Document:

<PAGE>   1

                             TWIN LABORATORIES INC.

                                       to

                  THE CIT GROUP/BUSINESS CREDIT, INC., as agent

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

                         MORTGAGE, ASSIGNMENT OF RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

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

                           Dated:  March 29, 2001

                           Street Address:   2120 Smithtown Avenue
                                             Ronkonkoma, New York

                           District:        0500
                           Section:         106.03
                           Block:           01.00
                           Lot:             003.006

                           RECORD AND RETURN TO:

                           BUCHALTER, NEMER, FIELDS & YOUNGER
                           601 S. Figueroa
                           Suite 2400
                           Los Angeles, California  90017
                           Attn:  Joseph Vargas, Esq.

--------------------------------------------------------------------------------
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                      THIS DOCUMENT TO BE RECORDED BOTH AS
                          A MORTGAGE AND FIXTURE FILING

                 THIS DOCUMENT SECURES OBLIGATIONS WHICH CONTAIN
                   PROVISIONS FOR A VARIABLE RATE OF INTEREST

THE STATE OF NEW YORK               )
                                    )
COUNTY OF SUFFOLK                   )

         MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT and FIXTURE FILING
made this 29th day of March, 2001, between TWIN LABORATORIES INC., a Utah
Corporation ("Mortgagor") having an office at 150 Motor Parkway, Hauppauge, New
York 11788, as mortgagor, and THE CIT GROUP/BUSINESS CREDIT, INC., a New York
corporation, as agent, having an office at 300 South Grand Avenue, Third Floor,
Los Angeles, California 90071, Attn: Regional Manager, as mortgagee.

                                   WITNESSETH

         THIS MORTGAGE CONSTITUTES A FIXTURE FILING UNDER SECTION 9-313 OF THE
UNIFORM COMMERCIAL CODE OF THE STATE OF NEW YORK. TO THE EXTENT THE GOODS ARE
FIXTURES UNDER THE LAWS OF THE STATE OF NEW YORK, THE FIXTURES ARE OR ARE TO
BECOME FIXTURES ON THE REAL PROPERTY LOCATED IN THE COUNTY OF SUFFOLK, STATE OF
NEW YORK, MORE PARTICULARLY DESCRIBED ON EXHIBIT A ATTACHED HERETO, COMMONLY
KNOWN BY THE STREET ADDRESS: 2120 SMITHTOWN AVENUE, RONKONKOMA, NEW YORK. THE
NAME OF THE RECORD OWNER OF THE REAL PROPERTY IS TWIN LABORATORIES INC., A UTAH
CORPORATION.

         WHEREAS, Mortgagor is the owner of the premises described in Exhibit A
attached hereto and made a part hereof; and

         NOW, WITNESSETH, that Mortgagor, for the purpose of securing (a) the
payment of an indebtedness in an aggregate principal amount of Four Million Two
Hundred Thousand Dollars ($4,200,000), to be paid in accordance with the terms
and with interest as set forth in that certain Term Loan Promissory Note (New
York) (hereinafter referred to as the "Note"), of

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even date herewith, made by Mortgagor and others to the order of The CIT
Group/Business Credit, Inc., as agent (The CIT Group/Business Credit, Inc., as
initial agent and any successor agent appointed pursuant to the Loan Agreement,
as hereinafter defined, being hereinafter referred to as "Mortgagee") and all
modifications, extensions and/or renewals thereof, (b) the payment and
performance of all indebtedness and obligations of Mortgagor arising under this
Mortgage, and other documents executed by Mortgagor in connection herewith and
(c) payment of any money advanced by Mortgagee to Mortgagor, or its successors,
with interest thereon, evidenced by additional notes (indicating that they are
so secured) or by endorsement of the original notes, executed by Mortgagor or
its successor, and (d) performance of all other obligations of Mortgagor arising
under that certain Financing Agreement (BUT NOT the repayment of any other sums
evidencing borrowed money except those evidenced by the Note) of even date
herewith to which inter alia Mortgagee and Mortgagor are parties (the "Loan
Agreement": initially capitalized terms not otherwise defined herein shall have
the meaning set forth in the Loan Agreement) and all modifications, extensions
and/or renewals thereof, and as, for and in consideration of the further sum of
One Dollar ($1.00) into Mortgagor paid by Mortgagee at and before the sealing
and delivery hereof, the receipt whereof is hereby acknowledged, Mortgagor has
granted, given, mortgaged, chattel mortgaged, bargained, sold, alienated,
enfeoffed, released, conveyed confirmed, and assigned and by these presents does
grant, give, mortgage, chattel mortgage, bargain, sell, alienate, enfeoff,
release, convey, confirm and assign unto Mortgagee, all its estate, right, title
and interest in, to and under any and all of the property located in the City of
Ronkonkoma, County of Suffolk, State of New York, and more particularly
described in Exhibit A attached hereto and made a part hereof, including all
easements, rights, privileges, tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining, and all of the estate, right,
title, interest, claim, demand, reversion or remainder whatsoever of Mortgagor
therein or thereto, either at law or in equity, in possession or expectancy, now
or hereafter acquired, including, without limitation, all and singular the ways,
waters, water courses, water rights and powers, liberties, privileges, sewers,
pipes, conduits, wires and other facilities furnishing utility or other services
to the property (collectively, the "Land");

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         TOGETHER with all of the right, title and interest of Mortgagor in and
to all buildings, structures and improvements now or hereafter erected on the
Land including all plant equipment, apparatus, machinery and fixtures of every
kind and nature whatsoever now or hereafter located on or forming part of said
buildings, structures and improvements (collectively, the "Improvements"; the
Land and Improvements being hereinafter collectively referred to as the
"Premises");

         TOGETHER with all of the right, title and interest of Mortgagor in and
to the land lying in the bed of any street, road, highway or avenue in front of
or adjoining the Premises;

         TOGETHER with all right, title and interest of Mortgagor in any and all
award and awards heretofore made or hereafter to be made by any governmental
authorities to the present and all subsequent owners of the Premises which may
be made with respect to the Premises as a result of the return of excess taxes
paid on the Mortgaged Property, the exercise of the right of eminent domain, the
alteration of the grade of any street or any other injury to or decrease of
value of the Premises, which said award or awards are hereby collaterally
assigned to Mortgagee and Mortgagee, at its option, is hereby authorized,
directed and empowered to collect and receive the proceeds of any such award or
awards from the authorities making the same and to give proper receipts and
acquittances therefor, and to apply the same as hereinafter provided; and
Mortgagor hereby covenants and agrees to and with Mortgagee, upon request by
Mortgagee, to make, execute and deliver, at Mortgagor's expense, any and all
assignments and other instruments sufficient for the purpose of assigning the
aforesaid award or awards to Mortgagee free, clear and discharged of any and all
encumbrances of any kind or nature whatsoever;

         TOGETHER with all of the right, title and interest of Mortgagor in all
goods, equipment, machinery, furniture, furnishings, fixtures, appliances,
inventory, building materials, chattels and articles of personal property (other
than personal property which is or at any time has become Hazardous Substances,
as hereinafter defined), including any interest therein, now or at any time
hereafter affixed to, attached to, or used in any way in connection with or to
be incorporated at any time into the Premises, or placed on any part thereof
whether or not attached or incorporated to the

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premises thereto, together with any and all replacements thereof, appertaining
and adapted to the complete and compatible use, enjoyment, occupancy, operation
or improvement of the Premises (collectively, the "Chattels");

         TOGETHER with all right, title and interest of Mortgagor in leases of
the Premises or the Chattels or any part thereof now or hereafter entered into
and all right, title and interest of Mortgagor thereunder, including, without
limitation, cash or securities deposited thereunder to secure performance by the
lessees of their obligations thereunder (whether such cash or securities are to
be held until the expiration of the terms of such leases or applied to one or
more of the installments of rent coming due immediately prior to the expiration
of such terms) and all rights to all insurance proceeds and unearned premiums
arising from or relating to the Premises and all other rights and easements of
Mortgagor now or hereafter existing pertaining to the use and enjoyment of the
Premises and all right, title and interest of Mortgagor in and to all
declarations of covenants, conditions and restrictions as may affect or
otherwise relate to the Premises;

         TOGETHER with all right, title and interest of Mortgagor in all sales
agreements, deposit receipts, escrow agreements and other ancillary documents
and agreements entered into with respect to the sale to any purchasers of any
part of the Premises, and all deposits and other proceeds thereof;

         TOGETHER with all right, title and interest of Mortgagor in all
permits, plans, licenses, specifications, subdivision rights, tentative tract
maps, final tract maps, security interests, contracts, contract rights or other
rights as may affect or otherwise relate to the Premises;

         TOGETHER with the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect to the
Mortgaged Property and to commence any action or proceeding to protect the
interest of Mortgagee in the Mortgaged Property;

         TOGETHER with all rights of Mortgagor in or to any fund, program or
trust monies and any reimbursement therefrom directly or indirectly established,
maintained or administered by any governmental authority or any other individual
or

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entity which is designed to or has the effect of providing funds (whether
directly or indirectly or as reimbursement) for the repair or replacement of
storage tanks (whether above or below ground) located on the Premises or the
remediation or cleanup of any spill, leakage or contamination from any such tank
or resulting from the ownership, use or maintenance of any such tank or to
compensate third parties for any personal injury or property damage;

         TOGETHER with all right, title and interest of Mortgagor in all rents,
issues, profits, revenues, income and other benefits to which Mortgagor may now
or hereafter be entitled from the Premises or the Chattels (which Premises,
titles, interests, awards, Chattels, easements, rents, income, benefits, ways,
waters, rights, powers, liberties, privileges, utilities, tenements,
hereditaments, appurtenances, reversions, remainders, rents, issues, profits,
estate, property, possession, claims and demands, are hereinafter collectively
referred to as the "Mortgaged Property": the foregoing notwithstanding, the
Mortgaged Property shall not include, and no security interest, lien or pledge
granted hereunder shall extend or attach to; (i) Mortgagor's rights (other than
rights to payment) under any license agreements or lease agreements existing as
of the date hereof, or any leases of real property or leases of motor vehicles
or other personal property now or hereafter existing that prohibit the grant of
a security interest or lien therein or pledge to the extent, and only to the
extent, that the terms prohibiting the grant of such security interest or lien
or pledge have not been waived or consented to in writing by the licensor,
lessor or other necessary person or entity under such agreement; or (ii)
Mortgagor's rights in and to specific items of Equipment which are subject to
liens permitted by clause (a) or (b) of the definition of Permitted
Encumbrances, as defined in the Loan Agreement, or Mortgagor's rights under any
agreement granting any such liens to the extent, and only to the extent, that
(A) the agreements granting such liens prohibit the grant of a security interest
in the Mortgagor's rights in such Equipment or in such agreements and (B) the
terms prohibiting the grant of such security interest have not been waived or
consented to in writing by the secured party or other necessary person or entity
under such agreement.);

         TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the proper use and benefit of

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Mortgagee, its successors and assigns forever.

         PROVIDED, ALWAYS, and these presents are upon this express condition,
if Mortgagor shall well and truly pay to Mortgagee the obligations at the time
and in the manner provided in the Note, and shall well and truly abide by and
comply with each and every covenant and condition set forth herein and in the
Note and Loan Agreement, then these presents and the estate hereby granted shall
cease, determine and be void.

                                    ARTICLE I

         And Mortgagor further covenants with Mortgagee as follows:

         SECTION I.1. Mortgagor has good title to the Premises in fee simple
subject to no lien, charge, or encumbrance except Permitted Encumbrances; that
it owns the Chattels free and clear of liens and claims except Permitted
Encumbrances; that this Mortgage is and will remain a valid and enforceable lien
on the Mortgaged Property subject only to the Permitted Encumbrances exceptions
referred to above. Mortgagor will preserve such title, and will forever
preserve, warrant and defend the same unto Mortgagee, and will forever preserve,
warrant and defend the validity and such priority of the lien hereof against the
claims of all persons and parties whomsoever.

         SECTION I.2. Mortgagor will pay all filing, registration or recording
fees, all federal, state, county and municipal stamp taxes and other fees,
taxes, duties, imposts, assessments (or contest in good faith, by appropriate
proceedings or other appropriate actions which are sufficient to prevent
imminent foreclosure of such liens and with respect to which adequate reserves
or other appropriate provisions are being maintained by each of the Companies,
as applicable, in accordance with GAAP) and all other charges incident to,
arising out of or in connection with the preparation, execution, delivery and
enforcement of the Note, the Loan Agreement, this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Chattels or any
instrument of further assurance.

         SECTION I.3. Pursuant to Section 13 of the Lien Law of

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New York, Mortgagor shall receive the advances secured hereby and shall hold the
right to receive such advances as a trust fund to be applied first for the
purpose of paying the cost of any improvement and shall apply such advances
first to the payment of the cost of any such improvement on the Mortgaged
property before using any part of the total of the same for any other purpose.

         SECTION I.4. Intentionally Deleted.

         SECTION I.5. All right, title and interest of Mortgagor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Mortgaged Property, hereafter
acquired by, or released to, or constructed, assembled or placed by Mortgagor on
the Premises, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case, without any further
grant, conveyance, assignment or other act by Mortgagor, shall become subject to
the lien and security interest of this Mortgage as fully and completely, and
with the same effect, as though now owned by Mortgagor and specifically
described in the granting clause hereof.

         SECTION I.6. Mortgagor will pay from time to time when the same shall
become due, all lawful claims and demands of mechanics, materialmen, laborers,
and others which, if unpaid, might result in, or permit the creation of, a lien
(other than a Permitted Encumbrance) on the Mortgaged Property or any part
thereof, or on the revenues, rents, issues, income and profits arising therefrom
and in general will do or cause to be done everything necessary so that the lien
and security interest hereof shall be fully preserved, at the cost of Mortgagor,
without expense to Mortgagee.

         SECTION I.7. Intentionally Deleted.

