<PAGE>

                                                                   Exhibit 10.24
                                                                    Danbury, CT



                  OPEN-END MORTGAGE DEED, SECURITY AGREEMENT

                      AND ASSIGNMENT OF LEASES AND RENTS

                                      by

                          HOLOGIC, INC., ("Borrower")

                              for the benefit of

                  TREX MEDICAL SYSTEMS CORPORATION ("Lender")

                              September 15, 2000
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                        ----
<S>                                                                                                     <C>
Article I DEFINITIONS...................................................................................   3
   1.1 Definitions......................................................................................   3
Article II CERTAIN ADDITIONAL DEFINITIONS; REPRESENTATIONS AND WARRANTIES...............................   6
   2.1 Authority to Enter into Transaction; No Conflict; Authority and Enforceability...................   7
   2.2 Borrower Not "Foreign Person"....................................................................   8
Article III BORROWER' S COVENANTS.......................................................................   8
   3.1 Payment and Performance by Borrower..............................................................   8
   3.2 Borrower's Compliance with Legal Requirements....................................................   8
   3.3 Borrower's Payment of Impositions................................................................   8
   3.4 Maintenance of First Lien Status of Mortgage: No Subordinate Mortgages or Other Liens Permitted..   8
   3.5 Borrower's Maintenance of Property in Good Repair; No Waste: Alterations and Additions...........   8
   3.6 Borrower's Maintenance of Insurance; Waiver of Subrogation.......................................   8
   3.7 Lender's Right to Inspect Mortgaged Property.....................................................  10
   3.8 Borrower's Provision of Financial Statements and Rent Rolls; Inspection of Books and Records.....  11
   3.9 Borrower's Payment for Labor and Materials.......................................................  12
   3.10 Further Assurances; Corrections; Recording of Loan Documents; Payment of Stamp Taxes............  12
   3.11 Borrower's Payment of Taxes on Mortgage.........................................................  12
   3.12 Borrower's Estoppel Certificate.................................................................  12
   3.13 Lender's Expenses and Attorneys' Fees; Default Rate Applicable to
   Unpaid Amounts.......................................................................................  12
   3.14 Borrower's Address..............................................................................  13
   3.15 Financial Covenants.............................................................................  13
   3.16 Improper Use of Mortgaged Property; Condominium or Cooperative..................................  13
   3.17 Replacement of Fixtures and Personalty..........................................................  13
   3.18 Change in Zoning; Grant of Easements; Use of Property; Tax Parcel...............................  13
   3.19 Borrower's Defense of Lender....................................................................  13
   3.20 No Transfers of Mortgaged Property or Interests in Borrower Permitted...........................  14
   3.21 Notice of Claims and Litigation.................................................................  14
   3.22 Intentionally Omitted...........................................................................  14
   3.23 Environmental Matters...........................................................................  14
Article IV LEASES.......................................................................................  17
   4.1 Borrower's License with Respect to Leases........................................................  17
   4.2 Authorization and Direction to Lessees...........................................................  17
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<S>                                                                                                       <C>
   4.3 Intentionally Omitted............................................................................  17
   4.4 Notification to Lessees; Security Deposits.......................................................  17
   4.5 Enforcement......................................................................................  17
   4.6 Anticipation of Rents............................................................................  17
   4.7 Lender's Approval Required for New Leases; Subordination of Leases...............................  18
   4.8 Execution, Cancellation or Modification of Leases................................................  18
   4.9 No Sublease or Assignment........................................................................  18
   4.10 Delivery of Leases: Further Acts and Assurances.................................................  18
Article V INSURANCE AND CONDEMNATION PROCEEDS...........................................................  18
   5.1 Notice of Damage or Destruction or Taking or Condemnation........................................  18
   5.2 Adjustment of Insurance Claims...................................................................  18
   5.3 Application of Insurance Proceeds................................................................  19
   5.4 Condemnation Proceeds Payable to Lender..........................................................  19
   5.5 Application of Condemnation Proceeds.............................................................  19
   5.6 Conditions Applicable if Restoration Permitted...................................................  20
Article VI SECURITY AGREEMENT...........................................................................  20
   6.1 Security Interest................................................................................  20
   6.2 Financing Statements.............................................................................  21
   6.3 Fixture Filing...................................................................................  21
Article VII EVENTS OF DEFAULT...........................................................................  21
   7.1 Payment Defaults.................................................................................  21
   7.2 Covenant Defaults................................................................................  21
   7.3 False Representations, Warranties and Statements.................................................  21
   7.4 Default Under Other Liens........................................................................  22
   7.5 Dissolution. The dissolution, termination, liquidation or merger of Borrower.....................  22
   7.6 No Further Encumbrances..........................................................................  22
   7.7 Transfer of Mortgaged Property or Beneficial Interest in Borrower................................  22
   7.8 Insolvency; Bankruptcy...........................................................................  22
   7.9 Insurance........................................................................................  22
   7.10 Other Loan Documents............................................................................  22
Article VIII REMEDIES...................................................................................  22
   8.1 Lender's Remedies Upon Default...................................................................  22
   8.2 Possession After Foreclosure.....................................................................  26
   8.3 Application of Foreclosure and Other Proceeds....................................................  26
   8.4 Miscellaneous Matters Relating to Exercise of Remedies...........................................  27
Article IX MISCELLANEOUS................................................................................  28
   9.1 Borrower's Right to Contest Certain Matters......................................................  28
   9.2 Intentionally Omitted............................................................................  29
   9.3 Notices..........................................................................................  29
   9.4 Covenants Running with the Land: Bind and Inure..................................................  30
   9.5 No Waiver: Severability..........................................................................  30
   9.6 Counterparts.....................................................................................  30
   9.7 Applicable Law: Service of Process...............................................................  30
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                                                       <C>
   9.8 Usury............................................................................................  31
   9.9 Change of Security...............................................................................  31
   9.10 Headings for Convenience Only...................................................................  31
   9.11 No Representation by Lender.....................................................................  31
   9.12 Lender's Right to Assign and Participate Interests..............................................  31
   9.13 Entire Agreement: Amendments in Writing.........................................................  31
   9.14 Waiver of Right to Trial by Jury................................................................  32
Article X SPECIAL STATE PROVISIONS......................................................................  32
   10.1 Mortgage Covenants..............................................................................  32
   10.2 Mortgage Condition..............................................................................  32
   10.3 Open-End Provision..............................................................................  32
</TABLE>

EXHIBITS
Exhibit A - Legal Description

Exhibit B - Permitted Exceptions

                                     -iii-
<PAGE>

Preamble:
--------

     Hologic, Inc., a Delaware corporation, having a mailing address of 35
Crosby Drive, Bedford, MA ("Borrower"), for consideration paid, does hereby
GRANT, BARGAIN, SELL, MORTGAGE, CONFIRM, WARRANT and CONVEY unto Trex Medical
Systems Corporation, having an address at 81 Wyman Street, P.O. Box 9046,
Waltham, MA 02254-9046 (the "Lender"), with MORTGAGE COVENANTS, to secure
payment of TWENTY-FIVE MILLION AND 00/100 DOLLARS ($25,000,000.00) (the "Loan"),
with interest thereon on such part thereof as shall from time to time remain
unpaid, and all other sums evidenced by or due under that certain Secured
Promissory Note of even date herewith from Borrower to Lender (together with any
and all renewals, modifications, rearrangements, reinstatements, enlargement, or
extensions of such note or of any promissory note or notes given in renewal,
modification, rearrangement, substitution or replacement therefor, the "Note")
or advanced under or secured by the Loan Documents (hereinafter defined), and
any other amounts, payments, or premiums payable under the Note, this Open-End
Mortgage, Security Agreement and Assignment of Leases and Rents (this
"Mortgage") or the other Loan Documents (the "Indebtedness"), all payable as
provided in the Note and in all other Loan Documents, the following
(collectively, the "Mortgaged Property"):

     The land located on 36 Apple Ridge Road, Danbury, Fairfield County,
Connecticut, as more particularly described in Exhibit A attached hereto,
                                               ---------
together with all right, title, interest and privileges of Borrower in and to
(i) streets, easements, rights-of-way, licenses, vehicle parking right and other
rights appurtenant to or used in connection with such real property or the
Improvements (hereinafter defined) including, without limitation, any drainage
ponds or other like drainage areas not located on the Land (hereinafter defined)
which may be required for water run-off and any easements necessary to obtain
access from the Land to such drainage areas, or to any other area to which
Borrower has a right to drain water or sewer; (ii) any strips or gores of real
property between such real property and abutting or adjacent properties; and
(iii) all water and water rights, mineral rights, timer and crops,
appurtenances, reversions and remainder in, to or relating to such real property
(collectively, the "Land"); and

     All buildings, open parking areas, structures and other improvements, and
any and all additions or appurtenances thereto, now or hereafter located on the
Land (the "Improvements"); and

     All materials, supplies, equipment, machinery, goods, systems, apparatus,
and other items now owned or hereafter acquired by Borrower and now or hereafter
attached to, installed in, or used in connection with the Improvements or the
Land, together with all appurtenances, replacements, betterments, and
substitutions for any of the foregoing and the proceeds thereof (collectively,
the "Fixtures"); and

     All of the right, title, and interest of Borrower in and to the following,
to the extent the same are necessary to the proper use and operation of the
Improvements: (i) furnishings, equipment and machinery which, if attached to the
Improvements, would be Fixtures; (ii) all

                                      -1-
<PAGE>

refundable fees, deposits or other funds or evidences of credit or indebtedness
deposited by or on behalf of Borrower with any governmental authority,
corporation or provider of utility services relating to the Mortgaged Property,
(iii) any awards, settlements, or compensation made by any Governmental
Authority relating to the Mortgaged Property, including those for any change of
grade in any streets and those for municipal utility district or other utility
costs incurred or deposits made in connection with the Land or the Improvements;
(iv) all refunds, rebates or credits in connection with a reduction in taxes
charged against the Mortgaged Property as a result of any applications or
proceedings for reduction or abatement; (v) unearned premiums on any insurance
required to be maintained by Borrower hereunder relating to the Mortgaged
Property; and (vi) all books of account and records relating to the operation of
Mortgaged Property whether or not stored, managed or contained on computer
software or hardware, together with all accessions, replacements, and
substitutions thereto or therefor and the products and/or proceeds thereof
(collectively, the "Personalty"); and

     All of the right, title, and interest of Borrower in, to, and under any and
all of the following, whether now or hereafter existing: (i) all contracts and
rights relating to the operation and maintenance, of the Mortgaged Property
(except Leases (hereinafter defined)), including but not limited to management
agreements, maintenance agreements and service contracts; and (ii) warranties
and guarantees relating to the Improvements (collectively, the "Contracts"); and

     Any and all leases, master leases, subleases, licenses, concessions, or
other agreements (written or oral, now or hereafter in effect), including any
renewals, extensions, amendments and supplements, which grant to third parties a
possessory interest in and to, or the right to use, all or any part of the
Mortgaged Property, together with all security and other deposits or payments
made in connection therewith (collectively, the "Leases"); and

      All of the rents, revenues, income, proceeds, profits, security and other
types of deposits (after Borrower acquires title thereto), and other benefits
paid or payable by parties to the Contracts and/or Leases other than Borrower,
for using, leasing, occupy licensing, possessing, operating from, or otherwise
enjoying all or any portion of the Mortgaged Property, whether due now or
hereafter, including, without limitation, any payments made by a lessee arising
out of the cancellation or termination of any Lease (collectively, the "Rents").

