitled to the
appointment of a receiver of the rents of the Premises without the necessity of
either inadequacy of the security or insolvency of the Mortgagor or any person
who may be legally or equitably liable to pay money secured by this Mortgage,
and the Mortgagor and each person waive such proof and consent to the
appointment of such receiver; and in any proceeding to enforce any liability of
the debt, Mortgagor shall not assert as a defense that Mortgagee failed to
foreclosure any such rights or that any such rights adversely affected the value
of the Premises; and
 
(ii)     The sale of the Premises, in a foreclosure proceeding, and without
obligation to have the Premises marshaled.
 
22. Right to Cure Default. If default in the performance of any of the covenants
of the Mortgagor herein occurs, the Collateral Agent, on behalf of the
Mortgagee, may, at its discretion, remedy the same and for such purpose shall
have the right to enter upon the Mortgaged Property or any portion thereof
without thereby becoming liable to the Mortgagor or any person in possession
thereof holding under the Mortgagor. If Collateral Agent shall remedy such a
default or appear in, defend, or bring any action or proceeding to protect its
interest in the Mortgaged Property or to foreclose this Mortgage or collect the
Debt, the costs and expenses thereof (including reasonable attorneys' fees to
the extent permitted by law), with interest as provided in this paragraph, shall
be paid by the Mortgagor to the Collateral Agent upon demand. All such costs and
expenses incurred by the Collateral Agent in remedying such default or in
appearing in, defending, or bringing any such action or proceeding shall be paid
by the Mortgagor to the Collateral Agent upon demand, with interest (calculated
for the actual number of days elapsed between the incurrence thereof and
Mortgagor’s reimbursement thereof on the basis of a 360-day year) at a rate per
annum equal to 13% plus the rate of cash interest provided in the Notes (herein
referred to as the “Default Rate”), provided, however, that the Default Rate
shall in no event exceed the maximum interest rate which the Mortgagor may by
law pay, for the period after notice from the Collateral Agent that such costs
or expenses were incurred to the date of payment to the Collateral Agent. To the
extent any of the aforementioned costs or expenses paid by the Collateral Agent
after default by the Mortgagor shall constitute payment of (i) taxes, charges or
assessments which may be imposed by law upon the Mortgaged Property, (ii)
premiums on insurance policies covering the Mortgaged Property, (iii) expenses
incurred in upholding the lien of this Mortgage, including, but not limited to,
the costs and expenses of any litigation to collect the indebtedness secured by
this Mortgage or to prosecute, defend, protect or preserve the rights and the
lien created by this Mortgage, or (iv) any amount, cost or charge to which the
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 costs, expenses and amounts, together with interest thereon at the
Default Rate, shall be added to the indebtedness secured by this Mortgage and
shall be secured by this Mortgage.
 
23. Appointment of Receiver. The Collateral Agent, on behalf of the Mortgagee,
in any action to foreclose this Mortgage or upon the actual or threatened waste
to any part of the Mortgaged Property or upon the occurrence of any Event of
Default hereunder, shall be at liberty, without notice, to apply for the
appointment of a receiver of the Rents, and shall be entitled to the appointment
of such receiver as a matter of right, without regard to the value of the
Mortgaged Property as security for the Debt, or the solvency or insolvency of
any person then liable for the payment of the Debt.
 