         SECTION I.8. In the event of the passage, after the date of this
Mortgage, of any law of the State of New York deducting from the value of the
Mortgaged Property for the purpose of taxing the amount of any lien thereon, or
changing in any way the laws now in force for the taxation of mortgages, or
debts secured thereby, for state or local purposes, or the manner of operation
of any such taxes which

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has the effect of imposing payment of the whole or any portion of such taxes
against the Mortgaged Property upon Mortgagee, so as to adversely affect the
interest of Mortgagee, then and in such event, Mortgagor shall bear and pay the
full amount of such taxes, provided that if for any reason payment by Mortgagor
of any such new or additional taxes would be unlawful or if the payment thereof
would constitute usury or render the Note or the indebtedness secured hereby
wholly or partially usurious under any of the terms or provisions of the Note or
this Mortgage, or otherwise, Mortgagee may, at its option, upon thirty (30)
days' written notice to Mortgagor, (i) declare the whole indebtedness secured by
this Mortgage, with interest thereon, to be immediately due and payable, or (ii)
pay that amount or portion of such taxes as renders the Note or the indebtedness
secured hereby unlawful or usurious, in which event Mortgagor shall concurrently
therewith pay the remaining lawful non-usurious portion or balance of said
taxes.

         SECTION I.9. In addition to restrictions contained in the Loan
Agreement, or except as may be expressly permitted under the Loan Agreement or
any other Loan Document (as defined in the Loan Agreement), Mortgagor will not
further encumber, sell, convey or transfer any interest in, or any part of, the
Mortgaged Property (unless the same shall constitute a Permitted Encumbrance).
Any such encumbrance, sale, conveyance or transfer made without Mortgagee's
prior written consent shall be an Event of Default hereunder.

         SECTION I.10. Intentionally Deleted.

         SECTION I.11. Intentionally Deleted.

         SECTION I.12. (a) If Mortgagor shall fail to perform any of the
covenants contained herein on its part to be performed within the time period
provided herein for such performance, and such failure shall continue for ten
(10) days after written notice thereof from Mortgagee to Mortgagor, Mortgagee
may, but shall not be required to, make advances to perform the same, or cause
the same to be performed, on Mortgagor's behalf, and all sums so advanced shall
bear interest, from and after the date advanced until repaid, at the lower of
(i) the maximum rate permitted by law or (ii) the Default Rate of Interest,
shall be a lien upon the Mortgaged Property and shall, at Mortgagee's option, be
added to the indebtedness secured hereby. Mortgagor will repay on demand

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all sums so advanced on its behalf with interest at the rate herein set forth.
This Section 1.12 shall not be construed as preventing any default by Mortgagor
in the observance of any covenant contained in this Mortgage from constituting
an Event of Default hereunder.

            (b) Mortgagee has the right to appear in and defend any action or
proceeding bought with respect to the Mortgaged Property and to bring any action
or proceeding, in the name and on behalf of Mortgagor, which Mortgagee, in its
discretion, decides should be brought to protect its interest in the Mortgaged
Property. Mortgagee shall, at its option, be subrogated to the lien of any
mortgage or other security instrument discharged in whole or in part by the
Obligations, and any such subrogation rights shall constitute additional
security for the payment of the Obligations.

         SECTION I.13. Intentionally Deleted.

         SECTION I.14. Mortgagor will not commit any waste at or with respect to
the Mortgaged Property. Mortgagor will, at all times, maintain the Improvements
and Chattels in good order and condition ordinary wear and tear excepted and
will promptly make, from time to time, all repairs, renewals, replacements,
additions and improvements in connection therewith which are needful or
desirable to such end, except as otherwise expressly permitted under the Loan
Agreement or any other Loan Document. Improvements shall not be removed,
demolished or materially altered, nor, except as otherwise expressly permitted
under the Loan Agreement or any other Loan Document, shall any Chattels be
removed without the prior written consent of Mortgagee, provided, however, that
if there shall not exist an Event of Default, in addition to any rights to
remove or replace the Chattels under the Loan Agreement or any Loan Document,
Mortgagor may make appropriate replacements of Chattels, free of superior title,
liens and claims other than Permitted Encumbrances, provided such replacements
are promptly made and are of a value or utility at least equal to the value or
utility of the Chattels removed.

         SECTION I.15. Mortgagor will immediately notify Mortgagee of the
institution of any proceeding for the condemnation or taking by eminent domain
of the Mortgaged Property, or any portion thereof promptly after Mortgagor
obtains knowledge of same. Mortgagee may participate in any

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such proceeding and Mortgagor from time to time will deliver to Mortgagee all
instruments requested by it to permit such participation. In the event of such
condemnation proceedings, or a conveyance in lieu of such taking, the award or
compensation payable is hereby assigned to and shall be paid to Mortgagee.
Mortgagee shall be under no obligation to question the amount of any such award
or compensation and may accept the same in the amount in which the same shall be
paid, but shall have no right to bind Mortgagor or to make settlement of its
claim, except to the extent of the interest of Mortgagee. In any such
condemnation proceedings Mortgagee may be represented by counsel selected by
Mortgagee. The proceeds of any award or compensation so received after
reimbursement of any reasonable and documented expenses incurred by Mortgagee in
connection with such proceedings, shall, at the option of Mortgagee, be applied,
without premium, to the repayment of the Note in such order as Mortgagee may in
its sole discretion elect (regardless of interest payable on the award by the
condemning authority), or to the cost of restoration of the Improvement or
Chattel so taken and other terms as shall be satisfactory to Mortgagee.

         SECTION I.16. (a) As part of the consideration for the indebtedness
evidenced by the Note, Mortgagor hereby absolutely and unconditionally assigns
and transfers to Mortgagee all the rents and revenues of the Mortgaged Property,
including those now due, past due, or to become due by virtue of any lease or
other agreement for the occupancy or use of or profits from all or any part of
the Mortgaged Property, regardless of to whom the rents and revenues of the
Mortgaged Property are payable. Mortgagor hereby authorizes Mortgagee or
Mortgagee's agents to collect the aforesaid rents and revenues and hereby
directs each tenant of the Mortgaged Property to pay such rents to Mortgagee or
Mortgagee's agents; provided, however, that prior to written notice given by
Mortgagee to Mortgagor of an Event of Default, Mortgagor shall collect and
receive all rents and revenues of the Mortgaged Property as trustee for the
benefit of Mortgagee and Mortgagor shall apply the rents and revenues so
collected to the sums secured by this Mortgage with the balance, so long as no
such breach has occurred, to the account of Mortgagor, it being intended by
Mortgagor and Mortgagee that this assignment of rents constitutes an absolute
assignment and not an assignment for additional security only.

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            (b) Upon delivery of written notice by Mortgagee to Mortgagor of an
Event of Default, and without the necessity of Mortgagee entering upon and
taking and maintaining full control of the Mortgaged Property in person, by
agent or by a court-appointed receiver, Mortgagee shall immediately be entitled
to receive all rents and revenues of the Mortgaged Property as specified in this
Section 1.16 as the same become due and payable, including but not limited to
rents then due and unpaid, and all such rents then held by Mortgagor or
thereafter delivered to Mortgagor shall, immediately upon delivery of such
notice, be held by Mortgagor as trustee for the benefit of Mortgagee only;
provided, however, that Mortgagee shall provide Mortgagor with a written
statement that Mortgagee exercises its rights to such rents. Mortgagor agrees
that commencing upon delivery of such written notice of the occurrence of an
Event of Default and Mortgagee's intent to exercise its rights to such rents,
each tenant of the Mortgaged Property shall make such rents payable to and shall
pay such rents directly to Mortgagee or Mortgagee's agents on Mortgagee's
written demand to each tenant therefor, delivered to each tenant personally, by
mail or by delivering such demand to each rental unit, without any liability on
the part of said tenant to inquire further as to the existence of a default by
Mortgagor. Mortgagor shall execute any and all writings and letters required by
Mortgagee, to be delivered to such tenants, to effectuate the intent of this
Section 1.16. Mortgagee shall have all of the rights against tenants of the
Mortgaged property as set forth in Section 291-f of the Real Property Law of New
York.

            (c) Mortgagor hereby covenants that Mortgagor has not executed any
prior assignment of said rents, that Mortgagor has not performed, and will not
perform, any acts or has not executed, and will not execute, any instrument
which would prevent Mortgagee from exercising its rights under this Section
1.16, and that at the time of execution of this Mortgage there has been no
anticipation or prepayment of any of the rents of the Mortgaged Property for
more than one month prior to the due dates of such rents. Mortgagor covenants
that Mortgagor will not hereafter collect or accept payment of any rents of the
Mortgaged Property more than one month prior to the due dates of such rents.
Mortgagor further covenants that Mortgagor will execute and deliver to Mortgagee
such further assignments of rents and revenues of the Mortgaged Property as
Mortgagee may from time to time reasonably

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request.

            (d) Upon an Event of Default, Mortgagee may, in person, by agent or
by a court-appointed receiver, regardless of the adequacy of Mortgagee's
security, enter upon and take possession of and maintain full control of the
Mortgaged Property in order to perform all acts necessary and appropriate for
the operation and maintenance thereof including, but not limited to, the
execution, cancellation or modification of leases, the collection of all rents
and revenues of the Mortgaged Property, the making of repairs to the Mortgaged
Property and the execution or termination of contracts providing for the
management or maintenance of the Mortgaged Property; all on such terms as are
deemed best to protect the security of this instrument. In the event Mortgagee
elects to seek the appointment of a receiver for the Mortgaged Property upon an
Event of Default, Mortgagor hereby expressly consents to the appointment of such
receiver upon ex parte application without notice. Mortgagee or the receiver
shall be entitled to receive a reasonable fee for so managing the Mortgaged
Property.

            (e) All rents and revenues collected subsequent to delivery of
written notice by Mortgagee to Mortgagor of an Event of Default shall be applied
first to the costs, if any, of taking control of and managing the Mortgaged
Property and collecting the rents, including, but not limited to, reasonable
attorney's fees, and receiver's fees, premiums on insurance policies, taxes,
assessments and other charges on the Mortgaged Property, and the costs of
discharging any obligation or liability of Mortgagor as lessor or landlord of
the Mortgaged Property and then to the sums secured by this Mortgage. Mortgagee
or the receiver shall have access to the books and records used in the operation
and maintenance of the Mortgaged Property and shall be liable to account only
for those rents and revenues actually received. Mortgagee shall not be liable to
Mortgagor, anyone claiming under or through Mortgagor or anyone having an
interest in the Mortgaged Property by reason of anything done or left undone by
Mortgagee under this Section 1.16, except to the extent of its gross negligence
or wilful misconduct.

            (f) If the rents of the Mortgaged Property are not sufficient to
meet the costs, if any, of taking control of and managing the Mortgaged Property
and collecting the rents, any

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funds expended by Mortgagee for such purposes shall become indebtedness of
Mortgagor to Mortgagee secured by this Mortgage. Unless Mortgagee and Mortgagor
agree in writing to other terms of payment, such amounts shall be payable upon
notice from Mortgagee to Mortgagor requesting payment thereof and shall bear
interest from the date of disbursement until paid, at the lower of (i) the
maximum rate permitted by law, or (ii) the default rate of interest under the
Loan Agreement.

            (g) Any entering upon and taking and maintaining of control of the
Mortgaged Property by Mortgagee or the receiver, and any application of rents as
provided herein shall not cure or waive any default hereunder or invalidate any
other right or remedy of Mortgagee under applicable law or provided herein. This
assignment of rents of the Mortgaged Property shall terminate at such time as
the indebtedness secured by this instrument is paid in full.

         SECTION I.17. (a) Mortgagor will not (i) except where the lessee is in
default thereunder, terminate or consent to the cancellation or surrender of any
lease of the Mortgaged Property or of any part thereof, now existing or
hereafter to be made or (ii) modify any such lease or give consent to any
assignment or subletting without Mortgagee's prior written consent (which shall
not be unreasonably withheld, conditioned or delayed), or (iii) accept
prepayments of any installments of rent or additional rent to be due under such
leases, except prepayments in the nature of security for the performance of the
lessee's obligations thereunder, or (iv) enter into any lease prohibited under
the provisions of the Loan Agreement.

            (b) Mortgagor will not execute any lease of all or a substantial
portion of the Mortgaged Property except for actual occupancy by the lessee
thereunder, and will at all times promptly and faithfully perform, or cause to
be performed, all of the material covenants, conditions and agreements contained
in all leases of the Mortgaged Property now or hereafter existing, on the part
of the lessor thereunder to be kept and performed. If any such lease provides
for the giving by the lessee of certificates with respect to the status of such
leases, Mortgagor shall exercise its right to request such certificates within
five (5) days of any demand therefor by Mortgagee.

            (c) Mortgagor shall furnish to Mortgagee, within

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fifteen (15) days after a request by Mortgagee to do so, a written statement
containing the names of all lessees for the Mortgaged Property, the term of
their respective leases, the spaces occupied, the rentals paid and any security
therefor.

         SECTION I.18.  Intentionally Deleted.

         SECTION I.19.  Intentionally Deleted.

         SECTION I.20.  Intentionally Deleted.

         SECTION I.21.  Intentionally Deleted.

         SECTION I.22.  Intentionally Deleted.

         SECTION I.23.  Intentionally Deleted.

         SECTION I.24.  Intentionally Deleted.

         SECTION I.25.  Intentionally Deleted.

         SECTION I.26.  Intentionally Deleted.

         SECTION I.27.  Intentionally Deleted.

         SECTION I.28.  Intentionally Deleted.

         SECTION I.29.  Intentionally Deleted.

         SECTION I.30.  Intentionally Deleted.

         SECTION I.31.  Intentionally Deleted.

         SECTION I.32.  Intentionally Deleted.

         SECTION I.33.  Intentionally Deleted.

         SECTION I.34.  Intentionally Deleted.

         SECTION I.35.  Intentionally Deleted.