     TO HAVE AND TO HOLD the Mortgaged Property unto Lender, forever, subject,
however, to the matters described in Exhibit B hereto ("Permitted Exceptions"),
                                     ---------
and upon the terms and conditions of this Mortgage, with the Power of Sale and
right of entry as provided below, and Borrower does hereby bind itself, its
successors and assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged
Property unto Lender against every person whomever claiming the same or any part
thereof.

                                      -2-
<PAGE>

                                   Article I

                                  DEFINITIONS
                                  -----------

     1.1  Definitions. All capitalized terms not otherwise defined in the body
          -----------
of this Mortgage shall have the meanings set forth below:

     APA. That certain Asset Purchase and Sale Agreement dated August 13, 2000
     ---
between Borrower and Lender.

     Borrower: The individual or entity described as Borrower in the initial
     --------
paragraph of this Mortgage and any and all subsequent owners of the Mortgaged
Property (without implying Lender's consent to any Transfer of the Mortgaged
Property).

     Code: The Uniform Commercial Code, as amended from time to time, in effect
     ----
in the state in which the Mortgaged Property is located provided, however, that
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Lender's security interest in the
Mortgaged Property is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than that in which the Mortgaged Property is located, the
term "Code" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.

     Consolidated Tangible Net Worth: The excess of Consolidated Total Assets
     -------------------------------
over Consolidated Total Liabilities, and less the sum of:

          (a)  the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under generally accepted
accounting principles, including such items as lease acquisition costs, deferred
charges, goodwill, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the foregoing; plus
                                                                            ----

          (b)  all amounts representing any write-up in the book value of any
assets of the Borrower or its Subsidiaries resulting from a revaluation thereof
after September 25, 1999.

     Consolidated Total Assets: All assets of the Borrower and its Subsidiaries
     -------------------------
determined on a consolidated basis in accordance with generally accepted
accounting principles.

     Consolidated Total Liabilities: All liabilities of the Borrower and its
     ------------------------------
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.

     Contracts: As defined in the Preamble of this Mortgage.
     ---------

     Debtor Relief Laws: Title 11 of the United States Code or any other
     ------------------
applicable federal or state law, as now or hereafter in effect, relating to
bankruptcy, insolvency, liquidation,

                                      -3-
<PAGE>

receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.

     Default Rate: As defined in the Note.
     ------------

     Disposal: The actual or alleged presence, release, spill, transportation,
     --------
migration, generation, treatment, processing, storage use or disposal of
Hazardous Materials on, in, under, above or emanating from any portion of the
Mortgaged Property, whether intentional or unintentional, direct or indirect,
foreseeable or unforeseeable.

     Distribution: The declaration or payment of any dividend on or in respect
     ------------
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise (other than the repurchase or redemption of shares of
common stock of the Borrower or any Subsidiary whose employment or retention is
terminated by the Borrower or any such Subsidiary in an aggregate amount not to
exceed $100,000 during any fiscal year of the Borrower); the return of capital
by the Borrower to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of the Borrower.

     Environmental Claim: Any and all administrative, regulatory or judicial
     -------------------
actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violation, investigations, proceedings, consent orders or consent
agreements (collectively, "Claims") relating in any way to (a) the actual,
                           -------
threatened or alleged presence or release of Hazardous Materials on, in, under
or at the Mortgaged Property or (b) any Environmental Law, including without
limitation (i) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (ii) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from any release or threatened
release of Hazardous Materials or arising from alleged injury or threat of
injury or damage to health, safety or the environment.

     Environmental Laws: As defined in Article II of this Mortgage.
     ------------------                ----------

     Event of Default: As defined in Article VII of this Mortgage.
     ----------------                -----------

     Fixtures: As defined in the Preamble of this Mortgage.
     --------

     Generally Accepted Accounting Principles or generally accepted accounting
     -------------------------------------------------------------------------
principles: Principles that are consistent with the principles promulgated or
----------
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the Borrower's fiscal year ended on September 25, 1999.

     Governmental Authority. Any board, agency, commission or department of any
     ----------------------
federal, state or municipal government having jurisdiction over the Mortgaged
Property.

                                      -4-
<PAGE>

     Hazardous Materials: As defined in Article II of this Mortgage.
     -------------------                ----------

     Impositions: (i) All real estate and personal property taxes, charges,
     -----------
assessments, and levies and any interest, costs, or penalties with respect
thereto, of any kind and nature whatsoever which at any time may be assessed,
levied, or imposed upon the Mortgaged Property or the ownership, use, occupancy,
or enjoyment thereof; (ii) any sums payable for or under any easement, license,
or agreement maintained for the benefit of the Mortgaged Property; (iii) utility
charges and fees relating to the Mortgaged Property; and (iv) assessments and
charges arising under any subdivision, condominium, planned unit development, or
other declarations, restrictions, regimes, or agreements affecting the Mortgaged
Property.

     Improvements: As defined in the Preamble of this Mortgage.
     ------------

     Indebtedness: As defined in the Preamble of this Mortgage.
     ------------

     Indemnified Matters: All obligations (including removal and remedial
     -------------------
actions), losses, claims, suits, judgments, liabilities, penalties, damages
(including punitive damages and consequential damages), costs and expenses
(including attorneys', consultants', and contractors' fees and expenses) of any
kind or nature whatsoever that may at any time be incurred by, imposed on or
asserted against Borrower, the Mortgaged Property or any Indemnitee directly or
indirectly based on, or arising or resulting from, any Environmental Claim
relating in any way to (a) Borrower or the Mortgaged Property, or (b) the
exercise by the Lender of any of its rights under any of the provisions of the
Loan Documents, excluding, however, any matter to the extent Lender has provided
to Borrower an indemnity therefor under the APA.

     Indemnitee: Each of Lender and any and all subsequent holder(s) of the
     ----------
Note, plus with respect to each of the foregoing, any and all of their
respective subsidiaries, advisors, trustees, and the directors, officers,
agents, attorneys, employees, participants and successors and assigns of Lender,
all subsequent holder(s) of the Note, and their respective subsidiaries,
advisors and trustees.

     Land: As defined in the Preamble of this Mortgage.
     ----

     Legal Requirements: As defined in Article II of this Mortgage.
     ------------------                ----------

     Lender: The individual or entity described as Lender in the initial
     ------
paragraph of this Mortgage and/or their (its) affiliate(s), separate account(s),
nominee(s) or subsidiary(ies) and any investor, participant, co-lender or
assignee to whom the Loan, in whole or in part, may be sold.

     Lessees: The tenants and lessees under the Leases.
     -------

     Loan Documents: As defined in the Note.
     --------------

     Mortgaged Property: As defined in the Preamble of this Mortgage.
     ------------------

                                      -5-
<PAGE>

     Note: As defined in the Preamble of this Mortgage.
     ----

     Obligations: Any and all of the covenants, conditions, warranties,
     -----------
representation, and other obligations made or undertaken by Borrower or any
other person or party to the Loan Documents as set forth in the Loan Documents.

     Permits: As defined in Article II of this Mortgage.
     -------                ----------

     Permitted Exceptions: As defined in the Preamble of this Mortgage.
     --------------------

     Personalty: As defined in the Preamble of this Mortgage.
     ----------

     Rents: As defined in the Preamble of this Mortgage.
     -----

     Subordinate Mortgage: Any mortgage, deed of trust, pledge, lien, security
     --------------------
interest, encumbrance or charge, or conditional sale or other title retention
agreement, covering all or any portion of the Mortgaged Property, the lien of
which is subordinate and inferior to the lien of this Mortgage.

     Subsidiary: Any corporation, association, trust, or other business entity
     ----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding voting stock and the accounts of which are consolidated with the
Borrower in accordance with Generally Accepted Accounting Principles.

     Transfer: Any sale, lease, exchange, assignment, conveyance, transfer,
     --------
trade, or other transfer or disposition of all or any portion of the Mortgaged
Property (or any related real property interest therein) or any part of the
ownership interest in Borrower which constitutes a "Change of Control" as
defined in the Note, but excluding the following: (a) sales or transfers of
items of Personalty which have become obsolete or worn beyond practical use and
which have been replaced by adequate substitutes having a similar utility and a
value equal to or greater than the replaced items when new; and (b) Approved
Leases.

                                  Article II

                        CERTAIN ADDITIONAL DEFINITIONS;
                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

     The following capitalized terms not otherwise defined in the body of this
Mortgage shall have the meaning as set forth below:

     Environmental Laws: All federal, state or local laws, rules and regulations
     ------------------
(whether now existing or hereafter enacted or promulgated, as they may be
amended from time to time) pertaining to Hazardous Materials, environmental
regulations, contamination by hazardous wastes, clean-up of hazardous wastes or
disclosures relating to Hazardous Materials or

                                      -6-
<PAGE>

hazardous wastes, and any judicial or administrative interpretation thereof,
including any judicial or administrative orders or judgments including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601 et seq. ("CERCLA"); the Federal Resource
                                              ------
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. ("RCRA");
                                                                ----
Superfund Amendments and Reauthorization Act of 1986, Public Law No. 99-499
("SARA"); Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq. ("TSCA");
  ----                                                                   ----
and all state superlien or environmental clean-up or disclosure statutes in the
state in which the Mortgaged Property is located.

     Hazardous Materials: Any petroleum product and all hazardous or toxic
     -------------------
substances or wastes or any substances which because of their quantitative
concentration, chemical, radioactive, flammable, explosive, infectious or other
characteristics, constitute or may reasonably be expected to constitute or
contribute to a danger or hazard to public health, safety or welfare or to the
environment, including, without limitation, any asbestos (whether or not
friable) and any asbestos-containing materials, waste oils, solvents and
chlorinated oils, polychlorinated biphenyls (PCBs), toxic metals, etchants,
pickling and plating wastes, explosives, reactive metals and compounds,
pesticides, herbicides, radon gas, urea formaldehyde foam insulation and
chemical, biological and radioactive wastes, or any other similar materials or
any other hazardous or toxic wastes or substances which are included under or
regulated by any Environmental Laws.

     Legal Requirements: (a) All present and future laws, rules, regulations
     ------------------
and permits of any Governmental Authority applicable to the Mortgaged Property,
(b) all covenants, conditions, and restrictions contained in any deeds or other
instruments which relate to the Mortgaged Property, the failure of compliance
with which would materially adversely affect Lender's interest in, or the value
of, the Mortgaged Property, (c) all of Borrower's obligations under all Permits
affecting the Mortgaged Property and all conditions thereof binding upon the
Mortgaged Property.

     Permits: All permits, licenses, certificates and approvals issued by
     -------
Governmental Authorities or otherwise necessary for the Mortgaged Property to
comply with all Legal Requirements.

     Borrower represents, warrants, agrees and confirms that, as of the date
hereof, as follows:

     2.1  Authority to Enter into Transaction; No Conflict; Authority and
     ---------------------------------------------------------------
Enforceability. Borrower has the right to borrow from Lender all funds
--------------
evidenced by the Note, to encumber its interest in the Mortgaged Property, and
to execute and deliver the Loan Documents. The execution and delivery of the
Loan Documents will not conflict with or constitute a default under any
agreement or Legal Requirement binding upon Borrower. The execution, delivery
and performance of the Loan Documents have been duly authorized by all necessary
actions of Borrower, and the Loan Documents will be legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms.