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24. Non-Waiver. The failure of the Mortgagee or Collateral Agent to insist upon
strict performance of any term of this Mortgage shall not be deemed to be a
waiver of any term of this Mortgage. The Mortgagor shall not be relieved of the
Mortgagor's obligation to pay the Debt at the time and in the manner provided
for its payment in the Notes and this Mortgage by reason of (i) failure of the
Mortgagee or Collateral Agent to comply with any request of the Mortgagor to
take any action to foreclose this Mortgage or otherwise enforce any of the
provisions hereof or of the Notes or any other mortgage, instrument or document
evidencing, securing or guaranteeing payment of the Debt or any portion thereof,
(ii) the release, regardless of consideration, of the whole or any part of the
Mortgaged Property or any other security for the Debt, or (iii) any agreement or
stipulation between the Mortgagee or Collateral Agent and any subsequent owner
or owners of the Mortgaged Property or other person extending the time of
payment or otherwise modifying or supplementing the terms of the Notes, this
Mortgage or any other mortgage, instrument or document evidencing, securing or
guaranteeing payment of the Debt or any portion thereof, without first having
obtained the consent of the Mortgagor, and in the latter event, the Mortgagor
shall continue to be obligated to pay the Debt at the time and in the manner
provided in the Notes and this Mortgage, as so extended, modified and
supplemented, unless expressly released and discharged from such obligation by
the Mortgagee in writing. Regardless of consideration, and without the necessity
for any notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, the Mortgagee may
release any person at any time liable for the payment of the Debt or any portion
thereof or any part of the security held for the Debt and may extend the time of
payment or otherwise modify the terms of the Notes or this Mortgage, including,
without limitation, a modification of the interest rate payable on the principal
balance of the Notes, without in any manner impairing or affecting this Mortgage
or the lien thereof or the priority of this Mortgage, as so extended and
modified, as security for the Debt over any such subordinate lien, encumbrance,
right, title or interest. The Mortgagee may resort for the payment of the Debt
to any other security held by the Mortgagee in such order and manner as the
Mortgagee, in its discretion, may elect. The Mortgagee or the Collateral Agent
may take action to recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of the Mortgagee thereafter to
foreclose this Mortgage. The Mortgagee shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every additional
right and remedy now or hereafter afforded by law. The rights of the Mortgagee
under this Mortgage shall be separate, distinct and cumulative and none shall be
given effect to the exclusion of the others. No act of any Mortgagee or the
Collateral Agent shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision.
 
25. Liability. If the Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.
 
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26. Security Agreement. This Mortgage constitutes both a real property mortgage
and a “security agreement” within the meaning of the Uniform Commercial Code,
and the Mortgaged Property includes both real and personal property and all
other rights and interest, whether tangible or intangible in nature, of the
Mortgagor in the Mortgaged Property. If an Event of Default shall occur under
the Notes or this Mortgage, the Mortgagee and the Collateral Agent on behalf of
the Mortgagee, in addition to any other rights and remedies which it may have,
shall have and may exercise immediately and without demand, any and all rights
and remedies granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of the foregoing,
the right to take possession of the Mortgaged Property or any part thereof, and
to take such other measures as the Mortgagee or the Collateral Agent may deem
necessary for the care, protection and preservation of the Mortgaged Property.
Upon request or demand of the Collateral Agent, the Mortgagor shall at its
expense assemble the Mortgaged Property and make it available to the Collateral
Agent at a convenient place acceptable to the Collateral Agent. The Mortgagor
shall pay to the Collateral Agent on demand any and all expenses, including
reasonable legal expenses and attorneys' fees, incurred or paid by the
Collateral Agent in enforcing or exercising its rights hereunder with respect to
the Mortgaged Property. Any notice of sale, disposition or other intended action
by the Mortgagee or Collateral Agent with respect to the Mortgaged Property sent
to the Mortgagor in accordance with the provisions of this Mortgage at least
seven (7) days prior to the date of any such sale, disposition or other action,
shall constitute reasonable notice to the Mortgagor, and the method of sale or
disposition or other intended action set forth or specified in such notice shall
conclusively be deemed to be commercially reasonable within the meaning of the
Uniform Commercial Code unless objected to in writing by the Mortgagor within
five (5) days after receipt by the Mortgagor of such notice. The proceeds of any
sale or disposition of the Mortgaged Property, or any part thereof, may be
applied by the Mortgagee to the payment of the Debt in such order, priority and
proportions as the Mortgagee in its discretion shall deem proper. If any change
shall occur in the Mortgagor's name, the Mortgagor shall promptly cause to be
filed at its own expense, new financing statements as required under the Uniform
Commercial Code to replace those on file in favor of the Mortgagee or Collateral
Agent on behalf of Mortgagee.
 