                                       14
<PAGE>   16
                                   ARTICLE II

                         EVENTS OF DEFAULT AND REMEDIES

         SECTION II.1. The occurrence of any one or more of the following events
shall constitute an event of default ("Event of Default") hereunder:

            (a) If Mortgagor shall default in the payment of (i) any regular
installment of interest and/or principal on the Note within five (5) business
days of when the same shall have become due and payable, (ii) any other payment
of interest and/or principal due on the Note within five (5) business days of
when the same shall become due and payable, whether at any stated maturity or by
acceleration or otherwise, or (iii) any other sums required to be paid by
Mortgagor pursuant to the Note or this Mortgage within five (5) business days of
the date that such payments are therein or herein required to be made; or

            (b) If Mortgagor and/or Guarantor, if any, shall breach, or be in
default of, any of the covenants or provisions contained in this Mortgage or of
any chattel mortgage, other mortgages, security agreement or other document
issued thereunder or in connection therewith or herewith and the same shall not
be cured within fifteen (15) days of the occurrence of such breach; or

            (c) If Mortgagor shall violate the provisions of Section 1.09
hereof; or

            (d) If there shall be a termination, revocation or purported
revocation by any Guarantor under a Guaranty; or

            (e) if there shall be an Event of Default under the Loan Agreement.

         Upon the occurrence of an Event of Default, and in every such case:

         I0 Mortgagee, at its option, may declare the entire unpaid balance of
the indebtedness secured hereby to be immediately due and payable, and upon any
such declaration the entire indebtedness secured hereby shall become and be
immediately due and payable, anything in the Note, the Loan

                                       15
<PAGE>   17
Agreement or in this Mortgage to the contrary notwithstanding;

         II0 Mortgagee personally, or by its agents or attorneys may enter into
and upon all or any part of the Mortgaged Property, and each and every part
thereof, and may exclude the party owning the possessory interest in same, its
agents and servants wholly therefrom; and having and holding the same, may use,
operate, manage and control the Mortgaged Property for any lawful purpose and
conduct the business thereof, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers; and upon every such entry,
Mortgagee, at the expense of Mortgagor, from time to time, either by purchase,
repairs or construction, may maintain and restore the Mortgaged Property,
whereof it shall become possessed as aforesaid, may complete the construction of
any Improvements and in the course of such completion may make such changes in
the contemplated Improvements as it may deem desirable; may insure or reinsure
the same as provided in the Loan Agreement, and likewise, from time to time, at
the expense of Mortgagor, Mortgagee may make all necessary or proper repairs,
renewals, replacements, restorations, alterations, additions, betterments and
improvements to the Mortgaged Property or any part thereof and thereon as it may
deem advisable; and in every such case Mortgagee shall have the right to manage
and operate the Mortgaged Property, possessed as aforesaid, and to carry on the
business thereof and exercise all rights and powers of the party owning such
property with respect thereto either in the name of such party or otherwise as
it shall deem best; and Mortgagee shall be entitled to collect and receive all
earnings, revenues, rents, issues, profits and income of the Mortgaged Property
and every part thereof; and after deducting the expenses of conducting the
business thereof and of all maintenance, repairs, replacements, alterations,
additions, betterments and improvements and all payments which may be made for
taxes, assessments, insurance, in payment of any prior mortgage and prior or
other proper charges upon the Mortgaged Property or any part thereof, as well as
just and reasonable compensation of Mortgagee for the services of Mortgagee and
for all attorneys, counsel, agents, clerks, servants and other employees by it
properly engaged and employed, Mortgagee shall apply the moneys arising as
aforesaid, first to the payment of any sums, other than interest and principal
on the Note required to be paid by Mortgagor under this Mortgage, second, to the
payment of interest on the Note, third, to the payment

                                       16
<PAGE>   18
of the principal of the Note when and as the same shall become payable (whether
by acceleration or otherwise) and finally, in an amount equal to the Early
Termination Fee which would have been payable if Mortgagor had voluntarily
prepaid the Note and Loan Agreement.

     III. Mortgagee, with or without entry, personally or by its agents or
attorneys, insofar as applicable, may:

         (1) sell the Mortgaged Property to the extent permitted and pursuant to
the procedures provided by law, and all estate, right, title and interest, claim
and demand therein, and right of redemption thereof, at one or more sales as a
single parcel or as more than one parcel, at such time and place, upon such
terms, and in such order and after such notice thereof as may be required or
permitted by law; or

         (2) institute proceedings for the complete or partial foreclosure of
this Mortgage; or

         (3) take such steps to protect and enforce its rights or enforce its
remedies, whether by action, suit or proceeding at law or in equity, whether for
damages or for the specific performance of any covenant, condition or agreement
in the Note, Loan Agreement or in this Mortgage, or in aid of the execution of
any power herein granted or for any foreclosure hereunder, or for the
enforcement of any other appropriate legal or equitable remedy or otherwise as
Mortgagee shall elect.

     IV0 On and after the occurrence of an Event of Default, Mortgagor shall pay
all rents, issues and profits thereafter received by Mortgagor from the
Mortgaged Property to Mortgagee and to the extent not paid shall hold such
amounts as trust funds for the benefit of Mortgagee and such rents, issues and
profits shall be deemed "cash collateral" of Mortgagee under 11 U.S.C., as
amended.

     V0 Mortgagee shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the obligations secured
hereby as the same becomes due, without regard to whether or not the balance of
such obligations shall be due, and without prejudice to the right of Mortgagee
thereafter to bring an action of foreclosure, or any other action, for a default
or defaults by Mortgagor

                                       17
<PAGE>   19
existing at the time such earlier action was commenced.

     SECTION II.2. (a) Mortgagee may adjourn from time to time, as permitted by
law, any sale to be made by it under or by virtue of this Mortgage by
announcement at any time and place appointed for such sale or for such adjourned
sale or sales; and Mortgagee, without further notice or publication, except as
otherwise provided by any applicable provision of law, may make such sale at the
time and place to which the same shall be so adjourned.

     (b) Upon the completion of any sale or sales made by Mortgagee under or by
virtue of this Mortgage, Mortgagee, or an officer of any court empowered to do
so, shall execute and deliver to the accepted purchaser or purchasers a good and
sufficient deed and such other instrument, or instruments, as may be necessary
to convey, assign and transfer all estate, right, title and interest in and to
the Mortgaged Property and rights sold, but without any covenant or warranty,
express or implied, and without any representation, express or implied, as to
the existence, or lack thereof, of Hazardous Substances on the Mortgaged
Property. Mortgagee is hereby irrevocably appointed the true and lawful attorney
of Mortgagor in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Mortgaged Property and rights so
sold and for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, Mortgagor hereby ratifying and confirming all that its said attorney
or such substitute or substitutes shall lawfully do by virtue hereof.
Nevertheless, Mortgagor if so requested by Mortgagee shall ratify and confirm
any such sale or sales by executing and delivering to Mortgagee or to such
purchaser or purchasers all such instruments as may be advisable, in the
judgment of Mortgagee, for the purpose, and as may be designated in such
request. The receipt of Mortgagee of the Loan Documents, or of the court officer
conducting any such sale, for the purchase money paid at any such sale shall be
a sufficient discharge therefor to any purchaser of the Mortgaged Property, or
any part thereof, sold as aforesaid; and no such purchaser or his
representatives, grantees or assigns, after paying such purchase money and
receiving such a receipt, shall be bound to see to the application of such
purchase money upon or for the purpose of this Mortgage or the Note or Loan
Agreement, or shall be answerable in any manner

                                       18
<PAGE>   20
whatsoever for any loss, misapplication or non-application of any such purchase
money or any part thereof, nor shall any such purchaser be bound to inquire as
to the necessity or expediency of any such sale. Any such sale or sales made
under or by virtue of this Mortgage (whether made under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale) shall operate to
divest all the estate, right, title, interest, claim and demand whatsoever,
whether at law or in equity, of Mortgagor in and to the Mortgaged Property so
sold, and shall be a perpetual bar both at law and in equity against Mortgagor
and against any and all persons claiming or who may claim the same, or any part
thereof from, through or under Mortgagor.

     (c) The purchase money proceeds or avails of any sale made under or by
virtue of this Mortgage, together with any other sums which then may be held by
Mortgagee under this Mortgage, shall be applied as follows:

         First: To the payment of the costs and expenses of such sale, and costs
of title evidence and reasonable compensation to Mortgagee, its agents,
attorneys and counsel, and of any judicial proceedings wherein the same may be
made, and of all expenses, liabilities and advances made or incurred by
Mortgagee under this Mortgage (including, without limitation, attorney's fees
and costs incurred in connection with the enforcement of this Mortgage,
including, but not limited to, such fees and costs incurred pursuant to 11
U.S.C.), together with interest at the default rate set forth in the Note and
Loan Agreement, on all advances made by Mortgagee and all taxes or assessments,
except any taxes, assessments or other charges subject to which the Mortgaged
Property shall have been sold.

         Second: To the payment of interest on the Note, including interest at
the default rate set forth in the Note and Loan Agreement from and after the
happening of any Event of Default until the same is paid.

         Third: To the payment of the principal and interest on the Note then
remaining unpaid together with an amount which would have been equal to the
Early Termination Fee which would have been paid by Mortgagor if Mortgagor had
voluntarily prepaid the Note and Loan Agreement.

                                       19
<PAGE>   21
         Fourth: LASTLY, the balance or surplus, if any, of such proceeds of
sale to the person or persons legally entitled thereto, upon satisfactory proof
of such right.

     (d) In the event of a sale of the Mortgaged Property, or any part thereof,
and the execution of a deed or deeds therefor, the recitals therein of any
matters or facts shall be conclusive proof of the truthfulness thereof and of
the fact that said sale was regularly and validly made in accordance with all
requirements of the laws of the State of New York and of this Mortgage; and any
such deed or deeds, with such recitals therein, shall be effectual and
conclusive against Mortgagor and all other persons; and the receipt for the
purchase money recited or contained in any deed executed to the purchaser as
aforesaid shall be sufficient discharge to such purchaser from all obligations
to see to the proper application of the purchase money according to the trusts
aforesaid.

     (e) Upon any sale made under or by virtue of this Mortgage, whether made by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof and in lieu of paying cash therefor may make settlement for the purchase
price by crediting upon the indebtedness secured hereby, the net sales price
after deducting therefrom the expenses of the sale and the costs of the action
and any other sums which Mortgagee is authorized to deduct under this Mortgage.
Mortgagee, upon so acquiring the Mortgaged Property, or any part thereof, shall
be entitled to hold, lease, rent, operate, manage and sell the same in any
manner provided by applicable laws.

     (f) In the event of any sale made under or by virtue of this Mortgage
(whether made by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale), the indebtedness secured hereby if not previously due and
payable, and all other sums required to be paid by Mortgagor pursuant to this
Mortgage, immediately thereupon shall, anything in the Note, the Loan Agreement
or in this Mortgage to the contrary notwithstanding, become due and payable.

     SECTION II.3. (a) Upon the occurrence of an Event of Default then, upon
written demand of Mortgagee, Mortgagor will pay to Mortgagee the entire
indebtedness secured hereby, and

                                       20
<PAGE>   22
after the happening of said Event of Default will also pay to Mortgagee interest
at the default rate set forth in the Note or Loan Agreement, and also pay all
other sums required to be paid by Mortgagor pursuant to any provision of this
Mortgage, and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection incurred by Mortgagee hereunder
including reasonable compensation to Mortgagee, its agents, attorneys and
counsel (including, but not limited to, fees and costs pursuant to 11 U.S.C.).
In the event Mortgagor shall fail forthwith to pay such amounts upon such
demand, Mortgagee, in its own name, shall be entitled and empowered to institute
any action or proceedings at law or in equity for the collection of the amounts
so due and unpaid, and may prosecute any such action or proceedings to judgment
or final decree, and may enforce any such judgment or final decree against
Mortgagor and collect, out of the property of Mortgagor wherever situated, as
well as out of the Mortgaged Property, in the manner provided by law, the moneys
adjudged or decreed to be payable.

     (b) Mortgagee shall, if permitted by law, be entitled to recover judgment
as aforesaid either before or after or during the pendency of any proceedings
for the foreclosure of the lien and provisions of this Mortgage. The right of
Mortgagee to recover such judgment shall not be affected by any entry or sale
hereunder, or by the exercise of any other right, power or remedy for the
enforcement of the provisions of this Mortgage, or the foreclosure of the lien
hereof. In the event of a sale of the Mortgaged Property, and of the application
of the proceeds of sale to the payment of the indebtedness secured hereby,
Mortgagee shall be entitled to enforce payment of, and to receive the entire
indebtedness secured hereby and to enforce payment of all charges, payments and
costs due under this Mortgage, and shall be entitled to recover judgment for any
sums due under the Note or this Mortgage remaining unpaid, with interest at the
default rate set forth in the Note or Loan Agreement. In case there shall be
pending proceedings for the bankruptcy or liquidation of assets or for the
reorganization of Mortgagor under the Federal bankruptcy laws or any other
applicable law, or in case a receiver or mortgagee shall have been appointed for
the property of Mortgagor or in case of any other similar judicial proceedings
relative to Mortgagor, or to the creditors or property of Mortgagor, Mortgagee
shall be entitled and empowered to prove against Mortgagor the whole amount of
the indebtedness secured

                                       21
<PAGE>   23
hereby to the full amount thereof, and all other payments, charges and costs due
under this Mortgage, without deducting therefrom any proceeds obtained from the
sale of the whole or any part of the Mortgaged Property, provided, however, that
in no event shall Mortgagee receive from the aggregate amount of the proceeds of
the sale of the Mortgaged Property and the distribution from the estate of
Mortgagor an amount greater than the entire amount secured hereby and such other
payments, charges and costs.

     (c) No recovery of any judgment by Mortgagee and no levy of an execution
under any judgment upon the Mortgaged Property or upon any other property of
Mortgagor shall affect in any manner or to any extent, the lien of this Mortgage
upon the Mortgaged Property or any part thereof, or any liens, rights, powers or
remedies of Mortgagee hereunder, but such liens, rights powers and remedies of
Mortgagee shall continue unimpaired as before.

     (d) Any moneys thus collected by Mortgagee under this Section 2.03 shall be
applied by Mortgagee in accordance with the provisions of subsection 2.02(c).