                                      -7-
<PAGE>

     2.2  Borrower Not "Foreign Person". Borrower is not a "foreign person"
          -----------------------------
under the Foreign Investment in Real Property Tax Act 1980, or the regulations
promulgated pursuant to such Act or any amendment to such Act or regulations.

                                  Article III

                             BORROWER' S COVENANTS
                             ---------------------

     Borrower covenants and agrees with Lender as follows:

     3.1  Payment and Performance by Borrower. Borrower will pay the
          -----------------------------------
Indebtedness and perform and discharge the Obligations on or before the time for
performance specified in the Loan Documents.

     3.2  Borrower's Compliance with Legal Requirements. Subject to Section 9.1
          ---------------------------------------------
(Borrower's Right to Contest Certain Matters) Borrower will promptly and
faithfully comply with, conform to, and obey all Legal Requirements.

     3.3  Borrower's Payment of Impositions. Subject to Section 9.1 (Borrower's
          ---------------------------------
Right to Contest Certain Matters), Borrower will pay and discharge the
Impositions not later than thirty (30) days after the due date thereof, and
Borrower shall at Lender's request, deliver to Lender a written' receipt
evidencing the payment of each Imposition no later than ten (10) days prior to
the due date thereof.

     3.4  Maintenance of First Lien Status of Mortgage: No Subordinate Mortgages
          ----------------------------------------------------------------------
or Other Liens Permitted. Borrower will protect the first lien and security
------------------------
interest status of this Mortgage and the other Loan Documents and will not
permit to be created or to exist any Subordinate Mortgage or any other lien or
security interest on a parity with, superior to, or inferior to, any of the
liens or security interests of this Mortgage, except for the Permitted
Exceptions.

     3.5  Borrower's Maintenance of Property in Good Repair; No Waste:
          ------------------------------------------------------------
Alterations and Additions. Borrower will keep the Mortgaged Property in good
-------------------------
order and condition, reasonable wear and tear excepted, and will make all
repairs, replacements, alterations and additions which are reasonably necessary
to keep the Mortgaged Property in such order and condition. Borrower will
prevent any act, occurrence, or neglect which might materially impair the value
or usefulness of the Mortgaged Property for its intended use. Borrower will not
commit or permit any waste of the Mortgaged Property. All alterations or
additions shall be completed promptly in a good and workmanlike manner and in
compliance with all Legal Requirements and other obligations by which Borrower
or the Mortgaged Property is bound. No alterations or additions shall adversely
affect the value or utility of the Mortgaged Property.

     3.6  Borrower's Maintenance of Insurance; Waiver of Subrogation. Borrower
          ----------------------------------------------------------
will obtain and maintain the following insurance upon and relating to the
Mortgaged Property:

                                      -8-
<PAGE>

          (a)  owner's (and during any period of construction by a third party,
contractors') policy of comprehensive general public liability insurance
(including automobile coverage) on an occurrence basis, with a combined single
limit of not less than $1,000,000 and excess or umbrella liability of at least
$25,000,000, or such higher amount as Lender may reasonably require;

          (b)  fire and extended coverage insurance against all risks of loss,
including collapse, in an amount not less than the greater of (i) the
outstanding Loan amount or (ii) 100% of the full replacement cost of all
Improvements, including the cost of debris removal, with an agreed-amount
endorsement sufficient at all times to prevent Borrower from becoming a
coinsurer, with no deduction for depreciation;

          (c)  Intentionally Omitted;

          (d)  if the Mortgaged Property is now or hereafter becomes situated in
a "flood hazard area," and if required by Lender, a flood insurance policy;

          (e)  worker's compensation insurance for Borrower and any general
contractor or agent performing any construction work or other services on or
with respect to the Mortgaged Property, in the statutory limits;

          (f)  Intentionally Omitted;

          (g)  broad form boiler and machinery insurance (without exclusion for
explosion) covering all boilers or other pressure vessels, machinery and
equipment located in, on or about the Mortgaged Property and insurance against
loss of occupancy or use arising from any breakdown in such amounts as are
generally available at premiums as are generally required by institutional
lenders for properties similar to the Mortgaged Property;

          (h)  Intentionally Omitted; and

          (i)  such other insurance, if any, as Lender may reasonably require
from time to time.

     Lender acknowledges that the insurance may be provided under a blanket
insurance policy provided that Lender shall be satisfied that sufficient
coverage (as determined by Lender) is allocated under such policy to the
Mortgaged Property and that all requirements of this Section are satisfied by
such policy.

     Each insurance policy obtained by Borrower shall provide by way of
endorsements, riders or otherwise that: (a) with respect to liability insurance,
Lender shall be named as an additional insured; with respect to the other
insurance required hereunder (other than worker's compensation insurance), and
with respect to any business interruption, rental value or earthquake insurance
which Borrower may at its option, obtain, Lender shall be named under a standard
noncontributory mortgagee clause providing for such amounts to be payable to
Lender

                                      -9-
<PAGE>

as a mortgagee or loss payee and not as a coinsured; (b) the coverage of Lender
shall not be terminated, reduced, or affected in any manner regardless of any
breach or violation by Borrower of any warranties, declarations, or conditions
in such policy; (c) no such insurance policy shall be canceled, endorsed,
altered, or reissued to effect a change in coverage for any reason and to any
extent unless such insurer shall have first given Lender thirty (30) days' prior
written notice thereof; and (d) Lender may, but shall not be obligated to, make
premium payments to prevent any cancellation, endorsement, alteration, or
reissuance, and such payments shall be accepted by the insurer to prevent the
same; however, Lender shall not be liable for the failure to make such payment
or obtain such insurance, or for the amount, coverage or type of insurance
obtained, the form or legal sufficiency of any such insurance contract, or the
solvency of any such insurance company.

     Lender shall be furnished with the original of each initial policy (or
other evidence of insurance acceptable to Lender) simultaneously with the
execution of this Mortgage and the original of each renewal policy (or other
evidence of insurance acceptable to Lender) not less than thirty (30) days'
prior to the expiration of the initial policy or each immediately preceding
renewal policy. All insurance policies required under this Mortgage shall be
with a company or companies authorized to do business in the state in which the
Mortgaged Property is located with a claims paying ability rating of A:XII or
higher, according to the standards set by A.M. Best Company (or a similar rating
by an equivalent rating company satisfactory to Lender). Borrower shall promptly
provide to Lender copies of any and all notices of cancellation, non-renewal,
coverage changes, claims, and demands which Borrower receives from insurers of
the Mortgaged Property.

     If Borrower shall fail to obtain any insurance policy or policies required
by Lender, or shall fail to assign and deliver such policies to Lender, then
Lender may, but shall not be required to, obtain such insurance and pay the
premium or premiums therefor, in which event Borrower shall, on demand of
Lender, repay such premium or premiums to Lender and such repayment shall be
secured by the lien of this Mortgage. If Borrower fails to maintain the level
and coverages of insurance required under this Mortgage, then Borrower shall
indemnify Lender to the extent that a casualty occurs and insurance proceeds
would have been available had such insurance been maintained.

     Borrower waives any and all right to claim, recover, or obtain subrogation
against Lender or its officers, directors, employees, agents, attorneys, or
representatives for loss or damage to Borrower, the Mortgaged Property,
Borrower's property or the property of others under Borrower's control from any
cause insured against or required to be insured against by the provisions of the
Loan Documents.

     3.7  Lender's Right to Inspect Mortgaged Property. Borrower will permit
          --------------------------------------------
Lender, and its agents, upon reasonable advance notice to Borrower from time to
time, to enter on and to inspect the Mortgaged Property at reasonable times.

                                      -10-
<PAGE>

     3.8  Borrower's Provision of Financial Statements and Rent Rolls;
          ------------------------------------------------------------
Inspection of Books and Records. Borrower will maintain full and accurate books
-----------------
of account and other records reflecting the results of the operations of the
Mortgaged Property. Borrower will deliver to the Lender:

          (a)  as soon as practicable, but in any event not later than one
hundred ten (110) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such year, and the related consolidated statement of income and consolidated
statement of cash flow for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such consolidated statements to be
in reasonable detail, prepared in accordance with generally accepted accounting
principles (which reporting requirement may be satisfied, for so long as the
Borrower is subject to the reporting requirements of the Securities Exchange Act
of 1934, by the delivery of the Borrower's Annual Report on Form 10-K (or any
successor thereto)), and (unless such certification is included in such Form 10-
K) certified without qualification by the Borrower's independent certified
public accountants; and

          (b)  as soon as practicable, but in any event not later than sixty-
five (65) days after the end of each of the first three fiscal quarters of the
Borrower, copies of the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such quarter, and the related consolidated
statement of income and consolidated statement of cash flow for the portion of
the Borrower's fiscal year then elapsed, all in reasonable detail and prepared
in accordance with generally accepted accounting principles (which reporting
requirement may be satisfied, for so long as the Borrower is subject to the
reporting requirement of the Securities Exchange Act of 1934, by the delivery of
the Borrower's Quarterly Report on Form 10-Q (or any successor thereto))
together with a certification by the chief financial officer or the treasurer of
the Borrower that to the best of the Borrower's knowledge, the information
contained in such financial statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments).

          Each of the items required to be delivered pursuant to subparagraphs
(a) and (b) above shall be accompanied by a certification of Borrower executed
by its chief financial officer that the Borrower has not violated and is not in
violation of the provisions of Section 3.15 hereof, and shall include a
                               ------------
calculation demonstrating compliance with Section 3.15(b) hereof.

          Lender shall have the right, at reasonable times and upon reasonable
notice, to audit, examine, make and take away copies or extracts of Borrower's
books of account and records relating to the Mortgaged Property, all of which
shall be maintained and made available to Lender and Lender's representatives
for such purpose at the address specified herein for Borrower or at such other
location as Lender may approve, such approval not to be unreasonably withheld.

                                      -11-
<PAGE>

     3.9  Borrower's Payment for Labor and Materials. Subject to Section 9.1
          ------------------------------------------
(Borrower's Right to Contest Certain Matters) Borrower will promptly pay when
due all bills and costs for labor and materials incurred in connection with the
Mortgaged Property.

     3.10 Further Assurances; Corrections; Recording of Loan Documents; Payment
          ---------------------------------------------------------------------
of Stamp Taxes. From time to time, at the request of Lender, Borrower will (i)
--------------
promptly correct any defect, error, or omission which may be discovered in the
contents of any Loan Document or in the execution or acknowledgment thereof;
(ii) execute and deliver such further instruments and perform such further acts
and provide such further assurances as may be reasonably necessary, desirable,
or proper, in Lender's opinion, to carry out more effectively the purposes of
this Mortgage and the Loan Documents and to subject to the liens and security
interests of this Mortgage and the Loan Documents any property intended by the
terms hereof or thereof to be covered hereby or thereby, including without
limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Mortgaged Property; (iii) execute, acknowledge, deliver,
procure, file, and/or record the Loan Documents (as requested by Lender) and if
necessary, replacements thereof, and any other document or instrument deemed
advisable by Lender to protect the liens and the security interests herein
granted against the rights or interests of third persons; and (iv) pay all
documentary stamp taxes, fees and other costs connected with any of the
foregoing.

