Exhibit
      10.4

     

    
      

      

    

    


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

    


    and

    


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

    


     

      
        

      

    

    


    


    MORTGAGE,
      SECURITY AGREEMENT AND

    ASSIGNMENT
      OF LEASES AND RENTS

     

    


    (Fee)

    


    
      
        

      

    

    


    
      	 	
              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.

    
 

    
      

      

    

    RECORD
      AND RETURN TO:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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”):

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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;

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (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.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (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;

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    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

    


    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    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.

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    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.”

     

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    


    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) 


    

    


    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    


    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.

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    


    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.

     

    
      
        
        

      

      
        -29-