     SECTION II.4. After the occurrence of any Event of Default by Mortgagor
under this Mortgage Mortgagor hereby consents to the appointment of a receiver
or receivers of the Mortgaged Property and of all the earnings, revenues, rents,
issues, profits and income thereof. After the occurrence of any such Event of
Default and during its continuance, Mortgagee shall be entitled, as a matter of
right, if it shall so elect, without the giving of notice to any other party and
without regard to the adequacy or inadequacy of any security for the
indebtedness secured hereby, forthwith either before or after declaring the
entire indebtedness secured hereby to be due and payable to the appointment of
such a receiver or receivers. Such receiver, or Mortgagee or its employees, may
enter upon, possess, manage, operate, dispose of, and contract to dispose of the
Mortgaged Property or any part thereof; take custody of all accounts; negotiate
with governmental authorities with respect to the Mortgaged Property's
environmental compliance and remedial measures; take any action necessary to
enforce compliance with any Act, including but not limited to spending rents to
abate the problem; make, terminate, enforce or modify leases of the Mortgaged
Property upon such terms and conditions as Mortgagee deems proper;

                                       22
<PAGE>   24
contract for goods and services, hire agents, employees, and counsel, make
repairs, alterations, and improvements to the Mortgaged Property necessary, in
Mortgagee's judgment, to protect or enhance the security hereof; incur the risks
and obligations ordinarily incurred by owners of property (without any personal
obligation on the part of the receiver); and/or take any and all other actions
which may be necessary or desirable to comply with Mortgagor's obligations
hereunder and under the Note and Loan Agreement. All sums realized by Mortgagee
under this subparagraph, less all costs and expenses incurred by it under this
subparagraph, including reasonable and documented attorneys' fees, and less such
sums as Mortgagee deems appropriate as a reserve to meet future expenses under
the subparagraph, shall be applied on any indebtedness secured hereby in such
order as Mortgagee shall determine. Neither application of said sums to said
indebtedness, nor any other action taken by Mortgagee under this subparagraph
shall cure or waive any Event of Default or notice of default hereunder, or
nullify the effect of any such notice of default. Mortgagee, or any employee or
agent of Mortgagee, or a receiver may take any action or proceeding hereunder
without regard to (a) the adequacy of the security for the indebtedness secured
hereunder, (b) the existence of a declaration that the indebtedness secured
hereby has been declared immediately due and payable, or (c) the filing or
serving of a notice of default.

         (i) With or without notice, and without releasing Mortgagor from any
obligation hereunder, to cure any default of Mortgagor and, in connection
therewith, Mortgagee or its agents, acting by themselves or through a receiver,
may enter upon the Mortgaged Property or any part thereof and perform such acts
and things as Mortgagee deems necessary or desirable to inspect, investigate,
assess, and protect the security hereof, including without limitation of any of
its other rights: (a) to obtain a court order to enforce Mortgagee's right to
enter and inspect the Mortgaged Property to which the decision of Mortgagee as
to whether there exists a release or threatened release of a Hazardous
Substances onto the Mortgaged Property shall be deemed reasonable and conclusive
as between the parties hereto; and (b) to have a receiver appointed to enforce
Mortgagee's right to enter and inspect the Mortgaged Property for Hazardous
Substances. All costs and expenses incurred by Mortgagee with respect to the
audits, tests, inspections, and examinations which Mortgagee or its

                                       23
<PAGE>   25
agents or employees may conduct, including the fees of the engineers,
laboratories, contractors, consultants, and attorneys, shall be paid by
Mortgagor. All costs and expenses incurred by Mortgagee pursuant to this
subparagraph (including without limitation court costs, consultant fees and
reasonable and documented attorneys' fees, whether incurred in litigation or not
and whether before or after judgment) shall bear interest at the default rate
set forth in the Note or Loan Agreement from the date they are incurred until
said sums have been paid.

         (ii) To waive its lien against the Mortgaged Property or any portion
thereof, whether fixtures or personal property, to the extent such property is
found to be environmentally impaired and to exercise any and all rights and
remedies of an unsecured creditor against Mortgagor and all of Mortgagor's
assets and property for the recovery of any deficiency and Environmental Costs,
including, but not limited to, seeking an attachment order. As between Mortgagee
and Mortgagor, Mortgagor shall have the burden of proving that Mortgagor or any
related party (or any affiliate or agent of Mortgagor or any related party) was
not in any way negligent in permitting the release or threatened release of the
hazardous substances. Mortgagor acknowledges and agrees that notwithstanding any
term or provision contained herein or in the Loan Documents, all judgments and
awards entered against Mortgagor shall be exceptions to any nonrecourse or
exculpatory provision of the Loan Documents or contained herein, and Mortgagor
shall be fully and personally liable for all judgments and awards entered
against Mortgagor hereunder and such liability shall not be limited to the
original principal amount of the obligations secured by this Mortgage and
Mortgagor's obligations shall survive the foreclosure, deed in lieu of
foreclosure, release, reconveyance, or any other transfer of the Mortgaged
Property or this Mortgage. For the purposes of any action brought under this
subparagraph, Mortgagor hereby waives the defense of laches and any applicable
statute of limitations.

         (iii) Nothing contained herein shall be construed to limit any and all
rights that Mortgagee has at law or pursuant hereto.

     SECTION II.5. No remedy herein conferred upon or reserved to Mortgagee is
intended to be exclusive of any other

                                       24
<PAGE>   26
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. No delay or omission of
Mortgagee to exercise any right or power occurring upon the Event of Default
shall impair any such right or power or shall be construed to be a waiver
thereof or an acquiescence therein; and every power and remedy given by this
Mortgage to Mortgagee may be exercised from time to time and as often as may be
deemed expedient by Mortgagee. Nothing in this Mortgage or in the Note or Loan
Agreement shall affect the obligation of Mortgagor to pay the principal of,
interest on, and Early Termination Fee payable pursuant to, the Note in the
manner and at the time and place therein respectively expressed.

     SECTION II.6. To the extent permitted by law, Mortgagor will not at any
time insist upon, or plead, or in any manner whatever claim or take any benefit
or advantage of, any stay or extension or moratorium law, any exemption from
execution or sale of the Mortgaged Property or any part thereof, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of this Mortgage; nor claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the
marshalling of the Mortgaged Property or on the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior or subsequent to any sale or
sales thereof which may be made pursuant to any provision herein, or pursuant to
the decree, judgment or order of any court of competent jurisdiction; nor, after
any such final sale or sales, claim or exercise any right under any statute or
otherwise, to redeem the property so sold or any part thereof; and Mortgagor
hereby expressly waives all benefit or advantage of any such law or laws, and
covenants not to hinder, delay or impede the execution of any power herein
granted or delegated to Mortgagee, but to suffer and permit the execution of
every power as though no such law or laws had been made or enacted. Mortgagor
hereby waives the right to require any sale to be made in parcels, or the right
to select parcels to be so sold, and there shall be no requirement for
marshalling of assets. Mortgagor hereby further waives any rights it may have
under applicable law relating to the prohibition of the obtaining of a
deficiency judgment by Mortgagee against Mortgagor.

     SECTION II.7. During the continuance of any Event of

                                       25
<PAGE>   27
Default and pending the exercise by Mortgagee of its right to exclude Mortgagor
from all or any part of the Premises, Mortgagor agrees to pay the fair and
reasonable rental value for the use and occupancy of the Mortgaged Property for
such period and upon default of any such payment, will vacate and surrender
possession of the Premises to Mortgagee or to a receiver, if any, and in default
thereof may be evicted by any summary action or proceeding for the recovery or
possession of Premises for non-payment of rent, however designated.

     SECTION II.8. Without affecting the personal liability of any person, firm,
corporation, or other entity, including Mortgagor (other than any person
released pursuant hereto), for the payment of the indebtedness secured hereby,
and without affecting the lien of this Mortgage for the full amount of the
indebtedness remaining unpaid upon any property not reconveyed pursuant hereto,
Mortgagee is authorized and empowered as follows: Mortgagee may, at any time and
from time to time, either before or after the maturity of the Note or the
expiration of the Loan Agreement and without notice: (a) release any person
liable for the payment of any of the indebtedness, (b) make any agreement
extending the time or otherwise altering the terms of payment of any of the
indebtedness, (c) accept additional security therefor of any kind, (d) release
any property, real or personal, securing the indebtedness. Mortgagee may,
without liability therefor and without notice, at any time and from time to time
so long as the lien or charge hereof shall subsist: (a) consent to the making of
any map or plat of the Land, (b) join in granting any easement thereon or in
creating any covenants restricting use or occupancy thereof, (c) reconvey,
without warranty, any part of the Mortgaged Property, (d) join in any extension
agreement or in any agreement subordinating the lien or charge hereof.

     SECTION II.9. This Mortgage constitutes a Security Agreement under the laws
of the State of New York so that Mortgagee shall have and may endorse a security
interest in any or all of the Mortgaged Property which may or might now or
hereafter be or be deemed to be personal property, fixtures or property other
than real estate (collectively, "Personal Property") and Mortgagor agrees to
execute, as debtor, such financing statement or statements as Mortgagee may now
or hereafter reasonably request in order that such security interest or
interests may be perfected pursuant to such laws.

                                       26
<PAGE>   28
This Mortgage further constitutes a fixture filing under Sections 9-313 and
9-402(6) of the New York Uniform Commercial Code, as amended or recodified from
time to time; provided, however that the execution and/or filing hereof does not
imply that the items of Personal Property included in the Mortgaged Property are
or are to become fixtures. The filing hereof as a fixture filing is intended to
protect the parties from unwarranted assertions by third parties.

     Notwithstanding any release of any or all of the property included in the
Premises which is deemed "real property", any proceedings to foreclose this
Mortgage, or its satisfaction of record, the terms hereof shall survive as a
security agreement with respect to the security interest created hereby and
referred to above until the repayment or satisfaction in full of the obligations
of Mortgagor as are now or hereafter evidenced by the Note.

     SECTION II.10. During the continuance of any Event of Default, Mortgagee
shall have all of the rights and remedies of a secured party under the Uniform
Commercial Code (the "Code") of the State of New York, and specifically the
right to direct notice and collections of any obligation owing to Mortgagor by
any lessee of the Premises. In addition to its rights to foreclose this
Mortgage, Mortgagee shall have the right to sell the Personal Property or any
part thereof, or any further, or additional, or substituted Personal Property,
at one or more times, and from time to time, at public sale or sales or at
private sale or sales, on such terms as to cash or credit, or partly for cash
and partly on credit, as Mortgagee may deem proper. Mortgagee shall have the
right to become the purchaser at any such public sale or sales, free and clear
of any and all claims, rights of equity of redemption in Mortgagor, all of which
are hereby waived and released. Mortgagor shall not be credited with the amount
of any part of such purchase price, unless, until and only to the extent that
such payment is actually received in cash. Notice of public sale, if given,
shall be sufficiently given, for all purposes, if published as required by the
Code. The net proceeds of any sale of the Personal Property which may remain
after the deduction of all costs, fees and expenses incurred in connection
therewith, including, but not limited to, all advertising expenses, broker's or
brokerage commissions, documentary stamps, recording fees, foreclosure costs,
stamp taxes and counsel fees, shall be credited by Mortgagee against

                                       27
<PAGE>   29
the liabilities, obligations and indebtedness of Mortgagor to Mortgagee secured
by this Mortgage and evidenced by the Note. Any portion of the Personal Property
which may remain unsold after the full payment, satisfaction and discharge of
all of the liabilities, obligations and indebtedness of Mortgagor to Mortgagee
shall be returned to the respective parties which delivered the same to
Mortgagee. If at any time Mortgagor or any other party shall become entitled to
the return of any of the Personal Property hereunder, any transfer or assignment
thereof by Mortgagee shall be, and shall recite that the same is, made wholly
without representation or warranty whatsoever by, or recourse whatsoever against
Mortgagee.

     SECTION II.11. All rights, remedies and powers provided by Sections
2.01-2.10 hereof may be exercised only to the extent not expressly inconsistent
with the Loan Agreement and/or the other Loan Documents, and only to the extent
that the exercise thereof does not violate any applicable provision of law in
the jurisdiction in which the Premises are located, and all such provisions are
intended to be subject to all applicable provisions of law which may be
controlling in such jurisdiction and to be limited to the extent necessary so
that they will not render this Mortgage invalid, illegal or unenforceable under
the provisions of any applicable law.

                                   ARTICLE III

                                  MISCELLANEOUS

     SECTION III.1. In the event any one or more of the provisions contained in
this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Mortgage, but this Mortgage shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

     SECTION III.2. All notices or demands by any party relating to this
Mortgage or any other agreement entered into in connection herewith shall be
sent in the form and manner set forth in the Loan Agreement.

     SECTION III.3. Intentionally Deleted.

                                       28
<PAGE>   30
     SECTION III.4. All of the grants, covenants, terms, obligations, provisions
and conditions herein contained shall run with the land and shall apply to, bind
and inure to the benefit of, the successors and assigns of Mortgagor and
Mortgagee.

     SECTION III.5. Intentionally Deleted.

     SECTION III.6. It shall be lawful for Mortgagee, at its election, upon the
occurrence of an Event of Default, to commence an action for the foreclosure of
this Mortgage and to proceed thereon to judgment and execution for the recovery
of all sums payable by Mortgagor pursuant to the terms of this Mortgage without
further stay, any law, usage or custom to the contrary notwithstanding.

     SECTION III.7. Notwithstanding the appointment of any receiver, liquidator
or trustee of Mortgagor, or of any of its property, or of the Mortgaged
Property, or any part thereof, Mortgagee shall be entitled to retain possession
and control of all property now or hereafter held under this Mortgage.

     SECTION III.8. If Mortgagor shall default in the payment of any sums due
pursuant to the terms of the Note, the Loan Agreement, or this Deed of Trust,
and the same shall constitute an Event of Default, then such Event of Default
shall be, and be deemed to be, an attempt by Mortgagor to avoid the Early
Termination Fee payable by Mortgagor pursuant to the terms of the Loan Agreement
and consequently, upon such Event of Default Mortgagee shall be entitled to
collect such Early Termination Fee from Mortgagor with the same effect as if
Mortgagor had voluntarily elected to prepay the principal sum evidenced by the
Note or the Loan Agreement.