     3.11 Borrower's Payment of Taxes on Mortgage. If at any time any law shall
          ---------------------------------------
be enacted imposing or authorizing the imposition of any tax upon this Mortgage,
or upon any rights, titles, liens, or security interests created hereby, or upon
the Indebtedness or any part thereof, Borrower will immediately pay all such
taxes; provided, however, that if such law makes it unlawful for Borrower to pay
such tax, then (i) Borrower shall not pay nor be obligated to pay such tax, and
(ii) Borrower must prepay the Indebtedness in full within ninety (90) days after
demand therefor by Lender, and no prepayment penalty or premium shall be payable
thereon.

     3.12 Borrower's Estoppel Certificate. In the event of a proposed sale of
          -------------------------------
the Loan or an interest thereon by Lender, upon ten (10) days written request of
Lender, Borrower will furnish Lender a written certificate, in form reasonably
satisfactory to Lender, confirming the unpaid balance of the Indebtedness and
that there are no offsets or defenses against full payment of the Indebtedness
and the terms hereof, or if there are any such offsets or defenses, specifying
them and certifying that there does not exist an event which constitutes, or
which upon due notice or lapse of time or both would constitute, an Event of
Default, or if an Event of Default exists, specifying the nature thereof.

     3.13  Lender's Expenses and Attorneys' Fees; Default Rate Applicable to
          ------------------------------------------------------------------
Unpaid Amounts. Borrower will pay on demand all reasonable out-of-pocket costs
--------------
and expenses including, but not limited to, reasonable professional fees and
expenses including, without limitation, those of architects, engineers or
attorneys, paid or incurred by Lender in connection with the review of any
consent, approval or waiver requested by Borrower under any of the Loan
Documents, and any suit to which Lender is a party involving this Mortgage or
the Mortgaged

                                      -12-
<PAGE>

Property and those attorneys' fees and expenses incurred or incident to the
enforcement or collection of the Indebtedness or the exercise of any right or
remedy under any Loan Document. All such sums, and any other amounts required to
be reimbursed to Lender pursuant to this Mortgage shall be added to the
Indebtedness and shall bear interest from and after the date due at the Default
Rate.

     3.14 Borrower's Address. Borrower shall give written notice to Lender of
          ------------------
any change of address of Borrower at least ten (10) days prior to the effective
date of such change of address.

     3.15 Financial Covenants.
          -------------------

          (a)  Distribution. The Borrower will not declare or make any
               ------------
Distributions.

          (b)  Minimum Net Worth. The Borrower will not permit Consolidated
               -----------------
Tangible Net Worth to be, as at the end of any fiscal quarter, less than Sixty
Two Million Five Hundred Thousand ($62,500,000.00) Dollars.

     3.16 Improper Use of Mortgaged Property; Condominium or Cooperative.
          --------------------------------------------------------------
Borrower will not allow the use, maintenance, operation, or occupancy of the
Mortgaged Property in any manner which (i) violates any Legal Requirement, or
(ii) makes void, voidable, or cancelable any insurance then in force with
respect thereto. Borrower will not allow the Mortgaged Property to be subject to
a condominium or cooperative form of ownership and will not subdivide the
Mortgaged Property.

     3.17 Replacement of Fixtures and Personalty. Borrower will not, without the
          --------------------------------------
prior written consent of Lender, permit any material Fixture or Personalty to be
removed from the Land or Improvements unless the item is removed temporarily for
maintenance and repair or, if removed permanently, is replaced by an article of
equal utility and value and is owned by Borrower, free and clear of any lien or
security interest.

     3.18 Change in Zoning; Grant of Easements; Use of Property; Tax Parcel.
          -----------------------------------------------------------------
Borrower will not seek or acquiesce in a zoning reclassification of all or any
portion of the Mortgaged Property or grant or consent to any easement,
dedication, plat, or restriction affecting the Mortgaged Property, without
Lender's prior written consent, which will not be unreasonably withheld,
conditioned or delayed. The Mortgaged Property will at all times be operated as
it is currently operated or as is commercially reasonable for the conduct of
Borrower's business as currently conducted, and for no other purpose and
Borrower shall not take any action which would cause the Land to not be a
separate tax parcel, separate and apart from any other property owned by
Borrower or anyone else.

     3.19 Borrower's Defense of Lender. At its own cost and expense, Borrower
          ----------------------------
will defend with counsel approved by Lender, such approval not to be
unreasonably withheld, and will hold Lender harmless from, any action,
proceeding, or claim affecting the Mortgaged Property or the Loan Documents, and
all costs and expenses incurred by Lender in such an event

                                      -13-
<PAGE>

(including all court costs and fees of attorneys and experts) shall be borne by
Borrower, excluding, however, from the foregoing any action, proceeding or claim
to the extent Lender has provided to Borrower an indemnity therefor under the
APA.

     3.20 No Transfers of Mortgaged Property or Interests in Borrower Permitted.
          ---------------------------------------------------------------------
Without Lender's prior written consent, which Lender may withhold in its sole
discretion, Borrower will not make a Transfer, or allow, or enter into any
agreement to make or allow, a Transfer.

     3.21 Notice of Claims and Litigation. Borrower shall promptly (and in any
          -------------------------------
event within fifteen (15) days after Borrower's own receipt of notice) notify
Lender in writing of any pending or threatened suits, or proceedings at law or
in equity, or before or by any Governmental Authority, which (i) if adversely
determined would materially affect the financial condition of Borrower or the
Mortgaged Property or (ii) involve the validity or enforceability of the Loan
Documents or the priority of the lien of the Mortgage against the Mortgaged
Property. Borrower shall also notify Lender in writing as soon as it has
knowledge of any default with respect to any order, writ, injunction, decree or
demand of any Governmental Authority affecting Borrower or the Mortgaged
Property, where such default could materially affect or impair Borrower's
financial condition, or the Mortgage Property. Borrower covenants and warrants
that it shall promptly (and in any event within thirty (30) days after delivery
or receipt of communications regarding the same) notify Lender in writing of any
actual litigation affecting the Mortgaged Property involving claims in excess of
$100,000, any such litigation threatened in a writing received by Borrower
involving claims in excess of $100,000, and the existence of any mechanics'
liens.

     3.22 Intentionally Omitted
          ---------------------

     3.23 Environmental Matters. Borrower shall not allow any Hazardous
          ---------------------
Materials to exist or be stored, disposed of, located, discharged, generated,
managed, processed or otherwise handled on the Mortgaged Property other than
those Hazardous Materials which are customarily used by Borrower and other
tenants and occupants in the course of their business and then only in strict
compliance with all Environmental Laws affecting such materials and the
Mortgaged Property.

     Borrower shall immediately notify Lender in writing should it become aware
of (i) any release or threatened release of Hazardous Materials or the
occurrence of any other environmental concern or liability with respect to the
Mortgaged Property, or any real property adjoining or in the vicinity of the
Mortgaged Property which could materially affect the Mortgaged Property or
subject Borrower or the Mortgaged Property to a claim under any Environmental
Laws or to any restriction on ownership, occupancy, transferability or use of
the Mortgaged Property; (ii) any Environmental Claim; or (iii) any notice given
to Borrower from any tenant or other occupant of the Mortgaged Property or any
notice from any other person, entity or Governmental Authority with respect to
any release or presence or threatened release of Hazardous Materials at or
affecting the Mortgaged Property.

                                      -14-
<PAGE>

     In the event that any investigation, site monitoring, containment, clean-
up, removal, restoration or other remedial work of any kind or nature is
required under any applicable Environmental Law, excluding, however, any matter
to the extent Lender has provided to Borrower an indemnity therefor under the
APA (the "Remedial Work") because of, or in connection with, a current or future
violation of Environmental Laws or Disposal, Borrower shall, within thirty (30)
days after written demand for performance thereof by Lender (or such shorter
period of time as may be required under any applicable Environmental Law),
commence and thereafter diligently prosecute to completion, all such Remedial
Work in compliance with all applicable Environmental Laws. Borrower shall pay
the costs of all environmental audits and follow-up reports required by Lender
to evidence the completion of the Remedial Work in compliance with all
applicable Environmental Laws. All Remedial Work shall be performed by
contractors approved (which approval shall not be unreasonably withheld or
delayed) in advance by Lender, and under the supervision of a consulting
engineer approved (which approval shall not be unreasonably withheld or delayed)
by Lender. All costs and expenses of such Remedial Work shall be paid by
Borrower including, without limitation, Lender's reasonable attorneys' fees,
paralegal fees and costs incurred in connection with monitoring or review of
such Remedial Work. In the event Borrower shall fail to timely prosecute to
completion such Remedial Work and if such failure continues for thirty (30) days
after notice by Lender to Borrower (or such shorter period of time as may be
required by any applicable Environmental Law or by any notice from any
governmental authority having jurisdiction over the Mortgaged Property with
respect to any Environmental Law), Lender may, but shall not be required to,
cause such Remedial Work to be performed and all costs and expenses thereof, or
incurred in connection therewith, shall become part of the Indebtedness and be
secured by the lien of this Mortgage.

     Borrower covenants and agrees that Lender or Lender's agent may, but shall
not be obligated to, enter the Mortgaged Property to make reasonable inspections
and tests thereof related to the presence of Hazardous Materials or to determine
whether Hazardous Materials are present, at reasonable times upon reasonable
advance notice.

     Borrower covenants and agrees that if Lender retains counsel or consultants
for advice, representation, testing, analysis or remediation (i) in any way
relating to any Environmental Claim, excluding, however, any matter to the
extent Lender has provided to Borrower an indemnity therefor under the APA; or
(ii) to enforce Borrower's obligations under this Section 3.23, then all of the
reasonable fees, costs and expenses arising from such services and all related
expenses and costs, if any, shall be payable by Borrower to Lender within five
(5) days after demand of Lender. All such sums shall be added to the
Indebtedness and shall bear interest from and after the date due at the Default
Rate.

     Borrower shall defend (using counsel approved in writing by the Lender,
which approval will not be unreasonably withheld), indemnify and hold harmless
each Indemnitee from and against all Indemnified Matters regardless of when such
Indemnified Matters arise, but excluding (i) with respect to any Indemnitee, any
Indemnified Matter based solely on the gross negligence or willful misconduct of
such Indemnitee, and (ii) any such Indemnified Matter

                                      -15-
<PAGE>

relating solely to Hazardous Materials that are first placed on the Mortgaged
Property after Lender acquires title thereto or takes possession by foreclosure
or otherwise.

     Upon written request of Lender, at Lender's sole option, Borrower shall
undertake the defense of each Indemnitee, at Borrower's sole expense, with
counsel approved by Lender, which approval shall not be unreasonably withheld,
in connection with any obligation set forth herein for which Borrower has an
obligation to indemnify, defend, and hold harmless the Indemnitees.

     If Borrower either refuses or fails to promptly commence or to diligently
defend Lender and the other Indemnitees at Borrower's sole cost and expense with
counsel approved by Lender as aforesaid in accordance with Borrower's
obligations under this Mortgage, and Lender elects to undertake its own defense
and the defense of the other Indemnitees, the reasonable attorneys' fees and
related costs incurred by Lender in so doing shall be additional indemnification
duties subject to reimbursement by the Borrower hereunder and shall be part of
the Indebtedness and secured by this Mortgage. If Lender elects to undertake its
own defense as aforesaid, Borrower shall nevertheless have the right to
participate in such defense at Borrower's sole cost and expense.