27. Filings. (a) Mortgagor forthwith upon the execution and delivery of this
Mortgage and thereafter, from time to time, will cause this Mortgage, and any
security instru-ment creating a lien or security interest or evidencing the lien
hereof upon the Mortgaged Property and each instrument of further assurance to
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in, order to publish notice of and fully
protect and perfect the lien or security interest hereof upon, and the interest
of Mortgagee in, the Mortgaged Property. Upon such filings, the Mortgagee shall
have a perfected first priority security interest in the Mortgaged Property.
 
(b) The Mortgagor will pay all Federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property or any instrument
of further assurance. The Mortgagor shall hold harmless and indemnify the
Mortgagee, its successors and assigns, against any liability incurred by reason
of the imposition of any tax on the making and recording of this Mortgage.

28. Further Acts, etc. The Mortgagor will, at the cost of the Mortgagor, and
without expense to the Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances, including without limitation UCC-1
Financing Statements, as the Collateral Agent reasonably or any present or
future law shall, from time to time, require for the better assuring, conveying,
assigning, transferring protecting, preserving, perfecting and confirming unto
the Mortgagee the property and rights hereby mortgaged or intended now or
hereafter so to be, or which the Mortgagor may be or may hereafter become bound
to convey or assign to the Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage or for filing,
registering or recording this mortgage and, on demand, will execute and deliver
and hereby authorizes the Collateral Agent and Mortgagee to execute in the name
of the Mortgagor to the extent the Collateral Agent or Mortgagee may lawfully do
so, one or more financing statements, chattel mortgages or comparable security
instruments, to evidence more effectively the lien hereof upon the Mortgaged
Property.
 
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29. Headings. etc. The headings and captions of various paragraphs of this
Mortgage are for convenience of reference only and are not to be construed as
defined or limiting, in any way, the scope or intent of the provisions hereof.
 
30. Usury Laws. This Mortgage and the Notes are subject to the express condition
that at no time shall the Mortgagor be obligated or required to pay interest on
the principal balance due under the Notes at a rate which could subject the
holders of the Notes to either civil or criminal liability as a result of being
in excess of the maximum interest rate which the Mortgagor is permitted by law
to contract or agree to pay. If by the terms of this Mortgage, the Guaranty or
the Notes, the Mortgagor is at any time required or obligated to pay interest on
the principal balance due under the Notes at a rate in excess of such maximum
rate, the rate of interest under the Notes shall be deemed to be immediately
reduced to such maximum rate and the interest payable shall be computed at such
maximum rate and all prior interest payments in excess of such maximum rate
shall be applied and shall be deemed to have been payments in reduction of the
principal balance of the Notes.
 
31. Sole Discretion of Mortgagee/Collateral Agent. Except as may otherwise be
expressly provided to the contrary, wherever pursuant to the Notes, this
Mortgage, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan secured
hereby, the Mortgagee or the Collateral Agent exercises any right given to it or
him to consent or not consent, or to approve or disapprove, or any arrangement
or term is to be satisfactory to the Mortgagee or Collateral Agent, the decision
of the Mortgagee or Collateral Agent to consent or not consent, or to approve or
disapprove, or to decide that arrangements or terms are satisfactory or not
satisfactory, shall be in the sole and absolute discretion of the Mortgagee and
Collateral Agent and shall be final and conclusive, except as is otherwise
required by applicable law.
 
32. Recovery of Sums Required To Be Paid. The Mortgagee shall have the right
from time to time to take action to recover any sum or sums which constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of the
Mortgagee thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by the Mortgagor existing at the time such earlier action
was commenced.
 
33. Actions and Proceedings. The Collateral Agent shall have the right, at the
expense of Mortgagor, to appear in and defend any action or proceeding brought
with respect to the Mortgaged Property and to bring any action or proceeding, in
the name and on behalf of the Mortgagor, which the Collateral Agent, in its
reasonable discretion, determines should be brought to protect its interest in
the Mortgaged Property.
 
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34. Execution. This Mortgage may be executed in any number of duplicate
originals and each such duplicate original shall be deemed to constitute but one
and the same instrument. This Mortgage, once executed by the Mortgagor, may be
delivered by facsimile transmission, and a facsimile signature shall have the
same force and effect as an original signature, provided that an original shall
also be delivered to the Mortgagee.
 