     SECTION III.9. Mortgagor hereby waives and relinquishes unto, and in favor
of Mortgagee, all benefit under all laws, now in effect or hereafter passed, to
relieve Mortgagor in any manner from the obligations assumed and the obligation
for which this Mortgage is security or to reduce the amount of the said
obligation to any greater extent than the amount actually paid for the Mortgaged
Property, in any judicial proceedings upon the said obligation, or upon this
Mortgage.

     SECTION III.10. Neither Mortgagor nor any other person now or hereafter
obligated for payment for all or any part of

                                       29
<PAGE>   31
the indebtedness secured hereby shall be relieved of such obligation by reason
of the failure of Mortgagee to comply with any request of Mortgagor or of any
other person so obligated to take action to foreclose on this Mortgage or
otherwise enforce any provisions hereof or of the Note or under the Loan
Agreement or by reason of the release, regardless of consideration, of all or
any part of the security held for the indebtedness secured hereby.

     SECTION III.11. By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Mortgagee pursuant to this Mortgage,
including (but not limited to) any certificate, balance sheet, statement of
profit and loss or other financial statement, survey, appraisal or insurance
policy, Mortgagee shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or representation with respect thereto
by Mortgagee.

     SECTION III.12. Intentionally Deleted.

     SECTION III.13. Intentionally Deleted.

     SECTION III.14. Intentionally Deleted.

     SECTION III.15. EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 2.09 AND 2.10
HEREOF, THE CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS GRANTED BY THIS
MORTGAGE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND IN ALL OTHER
RESPECTS THIS MORTGAGE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

     SECTION III.16. Time is of the essence of all Mortgagor's obligations
hereunder.

                                       30
<PAGE>   32
     SECTION III.17. Simultaneously with, and in addition to, the execution of
this Mortgage, Mortgagor, and/or related or affiliated entities of Mortgagor,
has executed and delivered as security for the Note and Loan Agreement a
mortgage or deed of trust on parcels of property which may or may not be outside
the boundaries of this county. Mortgagor agrees that the occurrence of an Event
of Default hereunder, or under any of such other mortgages or deeds of trust,
shall be an Event of Default under each and every one of such mortgages and
deeds of trust, including this Mortgage, permitting Mortgagee to proceed against
any or all of the property comprising the Mortgaged Property or against any
other security for the Note and the Loan Agreement in such order as Mortgagee,
in its sole and absolute discretion may determine. Mortgagor hereby waives, to
the extent permitted by applicable law, the benefit of any statute or decision
relating to the marshalling of assets which is contrary to the foregoing.
Mortgagee shall not be compelled to release or be prevented from foreclosing
this instrument or any other instrument securing the Note and/or the Loan
Agreement unless all indebtedness evidenced by the Note and/or the Loan
Agreement and all items hereby secured shall have been paid in full and
Mortgagee shall not be required to accept any part or parts of any property
securing the Note and the Loan Agreement, as distinguished from the entire whole
thereof, as payment of or upon the Note and/or the Loan Agreement to the extent
of the value of such part or parts, and shall not be compelled to accept or
allow any apportionment of the indebtedness evidenced by the Note and/or the
Loan Agreement to or among any separate parts of said property.

     SECTION 3.18. The lien created by this Mortgage shall continue until the
"last dollar" owing by Mortgagor to Mortgagee and the other lenders pursuant to
the Loan Agreement has been paid in full.

     IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be executed as of
the day and year first above written.

                                    "MORTGAGOR"

                                    TWIN LABORATORIES INC.,
                                    a Utah corporation

                                       31
<PAGE>   33
                                    By:
                                       -----------------------------------------
                                    Name:
                                         ---------------------------------------
                                    Its:
                                        ----------------------------------------

ATTEST:

--------------------------------
Printed Name:
             -------------------

                                       32
<PAGE>   34
STATE OF ________________  )
                           )
COUNTY OF _______________  )

On the ___ day of ________in the year ____ before me, the undersigned,
personally appeared _______________, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual(s) whose name(s) is
(are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individuals(s) acted, executed the instrument.

__________________________________________
(Signature and office of individual taking
acknowledgment)

                                       33
<PAGE>   35
                                    EXHIBIT A

                                       34<PAGE>   1
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

BUCHALTER, NEMER, FIELDS & YOUNGER
601 S. FIGUEROA
SUITE 2400
LOS ANGELES, CALIFORNIA  90017
ATTN:  JOSEPH VARGAS, ESQ.

                      THIS DOCUMENT TO BE RECORDED BOTH AS
            A DEED OF TRUST AND FINANCING STATEMENT (FIXTURE FILING)

                 THIS DOCUMENT SECURES OBLIGATIONS WHICH CONTAIN
                   PROVISIONS FOR A VARIABLE RATE OF INTEREST

STATE OF ARIZONA               )
                               ) ss.
COUNTY OF MARICOPA             )

                     DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT and
FINANCING STATEMENT (FIXTURE FILING) made this 29th day of March, 2001, between
HEALTH FACTORS INTERNATIONAL, INC., a Delaware corporation ("Trustor") having an
office at 150 Motor Parkway, Hauppauge, New York 11788, as trustor,
and CHICAGO TITLE INSURANCE COMPANY, as trustee, having an office at 700 South
Flower Street, Suite 900, Los Angeles, California 90017 ("Trustee") and THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation, as agent, having an office
at 300 South Grand Avenue, Third Floor, Los Angeles, California 90071, Attn:
Regional Manager.

                                   WITNESSETH

                                       1
<PAGE>   2
                  THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTION
47-9313 OF THE UNIFORM COMMERCIAL CODE OF THE STATE OF

                                       2
<PAGE>   3
ARIZONA. TO THE EXTENT THE GOODS ARE FIXTURES UNDER THE LAWS OF THE STATE OF
ARIZONA. THE FIXTURES ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY LOCATED
IN THE COUNTY OF MARICOPA, STATE OF ARIZONA, MORE PARTICULARLY DESCRIBED ON
EXHIBIT A ATTACHED HERETO, COMMONLY KNOWN BY THE STREET ADDRESSES: 405 and 429
SOUTH SIESTA LANE, TEMPE, ARIZONA. THE NAME OF THE RECORD OWNER OF THE REAL
PROPERTY IS HEALTH FACTORS INTERNATIONAL, INC. THIS INSTRUMENT IS ALSO TO BE
INDEXED IN THE INDEX OF FINANCING STATEMENTS.1

                  FOR THE PURPOSE OF SECURING (a) the payment of an indebtedness
in an aggregate principal amount of Sixty Million Dollars ($60,000,000), to be
paid in accordance with the terms and with interest as set forth in that certain
Term Loan Promissory Note, and that certain Revolving Credit Note (hereinafter
referred to as the "Notes"), of even date herewith, made by Trustor and others
to the order of The CIT Group/Business Credit, Inc., as agent (The CIT
Group/Business Credit, Inc., as initial agent and any successor agent appointed
pursuant to the Loan Agreement, as hereinafter defined, being hereinafter
referred to as "Beneficiary") and all modifications, extensions and/or renewals
thereof, (b) the payment and performance of all indebtedness and obligations of
Trustor arising under this Deed of Trust, and other documents executed by
Trustor in connection herewith, and (c) payment of any money advanced by
Beneficiary to Trustor, or its successors, with interest thereon, evidenced by
additional notes (indicating that they are so secured) or by

----------

1                 NOTE: If this Instrument or the Notes which this Instrument
                  secures are in your possession, DO NOT DESTROY THEM. State law
                  may require that this Instrument and the Notes be presented to
                  the Trustee for cancellation in order to obtain a
                  reconveyance. The reconveyance must be recorded in the
                  counties and/or parishes in which the land described in
                  Exhibit A is located.

                                       3
<PAGE>   4
endorsement of the original notes, executed by Trustor or its successor, and (d)
the payment and performance of all other indebtedness and obligations of Trustor
arising under that certain Financing Agreement of even date herewith to which
inter alia Beneficiary and Trustor are parties (the "Loan Agreement": initially
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Loan Agreement) including all Advances up to a maximum principal amount
of $60,000,000.00 and all interest accruing thereon and all modifications,
extensions and/or renewals thereof, and in consideration of the sum of ten
dollars ($10.00) in hand paid by Beneficiary to Trustor, and for other good and
valuable consideration, Trustor has granted, mortgaged, bargained, sold,
alienated, enfeoffed, released, conveyed and confirmed, and by these presents
does grant, mortgage, bargain, sell, alienate, enfeoff, release, convey and
confirm unto the Trustee, in trust, WITH POWER OF SALE, all its estate, right,
title and interest in, to and under any and all of the property located in the
City of Tempe, County of Maricopa, State of Arizona, and more particularly
described in Exhibit A attached hereto and made a part hereof, including all
easements, rights, privileges, tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining, and all of the estate, right,
title, interest, claim, demand, reversion or remainder whatsoever of Trustor
therein or thereto, either at law or in equity, in possession or expectancy, now
or hereafter acquired, including, without limitation, all and singular the ways,
waters, water courses, water rights and powers, liberties, privileges, sewers,
pipes, conduits, wires and other facilities furnishing utility or other services
to the property (collectively, the "Land");

                  TOGETHER with all of the right, title and interest of Trustor
in and to all buildings, structures and improvements now or hereafter erected on
the Land including all plant equipment, apparatus, machinery and fixtures of
every kind and nature whatsoever now or hereafter located on or forming part of
said buildings, structures and improvements (collectively, the "Improvements";
the Land and Improvements being hereinafter collectively referred to as the
"Premises");

                  TOGETHER with all of the right, title and interest of Trustor
in and to the land lying in the bed of any street, road, highway or avenue in
front of or adjoining the Premises;

                                       4
<PAGE>   5
                  TOGETHER with all right, title and interest of Trustor in any
and all award and awards heretofore made or hereafter to be made by any
governmental authorities to the present and all subsequent owners of the
Premises which may be made with respect to the Premises as a result of the
return of excess taxes paid on the Mortgaged Property, the exercise of the right
of eminent domain, the alteration of the grade of any street or any other injury
to or decrease of value of the Premises, which said award or awards are hereby
collaterally assigned to Beneficiary and Beneficiary, at its option, is hereby
authorized, directed and empowered to collect and receive the proceeds of any
such award or awards from the authorities making the same and to give proper
receipts and acquittances therefor, and to apply the same as hereinafter
provided; and Trustor hereby covenants and agrees to and with Beneficiary, upon
request by Beneficiary, to make, execute and deliver, at Trustor's expense, any
and all assignments and other instruments sufficient for the purpose of
assigning the aforesaid award or awards to Beneficiary free, clear and
discharged of any and all encumbrances of any kind or nature whatsoever;

                  TOGETHER with all of the right, title and interest of Trustor
in all goods, equipment, machinery, furniture, furnishings, fixtures,
appliances, inventory, building materials, chattels and articles of personal
property (other than personal property which is or at any time has become
Hazardous Substances, as hereinafter defined), including any interest therein,
now or at any time hereafter affixed to, attached to, or used in any way in
connection with or to be incorporated at any time into the Premises, or placed
on any part thereof but not attached or incorporated thereto, together with any
and all replacements thereof, appertaining and adapted to the complete and
compatible use, enjoyment, occupancy, operation or improvement of the Premises
(collectively, the "Chattels");

                  TOGETHER with all right, title and interest of Trustor in
leases of the Premises or the Chattels or any part thereof now or hereafter
entered into and all right, title and interest of Trustor thereunder, including,
without limitation, cash or securities deposited thereunder to secure
performance by the lessees of their obligations thereunder (whether such cash or
securities are to be held until the expiration of the terms of

                                       5
<PAGE>   6
such leases or applied to one or more of the installments of rent coming due
immediately prior to the expiration of such terms) and all rights to all
insurance proceeds and unearned premiums arising from or relating to the
Premises and all other rights and easements of Trustor now or hereafter existing
pertaining to the use and enjoyment of the Premises and all right, title and
interest of Trustor in and to all declarations of covenants, conditions and
restrictions as may affect or otherwise relate to the Premises;

                  TOGETHER with all right, title and interest of Trustor in all
sales agreements, deposit receipts, escrow agreements and other ancillary
documents and agreements entered into with respect to the sale to any purchasers
of any part of the Premises, and all deposits and other proceeds thereof;

                  TOGETHER with all right, title and interest of Trustor in all
permits, plans, licenses, specifications, subdivision rights, tentative tract
maps, final tract maps, security interests, contracts, contract rights or other
rights as may affect or otherwise relate to the Premises;

                  TOGETHER with all rights of Trustor in or to any fund, program
or trust monies and any reimbursement therefrom directly or indirectly
established, maintained or administered by any governmental authority or any
other individual or entity which is designed to or has the effect of providing
funds (whether directly or indirectly or as reimbursement) for the repair or
replacement of storage tanks (whether above or below ground) located on the
Premises or the remediation or cleanup of any spill, leakage or contamination
from any such tank or resulting from the ownership, use or maintenance of any
such tank or to compensate third parties for any personal injury or property
damage;

                     TOGETHER with all right, title and interest of Trustor in
all rents, issues, profits, revenues, income and other benefits to which Trustor
may now or hereafter be entitled from the Premises or the Chattels (which
Premises, titles, interests, awards, Chattels, easements, rents, income,
benefits, ways, waters, rights, powers, liberties, privileges, utilities,
tenements, hereditaments, appurtenances, reversions, remainders, rents, issues,
profits, estate, property, possession, claims and

                                       6
<PAGE>   7
demands, are hereinafter collectively referred to as the "Mortgaged Property":
the foregoing notwithstanding, the Mortgaged Property shall not include, and no
security interest, lien or pledge granted hereunder shall extend or attach to;
(i) Trustor's rights (other than rights to payment) under any license agreements
or lease agreements existing as of the date hereof, or any leases of real
property or leases of motor vehicles or other personal property now or hereafter
existing that prohibit the grant of a security interest or lien therein or
pledge to the extent, and only to the extent, that the terms prohibiting the
grant of such security interest or lien or pledge have not been waived or
consented to in writing by the licensor, lessor or other necessary person or
entity under such agreement; or (ii) Trustor's rights in and to specific items
of Equipment which are subject to liens permitted by clause (a) or (b) of the
definition of Permitted Encumbrances, as defined in the Loan Agreement, or
Trustor's rights under any agreement granting any such liens to the extent, and
only to the extent, that (A) the agreements granting such liens prohibit the
grant of a security interest in the Trustor's rights in such Equipment or in
such agreements and (B) the terms prohibiting the grant of such security
interest have not been waived or consented to in writing by the secured party or
other necessary person or entity under such agreement.)