     Lender shall not elect a settlement of any Environmental Claim that is
subject to the indemnification obligations of Borrower under this Mortgage
without the prior written consent of the Borrower, which consent shall not be
unreasonably withheld or delayed. Borrower shall not effect a settlement of any
Environmental Claim without the prior written consent of Lender, which consent
shall not be unreasonably withheld or delayed.

     Any defense undertaken by Borrower hereunder may be effected under a
reservation of rights without Borrower admitting that the Environmental Claim is
subject to the indemnification obligations of Borrower under this Agreement. In
the event it is determined that the matter being defended is not an
Environmental Claim subject to indemnification hereunder, the Borrower shall not
seek reimbursement from Lender or any Indemnitee of any defense costs
theretofore incurred except to the extent that in bad faith Lender required
Borrower to defend such Environmental Claim.

     Borrower agrees that the provisions of this Section shall survive the
payment of the Indebtedness and the satisfaction of the Obligations for a period
of one year if Lender never acquires title to the Mortgaged Property by
foreclosure or otherwise or takes possession thereof, and otherwise shall
survive for the maximum period of time permitted by law, and shall survive the
foreclosure of the Mortgaged Property by Lender or acquisition of title thereto
by other means for the maximum period of time permitted by law, provided that
Borrower shall not be responsible for any Indemnified Matter relating solely to
Hazardous Materials that are first placed on the Mortgaged Property after Lender
acquires title thereto by foreclosure or otherwise or takes possession thereof.

                                      -16-
<PAGE>

                                  Article IV

                                    LEASES
                                    ------

     4.1  Borrower's License with Respect to Leases. Lender hereby grants to
          -----------------------------------------
Borrower a license ("Borrower's License") under which, provided there exists no
Event of Default, Borrower may collect all of the Rents upon, but not prior to,
accrual.

     4.2  Authorization and Direction to Lessees. Borrower hereby consents to
          --------------------------------------
and irrevocably authorizes and directs the Lessees, upon notice from Lender
following an Event of Default of Lender's right to receive the Rents and demand
therefor, to pay the Rents to Lender. Written demand by Lender delivered to any
Lessee for payment of Rents by reason of the occurrence of any Event of Default
claimed by Lender shall be sufficient evidence of each such Lessee's obligation
and authority to make all future payments of Rents to Lender without the
necessity for further consent by the Borrower, notwithstanding any notice from
or claim by Borrower to the contrary. Borrower shall have no right or claim
against any Lessee for the payment of any Rents to Lender hereunder, and
Borrower hereby indemnifies and agrees to defend and hold harmless each Lessee
from and against all liability, loss, cost, damage or expense suffered or
incurred by such Lessee by reason of such Lessee's compliance with any demand
for payment of Rents made by Lender pursuant to this Section 4.2.
                                                     -----------

     4.3  Intentionally Omitted.

     4.4  Notification to Lessees; Security Deposits. From time to time, upon
          ------------------------------------------
request of Lender following an Event of Default, Borrower shall notify and
direct, in writing, each present or future Lessee that any security deposit or
other deposits heretofore delivered to Borrower have been assigned and delivered
to Lender. From and after the occurrence of an Event of Default, and upon the
written demand by Lender, Borrower shall pay to Lender any and all security
deposits for which the lessor under the Leases shall be liable to Lessees. Upon,
but only to the extent of, receipt by Lender of such security deposits, Lender
shall be responsible for and liable to such Lessees with respect to such
security deposits.

     4.5  Enforcement. Borrower shall appear in and defend any action or
          -----------
proceeding arising under, occurring out of or in any manner connected with the
Leases or the obligations, duties or liabilities of the Borrower and any Lessee,
and upon Lender's request, Borrower will do so in the name and on behalf of the
Lender, but at Borrower's expense. Borrower shall pay all costs and expenses of
Lender, including reasonable attorneys' fees and disbursements, in any action or
proceeding in which the Lender may appear.

     4.6  Anticipation of Rents. Borrower shall neither receive nor collect any
          ---------------------
Rents whether in cash or by evidence of indebtedness from any present or future
Lessee more than one (1) month in advance of the date on which such Rents are
due (except for last months' rent and security deposits); nor in any way
transfer, encumber or assign future payments of Rents.

                                      -17-
<PAGE>

     4.7  Lender's Approval Required for New Leases; Subordination of Leases.
          ------------------------------------------------------------------
Borrower shall not enter into any Leases after the date hereof without Lender's
prior written consent, which shall not be unreasonably withheld. At Lender's
request Borrower shall obtain and deliver to Lender a subordination, non-
disturbance and attornment agreement ("SNDA") in form reasonably satisfactory to
Lender from each tenant under a Lease executed during term of the Loan, it being
agreed, however, that, notwithstanding anything to the contrary contained
herein, in no event shall Lender be obligated to grant an SNDA to any particular
Lessee or agree to recognize any particular Lease. Lender may, in its sole
discretion, waive the requirement of a subordination, non-disturbance and
attornment agreement for any particular tenant. In addition, Lender may, at its
sole option, require that any or all Leases affecting the Mortgaged Property be
made superior and prior to the Mortgage.

     4.8  Execution, Cancellation or Modification of Leases. Without Lender's
          -------------------------------------------------
prior written consent, which shall not be unreasonably withheld, Borrower shall
not: (a) cancel, terminate or consent to any surrender of any Lease; (b)
commence any action of ejectment or any summary proceedings for dispossession of
any Lessee; (c) exercise any right of recapture provided in any Lease; (d)
modify or in any way alter the terms of any Lease or grant any concession in
connection therewith; (e) renew or extend the term of any Lease unless an option
therefor was originally reserved by the Lessee, and then only for a fixed and
definite rental; (f) relocate any Lessee within the Mortgaged Property; or (g)
consent to any modification of the permitted uses under any Lease.

     4.9  No Sublease or Assignment. Borrower shall not consent to any
          -------------------------
subletting of the Mortgaged Property or any part thereof, nor to any assignment
of any Lease by any Lessee thereunder, nor to any assignment or further
subletting of any sublease, without obtaining in each instance the prior written
consent of Lender which shall not be unreasonably withheld.

     4.10 Delivery of Leases: Further Acts and Assurances. Borrower will deliver
          -----------------------------------------------
to the Lender a copy of all existing and future Leases when executed. Borrower
hereby covenants and agrees to make, execute and deliver to Lender, upon demand
and at any time or times, any and all assignments and other documents and
instruments which Lender may deem advisable to carry out the true purpose and
intent of this Assignment.

                                   Article V

                      INSURANCE AND CONDEMNATION PROCEEDS
                      -----------------------------------

     5.1  Notice of Damage or Destruction or Taking or Condemnation. Borrower
          ---------------------------------------------------------
will give Lender prompt notice of any damage to or destruction of the Mortgaged
Property or of any proposed or actual taking or condemnation of the Mortgaged
Property.

     5.2  Adjustment of Insurance Claims. In case of loss covered by policies of
          ------------------------------
insurance, Lender is hereby authorized, at Lender's option, either (i) to settle
and adjust any claim under such policies without the consent of Borrower, or
(ii) to allow Borrower to agree with the

                                      -18-
<PAGE>

insurance company or companies on the amount to be paid upon the loss; provided
that Borrower may adjust losses aggregating not in excess of $250,000 if such
adjustment is carried out in a competent and timely manner, and provided that in
any case Lender shall and is hereby irrevocably authorized by Borrower to
collect any such insurance proceeds; and the expenses incurred by Lender in the
adjustment and collection of insurance proceeds shall be part of the
Indebtedness and shall be reimbursed to Lender upon demand, and shall bear
interest at the Default Rate.

     5.3  Application of Insurance Proceeds. The proceeds of insurance resulting
          ---------------------------------
from any insured casualty shall, at the sole option of Lender, (i) be paid
directly to Lender for application to reduction of the principal indebtedness at
par or (ii) be applied to reimburse Borrower for the cost of restoration or
repair of the Mortgaged Property, as provided for in Section 5.6 (Conditions
                                                     -----------
Applicable if Restoration Permitted). Notwithstanding the foregoing, provided no
Event of Default exists hereunder, Lender shall allow the proceeds of insurance
to be applied as described in clause (ii) above if, within 90 days of the
casualty, Lender receives a written certification from an engineer satisfactory
to it that the cost of restoration or repair will be $1,000,000 or less. Any
such proceeds held by Lender may be commingled with the general funds of Lender,
shall not bear interest and shall constitute additional security for the payment
of the Loan. Any principal reduction at par from an early involuntary prepayment
as a result of an insurance settlement will be without prepayment penalty and
will cause a pro-rata reduction in debt service payments based upon the reduced
Loan balance, and the Interest Rate.

     5.4  Condemnation Proceeds Payable to Lender. Lender shall be entitled to
          ---------------------------------------
receive any and all sums which may be awarded and become payable to Borrower for
condemnation of the Mortgaged Property for public or quasi-public use, or by
virtue of private sale in lieu thereof, and any sums which may be awarded or
become payable to Borrower for damages caused by public works or construction on
or near the Mortgaged Property. All such sums are hereby assigned to Lender, and
Borrower shall, upon request of Lender, make, execute, acknowledge, and deliver
any and all additional assignments and documents as may be necessary from time
to time to enable Lender to collect any such sums. Lender shall not be, under
any circumstances, liable or responsible for failure to collect, or exercise
diligence in the collection of, any such sums.

     5.5  Application of Condemnation Proceeds. Any sums received by Lender as a
          ------------------------------------
result of condemnation shall be applied to the payment of the Indebtedness.
Notwithstanding the foregoing, provided no Event of Default exists hereunder,
Lender shall allow any sums received as a result of condemnation to be applied
to restoration or repair of the Mortgaged Property if, within 90 days of the
condemnation, Lender receives a written certification from an engineer
satisfactory to it that the cost of restoration or repair will be $150,000 or
less. Any such proceeds held by Lender may be commingled with the general funds
of Lender, shall not bear interest and shall constitute additional security for
the payment of the Loan. Any principal reduction at par from an early
involuntary prepayment as a result of the application of such condemnation
proceeds will be without any prepayment penalty and will cause a pro-rata

                                      -19-
<PAGE>

reduction in debt service payments based upon the reduced Loan balance, the
remaining amortization schedule and the Interest Rate.

     5.6  Conditions Applicable if Restoration Permitted. In the event that
          ----------------------------------------------
proceeds of insurance or a taking award shall be made available to Borrower for
the restoring, repairing, replacing or rebuilding ("Restoration") of the
Mortgaged Property, Borrower shall restore the same to be of substantially equal
value and of substantially the same character as prior to such damage or
destruction, all to be effected in accordance with applicable Legal Requirements
and plans and specifications approved in advance by Lender and conducted under
the supervision of an architect or engineer approved by Lender. At Lender's
option, the proceeds shall be held and released under escrow/construction
funding arrangements satisfactory to Lender.