35. 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; the word "Mortgagor"
shall mean "each Mortgagor and/or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein;" the word
"Mortgagee" shall mean “Mortgagee or any subsequent holder of any of the Notes”
and shall included each Mortgagee individually and collectively; the word
"Notes" shall mean "the Notes or any other evidence of indebtedness secured by
this Mortgage;" the word "person" shall include an individual, corpora-tion,
partnership, trust, unincorporated association, govern-ment, governmental
authority or other entity; the words "Mortgaged Property" shall include any
portion of the Mortgaged Property or interest therein; the word "Debt" shall
mean the principal balance of the Notes with interest thereon as provided in the
Notes and this Mortgage and all other sums due pursuant to the Notes, the
Guaranty and this Mortgage and secured by this Mortgage; and “Collateral Agent”
shall mean the initial Collateral Agent and any subsequent person appointed by
the Collateral Agent to act as Collateral Agent, provided such subsequent person
accepts such appointment and the Mortgagor is notified of such appointment.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
 
36. Waiver of Notice. The Mortgagor shall not be entitled to any notices of any
nature whatsoever from the Mortgagee or Collateral Agent except with respect to
matters for which this Mortgage specifically and expressly provides for the
giving of notice by the Mortgagee or Collateral Agent to the Mortgagor, and the
Mortgagor hereby expressly waives the right to receive any notice from the
Mortgagee or Collateral Agent with respect to any matter for which this Mortgage
does not specifically and expressly provide for the giving of notice by the
Mortgagee or Collateral Agent to the Mortgagor, except as is otherwise required
by applicable law.
 
37. No Verbal Change. This Mortgage may only be modified, amended or changed by
an agreement in writing signed by the Mortgagor and the Collateral Agent on
behalf of the Mortgagee, and may only be released, discharged or satisfied of
record by an agreement in writing signed by the Mortgagee or the Collateral
Agent on behalf of the Mortgagee. No waiver of any term, covenant or provision
of this Mortgage shall be effective unless given in writing by the Mortgagee or
the Collateral Agent on behalf of the Mortgagee and if so given by the Mortgagee
shall only be effective in the specific instance in which given. The Mortgagor
acknowledges that the Notes, this Mortgage, and the other documents and
instruments executed and delivered in connection therewith or otherwise in
connection with the loan secured hereby set forth the entire agreement and
understanding of the Mortgagor and the Mortgagee with respect to the loan
secured hereby and that no oral or other agreements, understanding,
representation or warranties exist with respect to the loan secured hereby other
than those set forth in the Notes, this Mortgage and such other executed and
delivered documents and instruments. In order for the Collateral Agent to act on
behalf of the Mortgagee under this Section, it must obtain the prior consent of
each person constituting Mortgagee.
 
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38. Absolute and Unconditional Obligation. The Mortgagor acknowledges that the
Mortgagor's and Parent’s obligation to pay the Debt in accordance with the
provisions of the Notes, the Guaranty and this Mortgage is and shall at all
times continue to be absolute and unconditional in all respects, and shall at
all times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to the Notes, the Guaranty or this Mortgage or the obligation of the
Mortgagor thereunder to pay the Debt or the obligations of any other person
relating to the Notes, the Guaranty or this Mortgage or the obligations of the
Mortgagor under the Notes, the Guaranty or this Mortgage or otherwise with
respect to the loan secured hereby, and the Mortgagor absolutely,
unconditionally and irrevocably waives any and all right to assert any defense,
offset, setoff, counterclaim (except mandatory counterclaims which must be
asserted to avoid being deemed to have been waived in any separate action) or
crossclaim of any nature whatsoever with respect to the obligation of the
Mortgagor to pay the Debt in accordance with the provisions of the Notes, the
Guaranty and this Mortgage or the obligations of any other person relating to
the Notes, the Guaranty or this Mortgage or obligations of the Mortgagor under
the Notes, the Guaranty or this Mortgage or otherwise with respect to the loan
secured hereby in any action or proceeding brought by the Mortgagee to collect
the Debt, or any portion thereof, or to enforce, foreclose and realize upon the
lien and security interest created by this Mortgage or any other document or
instrument securing repayment of the Debt, in whole or in part, and the
Mortgagor agrees that it shall not interpose or assert any such defense, offset,
setoff, counterclaim (except such mandatory counterclaims as described above) or
crossclaim in any action or proceeding.
 