                  TO HAVE AND TO HOLD the Mortgaged Property unto the Trustee,
its successors and assigns forever.

                  IN FURTHERANCE OF THE FOREGOING GRANTS (INCLUDING GRANTS OF
SECURITY INTERESTS), BARGAINS, SALES, ASSIGNMENTS, TRANSFERS, MORTGAGES AND
CONVEYANCES, AND TO PROTECT THE PREMISES AND THE SECURITY GRANTED BY THIS
INSTRUMENT, DEBTOR HEREBY WARRANTS, REPRESENTS, COVENANTS AND AGREES AS FOLLOWS:

                                    ARTICLE I

                  And Trustor further covenants with the Trustee and Beneficiary
as follows:

                  SECTION I.1. Trustor has good title to the Premises in fee
simple subject to no lien, charge, or encumbrance except Permitted Encumbrances;
that it owns the Chattels free and clear

                                       7
<PAGE>   8
of liens and claims except Permitted Encumbrances; that this Deed of Trust is
and will remain a valid and enforceable lien on the Mortgaged Property subject
only to the Permitted Encumbrances exceptions referred to above. Trustor will
preserve such title, and will forever preserve, warrant and defend the same unto
the Trustee and Beneficiary, and will forever preserve, warrant and defend the
validity and such priority of the lien hereof against the claims of all persons
and parties whomsoever.

                  SECTION I.2. Trustor will pay all filing, registration or
recording fees, all federal, state, county and municipal stamp taxes and other
fees, taxes, duties, imposts, assessments (or contest in good faith, by
appropriate proceedings or other appropriate actions which are sufficient to
prevent imminent foreclosure of such liens and with respect to which adequate
reserves or other appropriate provisions are being maintained by each of the
Companies, as applicable, in accordance with GAAP) and all other charges
incident to, arising out of or in connection with the preparation, execution,
delivery and enforcement of the Notes, the Loan Agreement, this Deed of Trust,
any deed of trust supplemental hereto, any security instrument with respect to
the Chattels or any instrument of further assurance.

                  SECTION I.3. Intentionally Deleted.

                  SECTION I.4. Intentionally Deleted.

                  SECTION I.5. All right, title and interest of Trustor in and
to all extensions, improvements, betterments, renewals, substitutes and
replacements of, and all additions and appurtenances to, the Mortgaged Property,
hereafter acquired by, or released to, or constructed, assembled or placed by
Trustor on the Premises, and all conversions of the security constituted
thereby, immediately upon such acquisition, release, construction, assembling,
placement or conversion, as the case may be, and in each such case, without any
further grant, conveyance, assignment or other act by Trustor, shall become
subject to the lien and security interest of this Deed of Trust as fully and
completely, and with the same effect, as though now owned by Trustor and
specifically described in the granting clause hereof.

                                       8
<PAGE>   9
                  SECTION I.6. Trustor will pay from time to time when the same
shall become due, all lawful claims and demands of mechanics, materialmen,
laborers, and others which, if unpaid, might result in, or permit the creation
of, a lien (other than a Permitted Encumbrance) on the Mortgaged Property or any
part thereof, or on the revenues, rents, issues, income and profits arising
therefrom and in general will do or cause to be done everything necessary so
that the lien and security interest hereof shall be fully preserved, at the cost
of Trustor, without expense to Beneficiary.

                  SECTION I.7. Intentionally Deleted.

                  SECTION I.8. In the event of the passage, after the date of
this Deed of Trust, of any law of the State of Arizona deducting from the value
of the Mortgaged Property for the purpose of taxing the amount of any lien
thereon, or changing in any way the laws now in force for the taxation of deeds
of trust, or debts secured thereby, for state or local purposes, or the manner
of operation of any such taxes which has the effect of imposing payment of the
whole or any portion of such taxes against the Mortgaged Property upon
Beneficiary, so as to adversely affect the interest of Beneficiary, then and in
such event, Trustor shall bear and pay the full amount of such taxes, provided
that if for any reason payment by Trustor of any such new or additional taxes
would be unlawful or if the payment thereof would constitute usury or render the
Notes, the Loan Agreement or the indebtedness secured hereby wholly or partially
usurious under any of the terms or provisions of the Notes, the Loan Agreement,
or this Deed of Trust, or otherwise, Beneficiary may, at its option, upon thirty
(30) days' written notice to Trustor, (i) declare the whole indebtedness secured
by this Deed of Trust, with interest thereon, to be immediately due and payable,
or (ii) pay that amount or portion of such taxes as renders the Notes, the Loan
Agreement, or the indebtedness secured hereby unlawful or usurious, in which
event Trustor shall concurrently therewith pay the remaining lawful non-usurious
portion or balance of said taxes.

                  SECTION I.9. In addition to restrictions contained in the Loan
Agreement, or except as may be expressly permitted under the Loan Agreement or
any other Loan Document, Trustor will not further encumber, sell, convey or
transfer any interest in, or

                                       9
<PAGE>   10
any part of, the Mortgaged Property (unless the same shall constitute a
Permitted Encumbrance). Any such encumbrance, sale, conveyance or transfer made
without Beneficiary's prior written consent shall be an Event of Default
hereunder.

                  SECTION I.10. Intentionally Deleted.

                  SECTION I.11. Intentionally Deleted.

                  SECTION I.12. If Trustor shall fail to perform any of the
covenants contained herein on its part to be performed within the time period
provided herein for such performance, and such failure shall continue for ten
(10) days after written notice thereof from Beneficiary to Trustor, Beneficiary
may, but shall not be required to, make advances to perform the same, or cause
the same to be performed, on Trustor's behalf, and all sums so advanced shall
bear interest, from and after the date advanced until repaid, at the lower of
(i) the maximum rate permitted by law or (ii) the Default Rate of Interest,
shall be a lien upon the Mortgaged Property and shall, at Beneficiary's option,
be added to the indebtedness secured hereby. Trustor will repay on demand all
sums so advanced on its behalf with interest at the rate herein set forth. This
Section 1.12 shall not be construed as preventing any default by Trustor in the
observance of any covenant contained in this Deed of Trust from constituting an
Event of Default hereunder.

                  SECTION I.13. Intentionally Deleted.

                  SECTION I.14. Trustor will not commit any waste at or with
respect to the Mortgaged Property. Trustor will, at all times, maintain the
Improvements and Chattels in good order and condition ordinary wear and tear
excepted and will promptly make, from time to time, all repairs, renewals,
replacements, additions and improvements in connection therewith which are
needful or desirable to such end, except as otherwise expressly permitted under
the Loan Agreement or any other Loan Document. Improvements shall not be
removed, demolished or materially altered, nor, except as otherwise expressly
permitted under the Loan Agreement or any other Loan Document, shall any
Chattels be removed without the prior written consent of Beneficiary, provided,
however, that if there shall exist an Event of Default, in addition to any
rights to remove or replace the Chattels under

                                       10
<PAGE>   11
the Loan Agreement or any Loan Document, Trustor may make appropriate
replacements of Chattels, free of superior title, liens and claims other then
Permitted Encumbrances, provided such replacements are promptly made and are of
a value or utility at least equal to the value or utility of the Chattels
removed.

                  SECTION I.15. Trustor will immediately notify Beneficiary of
the institution of any proceeding for the condemnation or taking by eminent
domain of the Mortgaged Property, or any portion thereof promptly after Trustor
obtains knowledge of same. The Trustee and Beneficiary may participate in any
such proceeding and Trustor from time to time will deliver to Beneficiary all
instruments requested by it to permit such participation. In the event of such
condemnation proceedings, or a conveyance in lieu of such taking, the award or
compensation payable is hereby assigned to and shall be paid to Beneficiary.
Beneficiary shall be under no obligation to question the amount of any such
award or compensation and may accept the same in the amount in which the same
shall be paid, but shall have no right to bind Trustor or to make settlement of
its claim, except to the extent of the interest of the Trustee and Beneficiary.
In any such condemnation proceedings the Trustee and Beneficiary may be
represented by counsel selected by Beneficiary. The proceeds of any award or
compensation so received after reimbursement of any reasonable and documented
expenses incurred by Beneficiary in connection with such proceedings, shall, at
the option of Beneficiary, be applied, without premium, to the repayment of the
Notes and/or the sums due under the Loan Agreement in such order as Beneficiary
may in its sole discretion elect (regardless of interest payable on the award by
the condemning authority), or to the cost of restoration of the Improvement or
Chattel so taken and other terms as shall be satisfactory to Beneficiary.

                  SECTION I.16. The assignment of rents, income and other
benefits (collectively, "rents") contained in the granting clause of this Deed
of Trust shall be fully operative without any further action on the part of
Trustor or Beneficiary and specifically Beneficiary shall be entitled, at its
option, to all rents from the Mortgaged Property whether or not Beneficiary
takes possession of the Mortgaged Property. Trustor hereby further grants to
Beneficiary the right (i) to enter upon and take possession of the Mortgaged
Property for the purpose of collecting the rents, (ii) to dispossess by the
usual summary

                                       11
<PAGE>   12
proceedings any tenant defaulting in the payment thereof to Beneficiary, (iii)
to let the Mortgaged Property or any part thereof, and (iv) to apply the rents,
after payment of all necessary charges and expenses, on account of the
indebtedness and other sums secured hereby. Such assignment and grant shall
continue in effect until the indebtedness and other sums secured hereby are
paid, the execution of this Deed of Trust constituting and evidencing the
irrevocable consent of Trustor to the entry upon and taking possession of the
Mortgaged Property by Beneficiary pursuant to such grant, whether or not sale or
foreclosure has been instituted. Neither the exercise of any rights under this
Section by Beneficiary nor the application of the rents to the indebtedness and
other sums secured hereby, shall cure or waive any Event of Default, or notice
of default hereunder or invalidate any act done pursuant hereto, but shall be
cumulative of all other rights and remedies.

                  The foregoing provisions hereof shall constitute an absolute
and present assignment of the rents from the Mortgaged Property, subject,
however, to the conditional permission given to Trustor to collect, receive and
use the rents until the occurrence of an Event of Default at which time such
conditional permission shall automatically terminate; and the existence or
exercise of such right of Trustor shall not operate to subordinate this
assignment, in whole or in part, to any subsequent assignment by Trustor
permitted under the provisions of this Deed of Trust, and any such subsequent
assignment by Trustor shall be subject to the rights of the Trustee and
Beneficiary hereunder. Without limiting the generality of the foregoing,
Beneficiary shall have all rights provided in Arizona Revised Statutes Section
33-702B.

                  SECTION I.17. (a) Trustor will not (i) except where the lessee
is in default thereunder, terminate or consent to the cancellation or surrender
of any lease of the Mortgaged Property or of any part thereof, now existing or
hereafter to be made or (ii) modify any such lease or give consent to any
assignment or subletting without Beneficiary's prior written consent (which
shall not be unreasonably withheld, conditioned or delayed), or (iii) accept
prepayments of any installments of rent or additional rent to be due under such
leases, except prepayments in the nature of security for the performance of the
lessee's

                                       12
<PAGE>   13
obligations thereunder, or (iv) enter into any lease prohibited under
the provisions of the Loan Agreement.

                    (b) Trustor will not execute any lease of all or a
substantial portion of the Mortgaged Property except for actual occupancy by the
lessee thereunder, and will at all times promptly and faithfully perform, or
cause to be performed, all of the material covenants, conditions and agreements
contained in all leases of the Mortgaged Property now or hereafter existing, on
the part of the lessor thereunder to be kept and performed. If any such lease
provides for the giving by the lessee of certificates with respect to the status
of such leases, Trustor shall exercise its right to request such certificates
within five (5) days of any demand therefor by Beneficiary.

                    (c) Trustor shall furnish to Beneficiary, within fifteen
(15) days after a request by Beneficiary to do so, a written statement
containing the names of all lessees for the Mortgaged Property, the term of
their respective leases, the spaces occupied, the rentals paid and any security
therefor.

                  SECTION I.18. Intentionally Deleted.

                  SECTION I.19. Intentionally Deleted.

                  SECTION I.20. Intentionally Deleted.

                  SECTION I.21. Intentionally Deleted.

                  SECTION I.22. Intentionally Deleted.

                  SECTION I.23. Intentionally Deleted.

                  SECTION I.24. Intentionally Deleted.

                  SECTION I.25. Intentionally Deleted.

                  SECTION I.26. Intentionally Deleted.

                  SECTION I.27. Intentionally Deleted.

                  SECTION I.28. Intentionally Deleted.

                                       13
<PAGE>   14
                  SECTION I.29. Intentionally Deleted.

                  SECTION I.30. Intentionally Deleted.

                  SECTION I.31. Intentionally Deleted.

                  SECTION I.32. Intentionally Deleted.

                  SECTION I.33. Intentionally Deleted.

                  SECTION I.34. Intentionally Deleted.

                  SECTION I.35. Intentionally Deleted.