     Further, such proceeds shall be disbursed from time to time upon Lender
being furnished with (i) evidence satisfactory to it of the estimated cost of
completion of the Restoration, (ii) funds, (or, at Lender's option, evidence
satisfactory to Lender of the availability of such funds), which shall be
sufficient in addition to the proceeds of insurance to complete the proposed
Restoration, and (iii) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, bonds, plats of
survey and such other evidence of cost, payment and performance as Lender may
reasonably require and approve. No payment made prior to the final completion of
the Restoration shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than proceeds of insurance or, if
applicable, taking award, shall be disbursed prior to disbursement of such
proceeds; and at all times, the undisbursed balance of such proceeds remaining
in the hands of Lender, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Lender by or on behalf of Borrower
for that purpose, shall be at least sufficient in the reasonable judgment of
Lender to pay for the cost of completing the Restoration, free and clear of all
liens. Any surplus which may remain out of insurance or condemnation proceeds
held by Lender or an escrow agent after payment of such costs of Restoration,
shall be applied to the payment at par of the Indebtedness. Any principal
reduction from an early involuntary prepayment as a result of excess
condemnation or insurance proceeds shall be without any prepayment penalty and
will cause a pro rata reduction in debt service payments based upon the reduced
Loan balance and the Interest Rate.

                                  Article VI

                              SECURITY AGREEMENT
                              ------------------

     6.1  Security Interest. This Mortgage is a security agreement on personal
          -----------------
property within the meaning of the Code, and shall constitute a first and prior
security interest under the Code with respect to the Personalty, Fixtures,
Contracts, Permits, Leases and Rents. To this end, Borrower has GRANTED,
BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED and SET OVER, and does hereby GRANT,
BARGAIN, CONVEY, ASSIGN, TRANSFER and SET OVER, unto Lender, a first and prior
security interest, in all of Borrower's right, title and interest, in, to, under
and with respect to the Personalty, Fixtures, Contracts, Permits, Leases and

                                      -20-
<PAGE>

Rents to secure the payment of the Indebtedness and performance and discharge of
the Obligations.

     6.2  Financing Statements. Borrower hereby agrees with Lender to execute
          --------------------
and deliver to Lender, in form and substance satisfactory to Lender, such
financing statements and such further assurances as Lender may, from time to
time, reasonably consider necessary to create, perfect and preserve Lender's
security interest granted herein. Lender may cause such statements and
assurances to be recorded and filed, at such times and places as may be required
or permitted by law to so create, perfect and preserve such security interest,
and Borrower hereby grants to Lender an irrevocable power of attorney (coupled
with an interest) to exercise in Borrower's name and stead any such statements
and assurances.

     6.3  Fixture Filing. THIS MORTGAGE SHALL CONSTITUTE A "FIXTURE FILING" FOR
          --------------
THE PURPOSES OF THE CODE. Information concerning the security interest granted
herein may be obtained from the parties at the address of the parties set forth
herein. For purposes of the security interest granted herein, the address of
debtor (Borrower) and the address of the secured party (Lender) are set forth in
the first paragraph of this Mortgage.

                                  Article VII

                               EVENTS OF DEFAULT
                               -----------------

     The term "Event of Default," as used herein and in the Loan Documents,
shall mean the occurrence or happening, at any time and from time to time, of
any one or more of the following:

     7.1  Payment Defaults. Failure of the Borrower to pay any amount due under
          ----------------
the Note, this Mortgage or any of the other Loan Documents, in full, within five
(5) days of the due date of such payment in the case of any regularly scheduled
payments, and within 15 days after notice from Lender in the case of any other
payment.

     7.2  Covenant Defaults. Except as otherwise provided in this Article VII, a
          -----------------
default by Borrower in the due performance of any of its covenants or agreements
contained in any Loan Document if such default continues for more than 30 days
after notice thereof from Lender, provided that if such default cannot be cured
with the exercise of diligent efforts within such 30 days but is reasonably
susceptible of cure, such 30 day period shall be extended for a period of time
as shall be reasonably required for Borrower, in the exercise of diligent
efforts, to cure the default if the Borrower commences such efforts within 30
days after notice thereof from Lender and thereafter diligently pursues such
efforts.

     7.3  False Representations, Warranties and Statements. The making of a
          ------------------------------------------------
materially false or materially misleading representation, warranty, or statement
made by Borrower, or others in any Loan Documents, affidavit or other instrument
executed or delivered in connection with the Loan.

                                      -21-
<PAGE>

     7.4  Default Under Other Liens. If Borrower shall default under and
          -------------------------
pursuant to any other mortgage or security agreement which covers or affects any
part of the Mortgaged Property (without implying Lender's consent thereto), if
such default has not been cured at least five (5) days prior to the expiration
of any notice or cure period under such mortgage or security agreement.

     7.5  Dissolution. The dissolution, termination, liquidation or merger of
          -----------
Borrower.

     7.6  No Further Encumbrances. The creation or placement of any lien on the
          -----------------------
Mortgaged Property, which lien was not approved by Lender or permitted by the
Loan Documents and not removed or bonded off to Lender's reasonable satisfaction
within 30 days of the creation or placement of such lien.

     7.7  Transfer of Mortgaged Property or Beneficial Interest in Borrower. A
          -----------------------------------------------------------------
Transfer.

     7.8  Insolvency; Bankruptcy. The occurrence of any event of insolvency,
          ----------------------
bankruptcy or dissolution, whether voluntary or involuntary, of Borrower or any
guarantor of the Obligations, unless such proceeding is involuntary in which
case the affected party shall have sixty (60) days from the date of filing
during which to cause such proceedings to be permanently dismissed or
discharged.

     7.9  Insurance. The failure of Borrower to maintain required insurance.
          ---------

     7.10 Other Loan Documents. Any matter defined as an Event of Default under
          --------------------
the Note or any of the other Loan Documents.

                                 Article VIII

                                   REMEDIES
                                   --------

     8.1  Lender's Remedies Upon Default. Upon the occurrence of an Event of
          ------------------------------
Default Lender may, at Lender's option, by itself or otherwise, do any one or
more of the following (unless and to the extent Lender expressly waives the
Event of Default in writing):

          (a)  Right to Perform Borrower's Covenants. Lender may, but shall not
               -------------------------------------
be obligated to, perform or attempt to perform any of Borrower's covenants. Any
payment made or expense incurred in the performance or attempted performance of
any such covenant shall be and become a part of the Indebtedness, and Borrower
shall pay to Lender all sums so advanced or paid by Lender, with interest from
the date when paid or incurred by Lender at the Default Rate. No such payment or
performance by Lender shall constitute a waiver of any Event of Default. Lender
shall be subrogated to all rights, titles, liens, and security interests
securing the payment of any debt, claim, tax, or assessment for the payment of
which Lender may make an advance, or which Lender may pay.

                                      -22-
<PAGE>

          (b)  Right of Entry. Lender may enter upon the Mortgaged Property, and
               --------------
take exclusive possession of the Mortgaged Property and of all books, records,
and accounts relating thereto and exercise without interference from Borrower
any and all rights which Borrower has with respect to the Mortgaged Property.
Lender shall have the right to rent the Mortgaged Property for the account of
Borrower, for any term, including beyond the discharge or foreclosure of this
Mortgage, and to deduct from such Rents all costs, expenses, and liabilities
incurred by Lender in collecting such Rents and in managing, operating,
maintaining, protecting, or preserving the Mortgaged Property and apply the
remainder of such Rents to the Indebtedness in such manner as Lender may elect.
All such costs, expenses and liabilities incurred by Lender, if not paid out of
Rents, shall constitute a part of the Indebtedness and shall bear interest from
the date of expenditure until paid at the Default Rate. Lender shall not be
liable for any loss sustained by Borrower resulting from any failure to let the
Mortgaged Property, or from any other act or omission of the Lender in managing
the Mortgaged Property unless such loss is caused by the willful misconduct or
gross negligence of Lender, nor shall Lender be obligated to perform or
discharge any obligation, duty, or liability under any Lease by reason hereof or
the exercise of rights or remedies hereunder.

          If necessary to possess the Mortgaged Property, Lender may invoke any
legal remedies to dispossess Borrower, including actions for forcible entry and
detainer, trespass to try title and restitution.

          (c)  Right to Accelerate. Lender may, without notice, demand,
               -------------------
presentment, notice of nonpayment or nonperformance, protest, notice of protest,
notice of intent to accelerate, notice of acceleration, or any other notice or
any other action, all of which are hereby waived by Borrower and all other
parties obligated in any manner whatsoever on the Indebtedness, declare the
entire unpaid balance of the Indebtedness immediately due and payable.

          (d)  Lender's Judicial Remedies. Lender may proceed by suit or suits,
               --------------------------
at law or in equity, to enforce the payment of the Indebtedness and the
performance and discharge of the Obligations in accordance with the terms
hereof, of the Note, and the other Loan Documents, to foreclose the liens and
security interests of this Mortgage as against all or any part of the Mortgaged
Property, and to have all or any part of the Mortgaged Property sold under the
judgment or decree of a court of competent jurisdiction.

          (e)  Lender's Right to Appointment of Receiver. Lender shall be
               -----------------------------------------
entitled, without notice to Borrower, to the appointment of a receiver or
receivers of the Mortgaged Property and of the Rents, and Borrower hereby
irrevocably consents to the appointment of a receiver or receivers. Any receiver
appointed pursuant to the provisions of this subsection shall have the usual
powers and duties of receivers in such matters.

          (f)  Foreclosure -- Power of Sale. Lender may institute a proceeding
               ----------------------------
or proceedings, judicial or private, by advertisement or otherwise, for the
complete or partial foreclosure of this Mortgage or the complete or partial sale
of the Mortgaged Property under the power of sale contained herein or under any
applicable provision of law. Lender may sell the

                                      -23-
<PAGE>

Mortgaged Property, and all estate, right, title, interest, claim and demand of
Borrower therein, and all rights of redemption thereof, at one or more sales, as
an entirety or in parcels, with such elements of real and/or personal property,
and at such time and place and upon such terms as it may deem expedient, or as
may be required by applicable law, and in the event of a sale, by foreclosure or
otherwise, of less than all of the Mortgaged Property, this Mortgage shall
continue as a lien and security interest on the remaining portion of the
Mortgaged Property.