39. Release. At such time as the amounts outstanding under the Notes and the
Debt are zero and no further amounts are due the Mortgagee hereunder (x) any
additional proceeds received by the Mortgagor on account of the sale of the
Mortgaged Property shall be retained by the Mortgagor and (y) the Mortgaged
Property shall be released from the lien created under this Mortgage and the
Mortgagee shall deliver to the Mortgagor, upon reasonable request therefor, and,
at the Mortgagor’s expense, releases and satisfactions (to be prepared by the
Mortgagor) of all financing statements related to such Mortgaged Property, and
this Mortgage shall terminate.
 
40. Disposition of Proceeds. The proceeds of any sale or disposition of all or
any part of the Mortgaged Property shall be applied by the Mortgagee in the
following order: (i) to the payment in full of the costs and expenses of such
sale or sales, collections, and the protection, declaration and enforcement of
the mortgage granted hereunder, and to the payment in full of all other
expenses, liabilities and advances made or incurred by the Mortgagee in
connection therewith, all amounts for which the Mortgagee is entitled to
indemnification hereunder, and all advances made by the Mortgagee hereunder for
the account of the Mortgagor, including the reasonable compensation of or
reimbursement of the Mortgagee’s agents and attorneys, including without
limitation the Collateral Agent; (ii) to the payment of the Debt for the benefit
of the holder thereof; and (iii) to the payment to the Mortgagor of any surplus
then remaining from such proceeds, subject to the rights of any permitted holder
of a lien on the Mortgaged Property of which the Mortgagee has received actual
written notice. In the event that the proceeds of any sale or other disposition
of the Mortgaged Property are insufficient to cover the principal of, and
premium, if any, and interest on, and expenses and fees with respect to, the
Debt secured thereby, plus costs and expenses of the sale or other disposition,
the Mortgagor shall remain liable for any deficiency.
 
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41. Expenses. The Mortgagor agrees that it shall pay all costs and expenses
hereafter incurred in amending, implementing, perfecting, collecting, defending,
declaring and enforcing and otherwise relating to the Mortgagee’s rights and
security interests in the Mortgaged Property hereunder or under the Notes or any
other instrument or agreement delivered in connection herewith or therewith,
including, but not limited to, searches and filings after the date hereof, and
the Mortgagee’s reasonable attorneys’ fees (regardless of whether any litigation
is commenced, whether default is declared hereunder, and regardless of tribunal
or jurisdiction); provided, however, that the Mortgagor shall not be responsible
for any costs and expenses (including attorneys fees) incurred by the Mortgagee
in connection with negotiating, execution and delivery of this Mortgage or any
other Loan Document, except as may be provided elsewhere herein or therein.
Further, the Mortgagor shall pay the costs of all title, UCC, judgment, lien and
similar searches in connection with this Mortgage and the other Loan Documents,
and shall pay all title insurance premiums on the Mortgaged Property in
connection with Mortgagee’s title insurance policy. The Mortgagor shall obtain
and deliver to the Collateral Agent an updated title survey of the Premises
within 30 days following the date hereof.
 
42. Waiver of Statutory Rights. The Mortgagor shall not and will not apply for
or avail itself of any appraisement, valuation, stay, extension or exemption
laws, or any so-called “Moratorium Laws,” now existing or hereafter enacted, in
order to prevent or hinder the enforcement or foreclosure of this Mortgage, but
hereby waives the benefit of such laws to the full extent that the Mortgagor may
do so under applicable law. The Mortgagor for itself and all who may claim
through or under it waives any and all right to have the property and estates
comprising the Mortgaged Property marshaled upon any foreclosure of the lien of
this Mortgage and agrees that any court having jurisdiction to foreclose such
lien may order the Mortgaged Property sold as an entirety. The Mortgagor hereby
waives for itself and all who may claim through or under it, and to the full
extent the Mortgagor may do so under applicable law, any and all rights of
redemption from sale under any order of decree of foreclosure of this Mortgage
or granted under any statute now existing or hereafter enacted.
 