                                   ARTICLE II

                         EVENTS OF DEFAULT AND REMEDIES

                  SECTION II.1. The occurrence of any one or more of the
following events shall constitute an event of default ("Event of Default")
hereunder:

                    (a) If Trustor shall default in the payment of (i) any
regular installment of interest and/or principal on the Notes within five (5)
business days of when the same shall have become due and payable, (ii) any other
payment of interest and/or principal due on the Notes within five (5) business
days of when the same shall become due and payable, whether at any stated
maturity or by acceleration or otherwise, or (iii) any other sums required to be
paid by Trustor pursuant to the Notes, the Loan Agreement, or this Deed of Trust
within five (5) business days of the date that such payments are therein or
herein required to be made; or

                    (b) If Trustor and/or Guarantor, if any, shall breach, or be
in default of, any of the covenants or provisions contained in this Deed of
Trust or of any chattel mortgage, other deed of trust, security agreement or
other document issued thereunder or in connection therewith or herewith and the
same shall not be cured within fifteen (15) days of the occurrence of such
breach; or

                                       14
<PAGE>   15
                    (c) If Trustor shall violate the provisions of Section 1.09
hereof; or

                    (d) If there shall be a termination, revocation or purported
revocation by any Guarantor under a Guaranty; or

                    (e) if there shall be an Event of Default under the Loan
Agreement.

                  Upon the occurrence of an Event of Default, and in every such
case:

                  I. During the continuance of any Event of Default, Beneficiary
personally, or by its agents or attorneys may enter into and upon all or any
part of the Mortgaged Property, and each and every part thereof, and may exclude
the party owning the beneficial interest in same, its agents and servants wholly
therefrom; and having and holding the same, may use, operate, manage and control
the Mortgaged Property for any lawful purpose and conduct the business thereof,
either personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, Beneficiary, at the expense
of Trustor, from time to time, either by purchase, repairs or construction, may
maintain and restore the Mortgaged Property, whereof it shall become possessed
as aforesaid, may complete the construction of the Improvements and in the
course of such completion may make such changes in the contemplated Improvements
as it may deem desirable; may insure or reinsure the same as provided in the
Loan Agreement, and likewise, from time to time, at the expense of Trustor,
Beneficiary may make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments and improvements to the Mortgaged Property
or any part thereof and thereon as it may deem advisable; and in every such case
Beneficiary shall have the right to manage and operate the Mortgaged Property,
possessed as aforesaid, and to carry on the business thereof and exercise all
rights and powers of the party owning such property with respect thereto either
in the name of such party or otherwise as it shall deem best; and Beneficiary
shall be entitled to collect and receive all earnings, revenues, rents, issues,
profits and income of the Mortgaged Property and every part thereof; and after
deducting the expenses of conducting the business thereof and of all
maintenance, repairs, replacements, alterations, additions,

                                       15
<PAGE>   16
betterments and improvements and all payments which may be made for taxes,
assessments, insurance, in payment of any prior deed of trust and prior or other
proper charges upon the Mortgaged Property or any part thereof, as well as just
and reasonable compensation of Beneficiary for the services of Beneficiary and
for all attorneys, counsel, agents, clerks, servants and other employees by it
properly engaged and employed, Beneficiary shall apply the moneys arising as
aforesaid, first, to the payment of any sums, other than interest and principal
on the Notes or due pursuant to the Loan Agreement required to be paid by
Trustor under this Deed of Trust, second, to the payment of interest on the
Notes or due pursuant to the Loan Agreement, third, to the payment of the
principal of the Notes or due pursuant to the terms of the Loan Agreement when
and as the same shall become payable (whether by acceleration or otherwise) and
finally, in an amount equal to the Early Termination Fee which would have been
payable if Trustor had voluntarily prepaid the Notes or Loan Agreement.

                  II. Beneficiary, at its option, may declare the entire unpaid
balance of the indebtedness secured hereby immediately due and payable and shall
record and give notice of Trustee's sale in the manner required by law.
Beneficiary shall also deposit with the Trustee this Deed of Trust, the Notes
and all documents evidencing the expenditures secured hereby.

                  III. After the lapse of such time as may then be required by
law following the recordation of said notice of sale, and notice of sale having
been given as then required by law, Trustee, without demand on Trustor, shall
sell the Mortgaged Property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it may
determine, at public auction to the highest bidder for cash in lawful money of
the United States, payable at time of sale. If the Mortgaged Property consists
of several known lots or parcels, Beneficiary may designate the order in which
such parcels shall be sold or offered for sale. Any person, including Trustor,
Trustee or Beneficiary, may purchase at such sale.

                  IV. Trustee may postpone sale of all or any portion of the
Mortgaged Property by public announcement at such time and place of sale, and
from time to time thereafter may

                                       16
<PAGE>   17
postpone such sale by public announcement at the time fixed by the preceding
postponement.

                  V. On and after the occurrence of an Event of Default, Trustor
shall pay all rents, issues and profits thereafter received by Trustor from the
Mortgaged Property to Beneficiary and to the extent not paid shall hold such
amounts as trust funds for the benefit of Beneficiary and such rents, issues and
profits shall be deemed "cash collateral" of Beneficiary under 11 U.S.C., as
amended.

                  SECTION II.2. (a) Trustee, after making such sale, and upon
receipt of the purchase price, shall make, execute and deliver to the purchaser
or purchasers its deed or deeds conveying the Mortgaged Property so sold, but
without any covenant or warranty, express or implied, and without any
representation, express or implied, as to the existence, or lack thereof, of
Hazardous Substances on the Mortgaged Property, and shall apply the proceeds of
sale thereof some to payment, FIRSTLY, of the costs and expenses of such sale,
together with the reasonable expenses of this Trust, including Trustee's fees
and cost of evidence of title in connection with sale and revenue stamps on
Trustee's deed; SECONDLY, of all moneys paid, advanced or expended by
Beneficiary under the terms hereof, not then repaid, together with the interest
thereon as herein provided; THIRDLY, of the amount of the principal and interest
on the Notes or under the Loan Agreement then remaining unpaid together with an
amount which would have been equal to the Early Termination Fee which would have
been paid by Trustor if Trustor had voluntarily prepaid the Notes or Loan
Agreement; and LASTLY, the balance or surplus, if any, of such proceeds of sale
to the person or persons legally entitled thereto, upon satisfactory proof of
such right.

                    (b) In the event of a sale of the Mortgaged Property, or any
part thereof, and the execution of a deed or deeds therefor under these trusts,
the recitals therein of any matters or facts shall be conclusive proof of the
truthfulness thereof and of the fact that said sale was regularly and validly
made in accordance with all requirements of the laws of the State of Arizona and
of this Deed of Trust; and any such deed or deeds, with such recitals therein,
shall be effectual and conclusive against Trustor and all other persons; and the
receipt for the

                                       17
<PAGE>   18
purchase money recited or contained in any deed executed to the purchaser as
aforesaid shall be sufficient discharge to such purchaser from all obligations
to see to the proper application of the purchase money according to the trusts
aforesaid.

                  SECTION 2.03. After the happening of an Event of Default by
Trustor under this Deed of Trust, Trustor hereby consents to the appointment of
a receiver or receivers of the Mortgaged Property and of all the earnings,
revenues, rents, issues, profits and income thereof. The exercise of any right
under this Article II shall not be deemed as election of remedies nor a "pending
action" so as to preclude to exercise of any other right or remedy. After the
happening of any such Event of Default and during its continuance, Beneficiary
shall be entitled, as a matter of right, if it shall so elect, without the
giving of notice to any other party and without regard to the adequacy or
inadequacy of any security for the Deed of Trust indebtedness, forthwith either
before or after declaring all sums evidenced by the Notes or due pursuant to the
Loan Agreement to be due and payable, to the appointment of such a receiver or
receivers.

                  SECTION 2.04. During the continuance of an Event of Default,
Beneficiary shall have the following rights and remedies:

                    (i) Beneficiary or its employees, acting by themselves or
through a court-appointed receiver, may enter upon, possess, manage, operate,
dispose of, and contract to dispose of the Mortgaged Property or any part
thereof; take custody of all accounts; negotiate with governmental authorities
with respect to the Mortgaged Property's environmental compliance and remedial
measures; take any action necessary to enforce compliance with any Act,
including but not limited to spending rents to abate the problem; make,
terminate, enforce or modify leases of the Mortgaged Property upon such terms
and conditions as Beneficiary deems proper; contract for goods and services,
hire agents, employees, and counsel, make repairs, alterations, and improvements
to the Mortgaged Property necessary, in Beneficiary's judgment, to protect or
enhance the security hereof; incur the risks and obligations ordinarily incurred
by owners of property (without any personal obligation on the part of the
receiver); and/or take any and all other actions which may

                                       18
<PAGE>   19
be necessary or desirable to comply with Trustor's obligations hereunder and
under the Notes or Loan Agreement. All sums realized by Beneficiary under this
subparagraph, less all costs and expenses incurred by it under this
subparagraph, including reasonable and documented attorneys' fees, and less such
sums as Beneficiary deems appropriate as a reserve to meet future expenses under
the subparagraph, shall be applied on any indebtedness secured hereby in such
order as Beneficiary shall determine. Neither application of said sums to said
indebtedness, nor any other action taken by Beneficiary under this subparagraph
shall cure or waive any Event of Default or notice of default hereunder, or
nullify the effect of any such notice of default. Beneficiary, or any employee
or agent of Beneficiary, or a receiver appointed by a court, may take any action
or proceeding hereunder without regard to (a) the adequacy of the security for
the indebtedness secured hereunder, (b) the existence of a declaration that the
indebtedness secured hereby has been declared immediately due and payable, or
(c) the filing of a notice of default.

                    (ii) With or without notice, and without releasing Trustor
from any obligation hereunder, to cure any default of Trustor and, in connection
therewith, Beneficiary or its agents, acting by themselves or through a court
appointed receiver, may enter upon the Mortgaged Property or any part thereof
and perform such acts and things as Beneficiary deems necessary or desirable to
inspect, investigate, assess, and protect the security hereof, including without
limitation of any of its other rights: (a) to obtain a court order to enforce
Beneficiary's right to enter and inspect the Mortgaged Property, to which the
decision of Beneficiary as to whether there exists a release or threatened
release of a Hazardous Substances onto the Mortgaged Property shall be deemed
reasonable and conclusive as between the parties hereto; and (b) to have a
receiver appointed to enforce Beneficiary's right to enter and inspect the
Mortgaged Property for Hazardous Substances. All costs and expenses incurred by
Beneficiary with respect to the audits, tests, inspections, and examinations
which Beneficiary or its agents or employees may conduct, including the fees of
the engineers, laboratories, contractors, consultants, and attorneys, shall be
paid by Trustor. All costs and expenses incurred by Trustee and Beneficiary
pursuant to this subparagraph (including without limitation court costs,
consultant fees and reasonable and

                                       19
<PAGE>   20
documented attorneys' fees, whether incurred in litigation or not and whether
before or after judgment) shall bear interest at the Default Rate set forth in
the Notes or Loan Agreement from the date they are incurred until said sums have
been paid.

                    (iii) To waive its lien against the Mortgaged Property or
any portion thereof, whether fixtures or personal property, to the extent such
property is found to be environmentally impaired and to exercise any and all
rights and remedies of an unsecured creditor against Trustor and all of
Trustor's assets and property for the recovery of any deficiency and
Environmental Costs, including, but not limited to, seeking an attachment order.
As between Beneficiary and Trustor, Trustor shall have the burden of proving
that Trustor or any related party (or any affiliate or agent of Trustor or any
related party) was not in any way negligent in permitting the release or
threatened release of the hazardous substances. Trustor acknowledges and agrees
that notwithstanding any term or provision contained herein or in the Notes or
Loan Agreement, all judgments and awards entered against Trustor shall be
exceptions to any nonrecourse or exculpatory provision of the Loan Documents,
and Trustor shall be fully and personally liable for all judgments and awards
entered against Trustor hereunder and such liability shall not be limited to the
original principal amount of the obligations secured by this Deed of Trust and
Trustor's obligations shall survive the foreclosure, deed in lieu of
foreclosure, release, reconveyance, or any other transfer of the Mortgaged
Property or this Deed of Trust. For the purposes of any action brought under
this subparagraph, Trustor hereby waives the defense of laches and any
applicable statute of limitations.

                    (iv) Nothing contained herein shall be construed to limit
any and all rights that Beneficiary has at law or pursuant hereto.

                  SECTION 2.05. No remedy herein conferred upon or reserved to
the Trustee or Beneficiary is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. No delay or omission of the Trustee
or Beneficiary to exercise any right or power occurring

                                       20
<PAGE>   21
upon the Event of Default shall impair any such right or power or shall be
construed to be a waiver thereof or an acquiescence therein; and every power and
remedy given by this Deed of Trust to the Trustee or Beneficiary may be
exercised from time to time and as often as may be deemed expedient by the
Trustee or Beneficiary. Nothing in this Deed of Trust or in the Notes or Loan
Agreement shall affect the obligation of Trustor to pay the principal of,
interest on, and Early Termination Fee payable pursuant to, the Notes and all
sums due under the Loan Agreement in the manner and at the time and place
therein respectively expressed.

                  SECTION 2.06. To the extent permitted by law, Trustor will not
at any time insist upon, or plead, or in any manner whatever claim or take any
benefit or advantage of, any stay or extension or moratorium law, any exemption
from execution or sale of the Mortgaged Property or any part thereof, wherever
enacted, now or at any time hereafter in force, which may affect the covenants
and terms of performance of this Deed of Trust; nor claim, take or insist upon
any benefit or advantage of any law now or hereafter in force providing for the
marshalling of the Mortgaged Property or on the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior or subsequent to any sale or
sales thereof which may be made pursuant to any provision herein, or pursuant to
the decree, judgment or order of any court of competent jurisdiction; nor, after
any such final sale or sales, claim or exercise any right under any statute or
otherwise, to redeem the property so sold or any part thereof; and Trustor
hereby expressly waives all benefit or advantage of any such law or laws, and
covenants not to hinder, delay or impede the execution of any power herein
granted or delegated to the Trustee or Beneficiary, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
Trustor hereby waives the right to require any sale to be made in parcels, or
the right to select parcels to be so sold, and there shall be no requirement for
marshalling of assets. Trustor hereby further waives any rights it may have
under applicable law relating to the prohibition of the obtaining of a
deficiency judgment by Beneficiary against Trustor.