     Subject to the provisions or other requirements of law and except as
otherwise provided herein, the following provisions shall apply to any sale or
sales of all or any portion of the Mortgaged Property under or by virtue of this
Section 8.1(f), whether made under the power of sale herein granted or by virtue
--------------
of judicial proceedings or of a judgment or decree of foreclosure and sale:

          (i)   Lender may conduct any number of sales from time to time. The
power of sale set forth herein shall not be exhausted by any one or more such
sales as to any part of the Mortgaged Property which shall not have been sold,
nor by any sale which is not completed or is defective in Lender's opinion,
until the Indebtedness shall have been paid in full;

          (ii)  Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or adjourned
sale without further notice;

          (iii) After each sale, Lender or an officer of any court empowered to
do so shall execute and deliver to the purchaser or purchasers at such sale a
good and sufficient instrument or instruments granting, conveying, assigning and
transferring all right, title and interest of Borrower in and to the property
and rights sold and shall receive the proceeds of said sale or sales and apply
the same as herein provided. Effective upon an Event of Default, Lender is
hereby appointed the true and lawful attorney-in-fact of Borrower, which
appointment is irrevocable and coupled with an interest, to make all necessary
conveyances, assignments, transfers and deliveries of the property and rights so
sold, and for that purpose Lender may execute all necessary instruments of
conveyance, assignment, transfer and delivery, and may substitute one or more
persons with like power, Borrower hereby ratifying and confirming all that said
attorney or such substitute or substitutes shall lawfully do by virtue thereof;

          (iv)  Any purchaser of any property or rights sold shall not be bound
to see to the application of such purchase price or any part thereof upon or for
any trust or purpose of this Mortgage or, in any manner whatsoever, be
answerable for any loss, misapplication or non-application of any such purchase
money, or part thereof, or be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale;

          (v)   Any sale or sales shall operate to divest all of the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Borrower in and to the properties and rights so sold, and shall be a
perpetual bar both at law and in equity against Borrower and any and all persons
claiming or who may claim the same, or any part thereof or

                                      -24-
<PAGE>

any interest therein, by, through or under Borrower to the fullest extent
permitted by applicable law;

          (vi)  Upon any such sale or sales, Lender may bid for and acquire the
Mortgaged Property and, in lieu of paying cash therefor, may make settlement for
the purchase price by crediting against the Indebtedness the amount of the bid
made therefor, after deducting therefrom the expenses of the sale, the cost of
any enforcement proceeding hereunder, and any other sums which Lender is
authorized to deduct under the terms hereof, to the extent necessary to satisfy
such bid; and

          (vii) Upon any such sale, it shall not be necessary for Lender or any
public officer acting under execution or order of court to have present or
constructively in its possession any of the Mortgaged Property.

     (g)  Lender's Uniform Commercial Code Remedies. The Lender may exercise its
          -----------------------------------------
rights of enforcement with respect to Personalty, Fixtures, Contracts, Permits,
Leases and Rents under the Code, and in conjunction with, in addition to or in
substitution for the rights and remedies under the Code:

          (i)   Lender may, without demand or notice to Borrower, enter upon the
Mortgaged Property to take possession of, assemble, receive, and collect the
Personalty, or any part thereof;

          (ii)  Lender may require Borrower to assemble the Personalty and make
it available at a place the Lender designates which is mutually convenient to
allow the Lender to take possession or dispose of the Personalty;

          (iii) written notice mailed to Borrower as provided herein at least
ten (10) days prior to the date of public sale of the Personalty or prior to the
date after which private sale of the Personalty will be made shall constitute
reasonable notice;

          (iv)  any sale made pursuant to the provisions of this subsection
shall be deemed to have been a public sale conducted in a commercially
reasonable manner if held contemporaneously with the sale of all or a portion of
the Land and Improvements under power of sale as provided herein upon giving the
same notice with respect to the sale of the Personalty hereunder as is required
for such sale of all or a portion of the Land and Improvements under power of
sale, and such sale shall be deemed to be pursuant to a security agreement
covering both real and personal property under the Code;

          (v)   in the event of a foreclosure sale, whether made by Lender under
the terms hereof, or under judgment of a court, the Personalty and the other
Mortgaged Property may, at the option of the Lender, be sold as a whole;

          (vi)  it shall not be necessary that the Lender take possession of the
Personalty, or any part thereof, prior to the time that any sale pursuant to the
provisions of this

                                      -25-
<PAGE>

subsection is conducted, and it shall not be necessary that the Personalty or
any part thereof be present at the location of such sale;

          (vii)  after notification, if any, as hereafter provided in this
subsection, Lender may sell, lease, or otherwise dispose of the Personalty, or
any part thereof, in one or more parcels at public or private sale or sales, at
Lender's offices or elsewhere, for cash, on credit, or for future delivery.
Borrower shall be liable for all reasonable expenses of retaking, holding,
preparing for sale, or the like, and all reasonable attorneys' fees, legal
expenses, and all other costs and expenses incurred by Lender in connection with
the collection of the Indebtedness and the enforcement of Lender's rights under
the Loan Documents. Lender shall apply the proceeds of the sale of the
Personalty against the Indebtedness in accordance with the provisions of Section
                                                                         -------
8.3 (Application of Foreclosure and Other Proceeds). Borrower waives all rights
---
of marshalling in respect of the Personalty; and

          (viii) Lender may appoint or delegate any one or more persons as agent
to perform any act or acts necessary or incident to any sale held by Lender,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of Lender.

     (h)  Other Rights. Lender (i) may surrender the insurance policies
          ------------
maintained pursuant to Section 3.6 (Borrower's Maintenance of Insurance; Waiver
                               ---
of Subrogation), and upon receipt shall apply the unearned premiums as a credit
on the Indebtedness, in accordance with the provisions of Section 8.3
                                                          -----------
(Application of Foreclosure and Other Proceeds), and, in connection therewith,
Borrower hereby irrevocably appoints Lender, effective as of an Event of
Default, as agent and attorney-in-fact for Borrower, coupled with an interest,
to collect such premium; (ii) may apply the reserve for Impositions and
insurance premiums, if any, required by this Mortgage, toward payment of the
Indebtedness; and (iii) shall have and may exercise any and all other rights and
remedies which Lender may have at law or in equity, or by virtue of any Loan
Document or under the Code, or otherwise.

     8.2  Possession After Foreclosure. If the liens or security interests
          ----------------------------
hereof shall be foreclosed by power of sale granted herein, by judicial action,
or otherwise, the purchaser at any such sale shall receive, as an incident to
purchaser's ownership, immediate possession of the property purchased, and if
Borrower or Borrower's successors shall hold possession of said property or any
part thereof subsequent to foreclosure, Borrower and Borrower's successors shall
be considered as tenants at sufferance of the purchaser at foreclosure sale
(without limitation of other rights or remedies, at a reasonable rental per day,
due and payable daily, based upon the value of the portion of the Mortgaged
Property so occupied and sold to such purchaser), and anyone occupying such
portion of the Mortgaged Property, after demand is made for possession thereof,
shall be guilty of forcible detainer and shall be subject to eviction and
removal, forcibly or otherwise, with or without process of law, and all damages
by reason thereof are hereby expressly waived.

     8.3  Application of Foreclosure and Other Proceeds. The proceeds from any
          ---------------------------------------------
sale, lease, or other disposition made pursuant to this Article VIII, or any
                                                        ------------
Rents collected by Lender

                                      -26-
<PAGE>

from the Mortgaged Property, or the reserve for insurance premiums, ground rents
or Impositions, if any, required by the provisions of this Mortgage and other
sums received pursuant to Section 8.1 (Lender's Remedies Upon Default) hereof,
                          -----------
which Lender elects to apply to the Indebtedness, shall be applied by Lender to
the Indebtedness in the following order and priority: (i) first to the payment
of all expenses of advertising, selling, and conveying the Mortgaged Property or
part thereof, and/or prosecuting or otherwise collecting Rents, proceeds,
premiums, or other sums, and to the payment of all expenses, liabilities and
advances made or incurred by Lender hereunder, together with interest thereon at
the Default Rate; (ii) next, to the Indebtedness as follows: first, to the
accrued but unpaid interest, late charges and other fees, second, to the matured
portion of principal of the Indebtedness, third, to prepayment of the unmatured
portion, if any, of principal of the Indebtedness applied to installments of
principal in inverse order of maturity, and fourth, to the full performance and
discharge of the Obligations; and (iii) next, to the extent permitted by law, to
be set aside by Lender as adequate security in its judgment for the payment of
sums which would have been paid by application of clause (i) above to Lender,
arising out of any obligations or liability with respect to which Borrower has
agreed to indemnify or reimburse Lender, but which sums are not yet due and
payable or liquidated, (iv) next to the holder of any inferior liens covering
the Mortgaged Property, if any, in order of the priority of such inferior liens
(Lender shall hereby be entitled to rely exclusively upon a commitment for title
insurance issued to determine such priority); and (v) finally, to the Borrower.
The application of proceeds of sale or other proceeds as otherwise provided
herein shall be deemed to be a payment of the Indebtedness like any other
payment (provided, however, that insurance and condemnation proceeds shall be
treated as set forth in Article 5 hereof). The balance of the Indebtedness
remaining unpaid, if any, shall remain fully due and owing in accordance with
the terms of the Note or the other Loan Documents.

     8.4  Miscellaneous Matters Relating to Exercise of Remedies.
          ------------------------------------------------------

          (a)  In case Lender shall have proceeded to invoke any right, remedy,
or recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon same for any reason, Lender shall have the unqualified
right so to do and, in such event, Borrower and Lender shall be restored to
their former positions with respect to the Indebtedness, the Loan Documents, the
Mortgaged Property or otherwise, and the rights, remedies, recourses and powers
of Lender shall continue as if same had never been invoked.

          (b)  All rights, remedies, and recourses of Lender granted in the
Note, this Mortgage, the other Loan Documents, any other pledge of collateral,
or otherwise available at law or equity: (i) shall be cumulative and concurrent;
(ii) may be pursued separately, successively, or concurrently against Borrower,
the Mortgaged Property, or any one or more of them, or any other person, at the
sole discretion of Lender; (iii) may be exercised as often as occasion therefor
shall arise, it being agreed by Borrower that the exercise or failure to
exercise any of same shall in no event be construed as a waiver or release
thereof or of any other right, remedy, or recourse; (iv) shall be nonexclusive;
(v) shall not be conditioned upon Lender exercising or pursuing any remedy in
relation to the Mortgaged Property prior to Lender bringing suit to recover the
Indebtedness or suit on the Obligations; and (vi) in the event Lender

                                      -27-
<PAGE>

elects to bring suit on the Indebtedness and/or the Obligations and obtains a
judgment against Borrower prior to exercising any remedies in relation to the
Mortgaged Property, all liens and security interests, including the lien of this
Mortgage, shall remain in full force and effect and may be exercised thereafter
at Lender's option.

          (c)  Any statements of fact or other recitals made in any deed, bill
of sale, or other instrument evidencing a foreclosure, and any statement made by
Lender as to nonpayment of the Indebtedness, or as to the occurrence of any
Event of Default, or as to Lender having declared all or any part of the
Indebtedness to be due and payable, or as to the request to sell, or as to
notice of time, place and terms of sale and of the property or rights to be sold
having been duly given, or as to any other act or thing having been duly done by
Borrower or Lender, shall be taken as prima facie evidence of the truth of the
                                      ----- -----
facts so stated and recited. Lender may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident to any sale so
held, including the posting of notices and the conduct of sale.

          (d)  Lender may release, regardless of consideration, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating, or releasing the lien or security interests created by
this Mortgage or the other Loan Documents or affecting the obligations of
Borrower or any other party to pay the Indebtedness or perform and discharge the
Obligations. For payment of the Indebtedness, Lender may resort to any of the
collateral therefor in such order and manner as Lender may elect. No collateral
heretofore, herewith, or hereafter taken by Lender shall in any manner impair or
affect the collateral given pursuant to the Loan Documents.