43. Indemnity. Anything in this Mortgage or the other Loan Documents (as defined
below) to the contrary notwithstanding, the Mortgagor shall indemnify and hold
the Mortgagee and the Collateral Agent harmless and defend the Mortgagee and the
Collateral Agent at the Mortgagor's sole cost and expense against any loss or
liability, cost or expense (including, without limitation, reasonable attorneys'
fees and disbursements of the Mortgagee’s and the Collateral Agent’s counsel),
and all claims, actions, procedures and suits arising out of or in connection
with (i) any default by the Mortgagor or the Parent in connection with the
transaction contemplated hereby, the Debt, this Mortgage, the Guaranty, the
Purchase Agreement, the Registration Rights Agreement, any of the other document
or instrument now or hereafter executed and/or delivered in connection with the
Debt or the Purchase Agreement (the “Loan Documents”) and/or the Mortgaged
Property, including, but not limited to, all costs of reappraisal of the
Mortgaged Property or any part thereof after the date hereof, whether required
by law, regulation, the Mortgagee the Collateral Agent, or any governmental or
quasi-governmental authority, (ii) any amendment to, or restructuring of, the
Debt and this Mortgage, the Notes or any of the other Loan Documents, (iii) any
and all lawful action that may be taken by the Mortgagee or the Collateral Agent
in connection with the enforcement of the provisions of this Mortgage or the
Notes or any of the other Loan Documents, whether or not suit is filed in
connection with the same, or in connection with the Mortgagor or the Parent
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding, (iv) any violation of any Environmental
Requirements, any investigation or study with respect to Hazardous Materials or
Environmental Requirements, and any costs, fees or expenses related to any of
the foregoing, (v) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Mortgaged Property, and (vi)
any enforcement of this indemnification. All sums so expended by the Mortgagee
or Collateral Agent shall be payable on demand and, until reimbursed by the
Mortgagor pursuant hereto, shall be deemed additional principal of the Debt and
secured hereby and shall bear interest at the Default Rate. The obligations of
the Mortgagor under this paragraph shall, notwithstanding any exculpatory or
other provisions of any nature whatsoever set forth in the Loan Documents,
constitute the personal recourse undertakings, obligations and liabilities of
the Mortgagor.
 
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44. Enforceability. Matters of construction, validity and performance, this
Mortgage and the obligations arising hereunder shall be governed by, and
construed in accordance with, the laws of the State of New Jersey applicable to
contracts made and performed in such State and any applicable laws of the United
State of America. Whenever possible, each provision of this Mortgage shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Mortgage shall be unenforceable or prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such unenforceability, prohibition or invalidity, without invalidating the
remaining provisions of this Mortgage.
 
45. Marshalling and Other Matters. Mortgagor hereby waives, to the extent
permitted by law, the benefit of all appraise-ment, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Mortgaged Property or any
part thereof or any interest therein. Further, Mortgagor hereby expressly waives
any and all rights of redemp-tion from sale under any order or decree of
foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of each and
every person acquiring any interest in or title to the Mortgaged Property
subsequent to the date of this Mortgage and on behalf of all persons to the
extent permitted by applicable law.
 
46. Waiver of Jury Trial. Mortgagor hereby waives any right to trial by jury in
connection with any and all litigation involving the subject matter of this
Mortgage.
 
47. Receipt of Mortgage. Mortgagor hereby acknowledges receipt of a true copy of
this Mortgage without charge.
 
48. New Jersey Provisions. This Mortgage is subject to modification as provided
in N.J.S.A 46:9-8.1, and with respect to any such modification, the priority of
this Mortgage shall relate back to and remain as it was at the time of recording
of this Mortgage as if the modification was included herein or as if the
modification occurred at the time of the recording of this Mortgage.”
 