                  SECTION 2.07. During the continuance of any Event of Default
and pending the exercise by the Trustee or Beneficiary of its right to exclude
Trustor from all or any part of the

                                       21
<PAGE>   22
Premises, Trustor agrees to pay the fair and reasonable rental value for the use
and occupancy of the Mortgaged Property for such period and upon default of any
such payment, will vacate and surrender possession of the Premises to the
Trustee or Beneficiary or to a receiver, if any, and in default thereof may be
evicted by any summary action or proceeding for the recovery or possession of
Premises for non-payment of rent, however designated.

                  SECTION 2.08. Without affecting the personal liability of any
person, firm, corporation or other entity, including Trustor (other than any
person released pursuant hereto), for the payment of the indebtedness secured
hereby, and without affecting the lien of this Deed of Trust for the full amount
of the indebtedness remaining unpaid upon any property not reconveyed pursuant
hereto, Beneficiary and Trustee are respectively authorized and empowered as
follows: Beneficiary may, at any time and from time to time, either before or
after the maturity of the Notes or the expiration of the Loan Agreement, and
without notice: (a) release any person liable for the payment of any of the
indebtedness, (b) make any agreement extending the time or otherwise altering
the terms of payment of any of the indebtedness, (c) accept additional security
therefor of any kind, (d) release any property, real or personal, securing the
indebtedness. Trustee may, without liability therefor and without notice, at any
time and from time to time so long as the lien or charge hereof shall subsist,
but only upon the written request of Beneficiary and presentation of this Deed
of Trust and the Notes for endorsement: (a) consent to the making of any map or
plat of the Land, (b) join in granting any easement thereon or in creating any
covenants restricting use or occupancy thereof, (c) reconvey, without warranty,
any part of the Mortgaged Property, (d) join in any extension agreement or in
any agreement subordinating the lien or charge hereof.

                  SECTION 2.09. This Deed of Trust constitutes a Security
Agreement under the laws of the State of Arizona so that Beneficiary shall have
and may endorse a security interest in any or all of the Mortgaged Property
which may or might now or hereafter be or be deemed to be personal property,
fixtures or property other than real estate (collectively, "Personal Property")
and Trustor agrees to execute, as debtor, such financing statement or statements
as Beneficiary may now or

                                       22
<PAGE>   23
hereafter reasonably request in order that such security interest or interests
may be perfected pursuant to such laws. This Deed of Trust further constitutes a
fixture filing under the Arizona Uniform Commercial Code, as amended or
recodified from time to time; provided, however that the execution and/or filing
hereof does not imply that the items of Personal Property included in the
Mortgaged Property are or are to become fixtures. The filing hereof as a fixture
filing is intended to protect the parties from unwarranted assertions by third
parties.

                  Notwithstanding any release of any or all of the property
included in the Premises which is deemed "real property", any proceedings to
foreclose this Deed of Trust, or its satisfaction of record, the terms hereof
shall survive as a security agreement with respect to the security interest
created hereby and referred to above until the repayment or satisfaction in full
of the obligations of Trustor as are now or hereafter evidenced by the Notes and
Loan Agreement.

                  SECTION 2.10. During the continuance of any Event of Default,
Beneficiary shall have all of the rights and remedies of a secured party under
the Uniform Commercial Code (the "Code") of the State of Arizona, and
specifically the right to direct notice and collections of any obligation owing
to Trustor by any lessee of the Premises. In addition to its rights to foreclose
this Deed of Trust, Beneficiary shall have the right to sell the Personal
Property or any part thereof, or any further, or additional, or substituted
Personal Property, at one or more times, and from time to time, at public sale
or sales or at private sale or sales, on such terms as to cash or credit, or
partly for cash and partly on credit, as Beneficiary may deem proper.
Beneficiary shall have the right to become the purchaser at any such public sale
or sales, free and clear of any and all claims, rights of equity of redemption
in Trustor, all of which are hereby waived and released. Trustor shall not be
credited with the amount of any part of such purchase price, unless, until and
only to the extent that such payment is actually received in cash. Notice of
public sale, if given, shall be sufficiently given, for all purposes, if
published not less than seven days prior to any sale, in any newspaper of
general circulation distributed in the city in which the property to be sold is
located or as otherwise required by the Code. The net proceeds of any sale of
the Personal Property which may remain after the

                                       23
<PAGE>   24
deduction of all costs, fees and expenses incurred in connection therewith,
including, but not limited to, all advertising expenses, broker's or brokerage
commissions, documentary stamps, recording fees, foreclosure costs, stamp taxes
and counsel fees, shall be credited by Beneficiary against the liabilities,
obligations and indebtedness of Trustor to Beneficiary secured by this Deed of
Trust and evidenced by the Notes or the Loan Agreement. Any portion of the
Personal Property which may remain unsold after the full payment, satisfaction
and discharge of all of the liabilities, obligations and indebtedness of Trustor
to Beneficiary shall be returned to the respective parties which delivered the
same to Beneficiary. If at any time Trustor or any other party shall become
entitled to the return of any of the Personal Property hereunder, any transfer
or assignment thereof by Beneficiary shall be, and shall recite that the same
is, made wholly without representation or warranty whatsoever by, or recourse
whatsoever against Beneficiary.

                  SECTION 2.11. All rights, remedies and powers provided by
Sections 2.01-2.10 hereof may be exercised only to the extent not expressly
inconsistent with the Loan Agreement and/or the other Loan Documents, and only
to the extent that the exercise thereof does not violate any applicable
provision of law in the jurisdiction in which the Premises are located, and all
such provisions are intended to be subject to all applicable provisions of law
which may be controlling in such jurisdiction and to be limited to the extent
necessary so that they will not render this Mortgage invalid, illegal or
unenforceable under the provisions of any applicable law.

                                   ARTICLE III

                                  MISCELLANEOUS

                  SECTION 3.01. In the event any one or more of the provisions
contained in this Deed of Trust shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Deed of Trust, but
this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

                                       24
<PAGE>   25
                  SECTION 3.02. All notices or demands by any party relating to
this Deed of Trust or any other agreement entered into in connection herewith
shall be sent in the form and manner set forth in the Loan Agreement.

                  SECTION 3.03. Intentionally Deleted.

                  SECTION 3.04. All of the grants, covenants, terms,
obligations, provisions and conditions herein contained shall run with the land
and shall apply to, bind and inure to the benefit of, the successors and assigns
of Trustor and Beneficiary and to the successors of the Trustee.

                  SECTION 3.05. Intentionally Deleted.

                  SECTION 3.06. It shall be lawful for the Trustee, or
Beneficiary, at its election, upon the occurrence of an Event of Default, to sue
out forthwith a complaint in foreclosure upon this Deed of Trust and to proceed
thereon to judgment and execution for the recovery of all sums payable by
Trustor pursuant to the terms of this Deed of Trust without further stay, any
law, usage or custom to the contrary notwithstanding.

                  SECTION 3.07. Notwithstanding the appointment of any receiver,
liquidator or trustee of Trustor, or of any of its property, or of the Mortgaged
Property, or any part thereof, the Trustee shall be entitled to retain
possession and control of all property now or hereafter held under this Deed of
Trust.

                  SECTION 3.08. If Trustor shall default in the payment of any
sums due pursuant to the terms of the Notes, the Loan Agreement, or this Deed of
Trust, and the same shall constitute an Event of Default, then such Event of
Default shall be, and be deemed to be, an attempt by Trustor to avoid the Early
Termination Fee payable by Trustor pursuant to the terms of the Loan Agreement
and consequently, upon such Event of Default Beneficiary shall be entitled to
collect such Early Termination Fee from Trustor with the same effect as if
Trustor had voluntarily elected to prepay the principal sum evidenced by the
Loan Agreement.

                  SECTION 3.09. Trustor hereby waives and relinquishes unto, and
in favor of Beneficiary, all benefit under all laws,

                                       25
<PAGE>   26
now in effect or hereafter passed, to relieve Trustor in any manner from the
obligations assumed and the obligation for which this Deed of Trust is security
or to reduce the amount of the said obligation to any greater extent than the
amount actually paid for the Mortgaged Property, in any judicial proceedings
upon the said obligation, or upon this Deed of Trust.

                  SECTION 3.10. Neither Trustor nor any other person now or
hereafter obligated for payment for all or any part of the indebtedness secured
hereby shall be relieved of such obligation by reason of the failure of
Beneficiary to comply with any request of Trustor or of any other person so
obligated to take action to foreclose on this Deed of Trust or otherwise enforce
any provisions hereof or of the Notes or under the Loan Agreement or by reason
of the release, regardless of consideration, of all or any part of the security
held for the indebtedness secured hereby.

                  SECTION 3.11. By accepting or approving anything required to
be observed, performed or fulfilled or to be given to Beneficiary pursuant to
this Deed of Trust, including (but not limited to) any certificate, balance
sheet, statement of profit and loss or other financial statement, survey,
appraisal or insurance policy, Beneficiary shall not be deemed to have warranted
or represented the sufficiency, legality, effectiveness or legal effect of the
same, or of any term, provision or condition thereof, and such acceptance or
approval thereof shall not be or constitute any warranty or representation with
respect thereto by Beneficiary.

                  SECTION 3.12. Beneficiary may from time to time, without
notice to Trustor or to the Trustee, and with or without cause and with or
without the resignation of the Trustee substitute a successor or successors to
the Trustee named herein or acting hereunder to execute this trust. Upon such
appointment and without conveyance to the successor Trustee, the latter shall be
vested with all title, powers and duties conferred upon the Trustee herein named
or acting hereunder. Each such appointment and substitution shall be made by
written document executed by Beneficiary, containing reference to this Deed of
Trust and its place of record, which when duly filed for record in the proper
office, shall be conclusive proof of proper appointment of the successor
Trustee. The procedure herein provided for

                                       26
<PAGE>   27
substitution of the Trustee shall be conclusive of all other provisions for
substitution, statutory or otherwise.

                  SECTION 3.13. Intentionally Deleted.

                  SECTION 3.14. Intentionally Deleted.

                  SECTION 3.15. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS GRANTED BY THIS DEED OF TRUST
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARIZONA AND IN ALL OTHER RESPECTS
THIS DEED OF TRUST SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.

                  SECTION 3.16. Simultaneously with, and in addition to, the
execution of this Deed of Trust, Trustor, and/or related or affiliated entities
of Trustor, has executed and delivered as security for the Notes and Loan
Agreement a mortgage or deed of trust on parcels of property which may or may
not be outside the boundaries of this county. Trustor agrees that the occurrence
of an Event of Default hereunder, or under any of such other mortgages or deeds
of trust, shall be an Event of Default under each and every one of such
mortgages and deeds of trust, including this Deed of Trust, permitting
Beneficiary to proceed against any or all of the property comprising the
Mortgaged Property or against any other security for the Notes and the Loan
Agreement in such order as Beneficiary, in its sole and absolute discretion may
determine. Trustor hereby waives, to the extent permitted by applicable law, the
benefit of any statute or decision relating to the marshalling of assets which
is contrary to the foregoing. Beneficiary shall not be compelled to release or
be prevented from foreclosing this instrument or any other instrument securing
the Notes and/or the Loan Agreement unless all indebtedness evidenced by the
Notes and/or the Loan Agreement and all items hereby secured shall have been
paid in full and Beneficiary shall not be required to accept any part or parts
of any property securing the Notes and the Loan Agreement, as distinguished from
the entire whole thereof, as payment of or upon the Notes and/or the Loan
Agreement to the extent of the value of such part or parts, and shall not be
compelled to accept or allow any apportionment of the indebtedness evidenced by
the Notes and/or the Loan Agreement to or among any separate parts of said
property.

                                       27
<PAGE>   28
                  SECTION 3.17. If all of the obligations secured hereby shall
be paid in full pursuant to the terms and conditions of this Deed of Trust and
the instruments evidencing the obligations, then Beneficiary (and Trustee to the
extent required by law to effect a full and proper termination, release and
reconveyance) shall, promptly after the request of Trustor, execute, acknowledge
and deliver to Trustor proper instruments evidencing the termination, release
and reconveyance of this Deed of Trust. Trustor shall pay all reasonable legal
fees and other expenses incurred by Beneficiary and Trustee for preparing and
reviewing such instruments and the execution and delivery thereof, and
Beneficiary may require payment of the same prior to delivery of such
instruments. Upon the receipt by Trustor of releases or reconveyances signed by
Beneficiary and Trustee, and in recordable form and evidencing the termination
of this Deed of Trust, Trustor, upon the instruction of Beneficiary, shall
promptly and at its own expense record or file such releases or reconveyances in
each of the cities, towns, counties and parishes and other filing offices, as
appropriate, in which portions of the Collateral may be located, in such a
manner so as to effect a release of all of the Collateral of record. Upon the
request of Beneficiary, Trustor shall promptly deliver to Beneficiary evidence
reasonably satisfactory to Beneficiary of such recordation or filing. Otherwise,
this Deed of Trust shall remain and continue in full force and effect. The
obligations of Trustor under this Section 3.17 shall survive the termination of
this Deed of Trust.

                  SECTION 3.18. The lien created by this Deed of Trust shall
continue until the "last dollar" owing by Trustor to Beneficiary and the other
lenders pursuant to the Loan Agreement has been paid in full.

                  IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to
be executed as of the day and year first above written.

                              "TRUSTOR"

                              HEALTH FACTORS INTERNATIONAL, INC.,
                              a Delaware corporation

                              By:
                                 -----------------------------------------------

                                       28
<PAGE>   29
                              Name:
                                 -----------------------------------------------
                              Its:
                                 -----------------------------------------------

                                       29
<PAGE>   30
STATE OF ____________          )
                               ) ss.
COUNTY OF ___________          )

                  The foregoing instrument was acknowledged before me this March
____, 2001 by _____________________________________, _______________ of
______________________, a ________________ corporation, on behalf of the
corporation.

           (SEAL)

                                       30
<PAGE>   31
                                    EXHIBIT A

                                       31

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