                                  Article IX

                                 MISCELLANEOUS
                                 -------------

     9.1  Borrower's Right to Contest Certain Matters. Notwithstanding the
          -------------------------------------------
provisions of Sections 3.2 (Borrower's Compliance with Legal Requirements),
Sections 3.3. (Borrower's Payment of Impositions) or 3.9 (Borrower's Payment for
------------                                         ---
Labor and Materials), Borrower shall not be in default for failure to pay or
discharge any Imposition or mechanic's or materialman's lien asserted against
the Mortgaged Property or to comply with any Legal Requirement if, and so long
as, (i) Borrower shall have notified Lender of same within thirty (30) days of
obtaining knowledge thereof; (ii) Borrower shall diligently and in good faith
contest the same by appropriate legal proceedings which shall operate to prevent
the enforcement or collection of the same and the sale of the Mortgaged Property
or any part thereof, to satisfy the same; (iii) if requested by Lender in the
case of any matter, the cost to cure of which will exceed $15,000, Borrower
shall have furnished to Lender a cash deposit, or an indemnity bond reasonably
satisfactory to Lender with a surety satisfactory to Lender, in such amount as
Lender deems reasonable to prevent Lender from incurring any loss, cost, expense
or damage as a result of any such contest, to amount or assure payment of the
matters under contest and to prevent any sale or forfeiture of the Mortgaged
Property or any part thereof; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such Imposition or claim so
determined, together

                                      -28-
<PAGE>

with all costs, interest and penalties which may be payable in connection
therewith or comply with the applicable Legal Requirement, as the case may be;
(v) the failure to pay the Imposition or mechanic's or materialman's lien claim
or to comply with any Legal Requirement does not constitute a default under any
other deed of trust, mortgage or security interest covering or affecting any
part of the Mortgaged Property; and (vi) notwithstanding the foregoing, Borrower
shall immediately upon request of Lender pay any such Imposition or claim or
comply with the applicable Legal Requirement, as the case may be,
notwithstanding such contest, if in the reasonable opinion of Lender the
Mortgaged Property shall be in jeopardy or in danger of being forfeited or
foreclosed (and if Borrower shall fail so to do, Lender may, but shall not be
required to, pay, perform or cause to be discharged or bonded against any such
Imposition, claim, lien or Legal Requirement, and, Borrower shall reimburse
Lender its cost thereof on demand, together with interest thereon at the Default
Rate). Lender may pay over any such cash deposit made pursuant to clause (iii)
above or part thereof to the claimant entitled thereto at any time when, in the
judgment of Lender, the entitlement of such claimant is established.

     9.2  Intentionally Omitted.

     9.3  Notices. Any notice, request, demand, statement or consent made
          -------
hereunder shall be in writing signed by the party giving such notice, request,
demand, statement or consent, and shall be deemed to have been properly given if
either delivered personally, delivered to a reputable overnight delivery service
providing a receipt or deposited in the United States Mail, postage prepaid and
certified return receipt requested, at the address set forth below, or at such
other address within the continental United States of America as may have
theretofore been designated in writing. The effective date of any notice given
as aforesaid shall be the date of personal service, one (1) business day after
delivery to such overnight delivery service, or three (3) business days after
being deposited in the United States Mail, whichever is applicable. The phrase
"business day" or "Business Day", and similar phrases, as used in this Mortgage
shall mean any day other than a Saturday, a Sunday or a Federal holiday on which
the U.S. Postal Service offices are closed for business in Boston,
Massachusetts. For purposes hereof, the addresses are as follows:

     If to Lender:       Trex Medical Corporation
                         81 Wyman Street
                         P.O. Box 9406
                         Waltham, Massachusetts 02254-9046
                         Attn:  James H. DaCosta

     With a copy to:     Hale and Dorr LLP
                         60 State Street
                         Boston, Massachusetts  02109
                         Attn:  Hal J. Leibowitz, Esq.

     If to Borrower:     Hologic, Inc.
                         35 Crosby Drive

                                      -29-
<PAGE>

                         Bedford, Massachusetts 01730
                         Attn:  Glenn Muir

     With a copy to:     Brown, Rudnick, Freed & Gesmer
                         One Financial Center
                         Boston, Massachusetts  02111
                         Attn:  Philip Flink, Esq.

     9.4  Covenants Running with the Land: Bind and Inure. All Obligations
          -----------------------------------------------
contained in this Mortgage and the other Loan Documents are intended by Borrower
and Lender to be, and shall be construed as, covenants running with the
Mortgaged Property. Subject to the provisions of Section 3.20 (No Transfers of
                                                 ------------
Mortgaged Property or Interests in Borrower Permitted) hereof, all of the terms
of the Loan Documents shall apply to, be binding upon, and inure to the benefit
of the parties thereto, their successors, assigns, heirs, and legal
representatives, and all other persons claiming by, through, or under them.

     9.5  No Waiver: Severability. Any failure by Lender to insist, or any
          -----------------------
election by Lender not to insist, upon strict performance by Borrower or others
of any of the terms, provisions, or conditions of the Loan Documents shall not
be deemed to be a waiver of same or of any other terms, provisions, or
conditions thereof, and Lender shall have the right at any time or times
thereafter to insist upon strict performance by Borrower or others of any and
all of such terms, provisions, and conditions. The Loan Documents are intended
to be performed in accordance with, and only to the extent permitted by, all
applicable Legal Requirements. If any provision of any of the Loan Documents or
the application thereof to any person or circumstance shall, for any reason and
to any extent, be invalid or unenforceable, then neither the remainder of the
instrument in which such provision is contained nor the application of such
provision to other persons or circumstances nor the other instruments referred
to herein shall be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.

     9.6  Counterparts. To facilitate execution, this Mortgage may be executed
          ------------
in as many counterparts as may be convenient or required. It shall not be
necessary that the signature and acknowledgment of, or on behalf of, each party,
or that the signature and acknowledgment of all persons required to bind any
party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument.

     9.7  Applicable Law: Service of Process. This Mortgage shall be governed by
          ----------------------------------
and construed according to the laws of the Commonwealth of Massachusetts, except
the provisions hereof relating to the exercise by Lender of its remedies
relating to the Mortgaged Property, which shall be governed by the laws of the
State of Connecticut. Service of process may be made upon the Borrower by
mailing a copy of the summons and any complaint to the Borrower, by certified or
registered mail, return receipt requested, at the address to be used for the
giving of notice to the Borrower under this Agreement.

                                      -30-
<PAGE>

     9.8  Usury. It is hereby expressly agreed that if from any circumstances
          -----
whatsoever fulfillment of any provision of this Mortgage or any other Loan
Document, at the time performance of such provision shall be due, shall involve
transcending the limit of validity then prescribed by any applicable usury
statute or any other law, with regard to obligations of like character and
amount, then ipso facto the obligation to be fulfilled shall be reduced to the
             ---- -----
limit of such validity, so that in no event shall any exaction be possible under
this Mortgage or any other Loan Document that is in excess of the limit of such
validity. In no event shall Borrower be bound to pay for the use, forbearance or
detention of the money loaned pursuant hereto interest of more than the legal
limit in effect at the time, the right to demand any such excess being hereby
expressly waived by Lender.

     9.9  Change of Security. Any part of the Mortgaged Property may be
          ------------------
released, regardless of consideration, by Lender from time to time without
impairing, subordinating, or affecting in any way the lien, security interest,
and other rights hereof against the remainder. The lien, security interest, and
other rights granted hereby shall not be affected by any other security taken
for the Indebtedness or Obligations, or any part thereof. The taking of
additional collateral, or the amendment, extension, renewal, or rearrangement of
the Indebtedness or Obligations, or any part thereof, shall not release or
impair the lien, security interest, and other rights granted hereby, or affect
the liability of any indemnitor, endorser or guarantor or improve the right of
any junior lienholder; and this Mortgage, as well as any instrument given to
secure any amendment, extension, renewal, or rearrangement of the Indebtedness
or Obligations, or any part thereof, shall be and remain a first and prior lien,
except as otherwise provided herein, on all of the Mortgaged Property not
expressly released until the Indebtedness is fully paid and the Obligations are
fully performed and discharged.

     9.10 Headings for Convenience Only. The headings of the Articles, Sections,
          -----------------------------
and Subsections hereof are inserted for convenience of reference only and shall
in no way alter, modify, or define, or be used in construing the text of such
Articles, Sections, or Subsections.

     9.11 No Representation by Lender. By accepting or approving anything
          ---------------------------
required to be observed, performed, or fulfilled or to be given to Lender
pursuant to the Loan Documents, Lender shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, legality, effectiveness, or legal
effect of the same.

     9.12 Lender's Right to Assign and Participate Interests. Lender may, at any
          --------------------------------------------------
time, sell, transfer, assign or grant participations in the Note, this Mortgage
and the Loan Documents, and Lender may forward to each assignee or participant,
and each prospective assignee or participant, all documents and information
which Lender now has or may hereafter acquire relating to the Indebtedness or
Obligations and to Borrower and the Mortgaged Property.

     9.13  Entire Agreement: Amendments in Writing. THIS MORTGAGE AND THE OTHER
          ---------------------------------------
LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN

                                      -31-
<PAGE>

OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO. The provisions of this Mortgage and the Loan Documents
may be amended or waived only by an instrument in writing signed by the Borrower
and Lender.

     9.14 Waiver of Right to Trial by Jury. BORROWER AND LENDER HEREBY
          --------------------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF ANY OF THE
LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY LENDER IN THE ENFORCEMENT
OF ANY OF THE TERMS OR PROVISIONS OF THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.

                                   Article X

                           SPECIAL STATE PROVISIONS
                           ------------------------

     10.1 Mortgage Covenants. The Mortgage is granted with MORTGAGE COVENANTS,
          ------------------
and is upon the STATUTORY CONDITION.

     10.2 Mortgage Condition. The condition of this Mortgage is such that the
          ------------------
Borrower is justly indebted to the Lender in the sum of $25,000,000.00, which
sum is evidenced by Borrower's Promissory Note for said sum, dated of even date
herewith, payable to Lender, a copy of which is attached hereto as Exhibit "C"
                                                                   -----------
and made a part hereof."

     10.3 Open-End Provision. This is an "Open-End" Mortgage and the holder
          ------------------
hereof shall have all the rights, powers and protection to which the holder of
an Open-End Mortgage is entitled. It is further agreed that upon request of
Borrower, Lender may hereafter, at its option, at any time before full payment
of this Mortgage, make further advances, to Borrower, in amounts and at such
rates of interest as Lender shall determine, and every such further advance,
with interest, shall be secured by this Mortgage and evidenced by an additional
Note given by the Borrower, provided, that the amount of the Principal secured
by this Mortgage and remaining unpaid shall at no time exceed the original
principal sum secured hereby and provided that the time of repayment of such
advancement shall not extend the time of repayment beyond the maturity of the
original debt hereby secured.

                                      -32-
<PAGE>

     EXECUTED under seal as of the date first set forth above.

                                       BORROWER:

                                       Hologic, Inc.


                                       By:/s/ Glenn P. Muir
                                          ------------------------------
                                       Glenn P. Muir
                                       Title: Vice President, Finance and
                                              Treasurer
                                              (Principal Financial Officer)
                                              Hereunto duly authorized

WITNESSES:


/s/ Julia Steen
------------------------------
Name:



/s/ Daniel Gusenoff
------------------------------
Name:

                                      -33-
<PAGE>

                                ACKNOWLEDGMENT
                                --------------

COMMONWEALTH OF MASSACHUSETTS   (S)

COUNTY OF SUFFOLK               (S)

     Personally Appeared

Glenn P. Muir as aforesaid Signer of the foregoing Instrument, and acknowledged
the same to be his free act and deed as such Vice President, Finance and
Treasurer and the free act and deed of said corporation, before me.

/s/ Cathie Dalissuie
------------------------------
Notary Public
My Commission Expires: 6/9/06

                                      -34-