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IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the day and
year first above written.
 

       
NEXMED (U.S.A.), INC.
                   
By:
/s/ Vivian Liu
 
Name:
Vivian Liu
 
Title:
President and CEO

 

ACKNOWLEDGMENT
 

STATE OF New Jersey
)
 
) ss.:
COUNTY OF Mercer
)

 
On this 30th day of June, 2008, before me, the undersigned, personally appeared
Vivian Liu, the President and CEO of NEXMED (U.S.A.), INC., a Nevada
corporation, who, I am satisfied, is the person who signed the foregoing
instrument, and he did acknowledge under oath that he signed, sealed with the
corporate seal, and delivered the same in his capacity as such officer and that
the foregoing instrument is the voluntary act and deed of such corporation, made
by virtue of the authority of its board of directors.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
 

 
/s/ Gloria J. Lapsley
 
Notary Public
          (Notarial Seal) 

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EXHIBIT A

All the real property located in the Township of East Windsor, County of Mercer,
State of New Jersey and more particularly described as follows:

BEGINNING at a point situated along the southerly right of way line of Twin
Rivers Drive (66 feet wide), said point being located 25.00 feet from the
intersection of the westerly prolongation of the same and the northerly
prolongation of the easterly right of way line of Milford Road (66 feet wide);
thence running

1.
South 85° 22' 26" East along the southerly right of way line of Twin Rivers
Drive, 208.27 feet to a point; thence

2.
Easterly along the same, along a curve to the right having a radius of 967.00
feet and an arc length of 242.60 feet to a point; thence

3.
South 06° 55' 34" West along the common line of Lots 6 and 190 Block 20.06,
371.02 feet to a point; thence

4.
North 80° 46' 41" West along the common line of Lots 4 and 6 Block 20.06, 293.02
feet to a point; thence

 
5.
North 04° 37' 34" East along the common line of Lots 5 and 6 Block 20.06, 150.00
feet to a point; thence

6.
North 80° 46' 41" West along the same, 166.90 feet to a point; thence

7.
North 04° 37' 34" East along the easterly line of Milford Road, 189.14 feet to a
point; thence

8.
Easterly along the same, along a curve to the right having a radius of 25.00
feet and an arc length of 39.27 feet to the point and place of beginning.

NOTE:
BEING Lot 6, Block 20.06, Tax Map of the Township of East Windsor, Mercer
County, New Jersey,

BEING commonly known as 89 Twin Rivers Drive, East Windsor, New Jersey 08520,

BEING the same premises conveyed to the Mortgagor herein by deed dated October
17, 2000 and recorded on November 1, 2000 in the Mercer County Register’s Office
in Deed Book 3937, page 254.
 
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EXHIBIT B

All the real property located in the Township of East Windsor, County of Mercer,
State of New Jersey and more particularly described as follows:

BEGINNING at a point in the centerline of Milford Road, said point being distant
246.20 feet southwestwardly from the intersection of the said centerline of
Milford Road with the centerline of Twin Rivers Drive; thence running

1.
Along Lot 6, South 73 degrees 15 minutes East, a distance of 200.00 feet to a
point; thence

2.
Along same, South 12 degrees 00 minutes West, a distance of 150.00 feet to a
point in line with Lot 4; thence

3.
Along the northeasterly line of a portion of Lot 4, North 73 degrees 15 minutes
West, a distance of 200.00 feet to the point in the centerline of Milford Road;
thence

4.
Along the centerline of Milford Road, North 12 degrees 00 minutes East, a
distance of 150.00 feet to the point and place of Beginning.

The above description was drawn in accordance with a survey prepared by Crest
Engineering Associates, Inc., Daniel P. Hundley, P.L.S., dated February 8, 2002.

FOR INFORMATIONAL PURPOSES ONLY:

BEING ALSO KNOWN as Lot 5 in Block 20.06 on the Official Tax Map of the Township
of East Windsor, Mercer County, NJ,

BEING commonly known as 113 Milford Road, East Windsor, New Jersey 08520.
 
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