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                                                                   Exhibit 10.14

This instrument prepared by and return to:

MICHAEL S. ROSS, ESQ.
Greenspoon, Marder, Hirschfeld, Rafkin, Ross & Berger, P.A.
100 West Cypress Creek Road
Trade Centre South, Suite #700
Ft. Lauderdale, FL 33309


                         MORTGAGE AND SECURITY AGREEMENT


      THIS MORTGAGE AND SECURITY  AGREEMENT  executed  December __, 1998, by and
between  FIRST UNION  NATIONAL  BANK,  whose  address is 5581 West  Oakland Park
Boulevard, 2nd Floor, Lauderhill,  Florida 33313 (hereinafter referred to as the
"Mortgagee"  or "Lender") and ORIOLE HOMES CORP., a Florida  corporation,  whose
address for notice under this Mortgage is 1690 South Congress Avenue, Suite 200,
Delray  Beach,  Florida  33445  (hereinafter  collectively  referred  to as  the
"Mortgagor" or "Borrower").

                                   WITNESSETH:

      That for divers good and valuable considerations and to secure the payment
of an  indebtedness  or so much  thereof as may be  advanced,  evidenced  by two
Promissory Notes in the original aggregate principal amount of Six Million Seven
Hundred  Fifty  Thousand  and  00/100  U.S.  Dollars  ($6,750,000.00),  and more
specifically  an  Acquisition  Real  Estate  Promissory  Note  in  the  original
principal  amount of Three Million Seven Hundred Fifty  Thousand and 00/100 U.S.
Dollars  ($3,750,000.00)  (the "Acquisition  Note") and a Construction  Revolver
Real Estate  Promissory Note in the original  principal  amount of Three Million
and  00/100  U.S.  Dollars   ($3,000,000.00)   (the  "Construction  Note")  (the
Acquisition  Note and the  Construction  Note shall  sometimes  be  collectively
referred to herein as the "Note"), and a Letter of Credit Facility in the amount
of Two  Hundred  Thousand  and  00/100  U.S.  Dollars  ($200,000.00)  (the  "L/C
Facility")  of even date  herewith to be paid in  accordance  with their  terms,
together with interest thereon and any and all obligations,  whether absolute or
contingent,  due or which may become due from the  Mortgagor to the Mortgagee in
connection  with  any ISDA  Master  Agreement,  Schedule  to  Master  agreement,
Confirmation  Letter and any other  documents  executed in connection  therewith
(collectively the "Master Swap Agreement"),  the Mortgagor does grant,  bargain,
sell,  alien,  remise,  release,  convey and  confirm  unto the  Mortgagee,  its
successors  and assigns,  in fee simple,  all of that  certain  tract of land of
which the  Mortgagor  is now  seized  and  possessed  and in actual  possession,
situate in the County of Palm Beach,

                                   - - 200 - -


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State of Florida,  which is more fully  described in Exhibit "A" attached hereto
and made a part hereof,  together with the buildings and Houses thereon  erected
or to be erected (hereinafter referred to as the "Premises").


      TOGETHER with:

      (i) all leasehold estate,  and all right,  title and interest of Mortgagor
in and to all leases or subleases  covering the Premises or any portion  thereof
now or hereafter  existing or entered into, and all right, title and interest of
Mortgagor  thereunder,  including,  without  limitation,  all  cash or  security
deposits, advance rentals, and deposits or payments of similar nature;

      (ii) all right,  title and  interest of Mortgagor in and to all options to
purchase or lease the Premises or any portion thereof or interest  therein,  and
any greater estate in the Premises owned or hereafter acquired;

      (iii) all easements,  streets, ways, and, rights-of-way and rights used in
connection  therewith  or as a means  of  access  thereto,  and  all  tenements,
hereditaments and appurtenances thereof and thereto, and all water rights;

      (iv) any and all buildings,  structures and  improvements now or hereafter
erected  thereon,  including,  but not  limited  to the  fixtures,  attachments,
appliances, equipment, machinery, and other articles attached to said buildings,
structures and improvements (sometimes hereinafter referred to as the "Houses").

      (v) all fixtures, appliances, machinery, equipment, furniture, furnishings
and articles of personal  property now or hereafter  affixed to,  placed upon or
used in  connection  with the operation of any of said  properties  and all gas,
steam,  electric,  water and other heating,  cooking,  refrigerating,  lighting,
plumbing,  ventilating,  irrigating  and power  systems,  machines,  appliances,
fixtures,  and  appurtenances  which are now or may hereafter pertain or be used
within or on said  premises,  even though they may be detached or detachable and
all building  improvement  and  construction  materials,  supplies and equipment
hereafter  delivered  to  said  land  contemplating  installation  or use in the
constructions  thereon and all rights and  interests  of  Mortgagor  in building
permits and  architectural  plans and  specifications  relating to  contemplated
constructions  or  Houses on said  Premises  and all  rights  and  interests  of
Mortgagor in present or future  mortgage loan  commitments  pertaining to any of
said  Premises  or Houses  thereon  (sometimes  hereinafter  referred  to as the
"Personal Property"). See attached Exhibit "B" for additional personalty.

      (vi) all awards and proceeds of condemnation  for the Premises or any part
thereof to which  Mortgagor is entitled for any taking of all or any part of the
Premises by condemnation  or exercise of the right of eminent  domain.  All such
awards and condemnation proceeds are hereby assigned to

                                   - - 201 - -

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Mortgagee  and the  Mortgagee is hereby  authorized,  subject to the  provisions
contained in this Mortgage,  to apply such awards and  condemnation  proceeds or
any part  thereof,  after  deducting  therefrom  any  expenses  incurred  by the
Mortgagee in the collection or handling thereof,  toward the payment, in full or
in part, of the Note, notwithstanding the fact that the amount owing thereon may
not then be due and payable;

      (vii) all rents,  issues and profits of the  Premises  and all the estate,
right,  title and interest of every nature whatsoever of the Mortgagor in and to
the same;

      (viii) all accounts  (including  contract rights) and general  intangibles
pertaining  to or  arising  from or in  connection  with  all or any part of the
Mortgaged Property, as hereinafter defined,  including without limitation a) all
proceeds and choses in action  arising under any insurance  policies  maintained
with respect to all or any part of the Mortgaged Property (hereinafter defined);
and,

      (ix)  all  proceeds,  products,  replacements,  additions,  substitutions,
renewals and accessions of any of the foregoing items.

All of the foregoing real and personal property, and all rights,  privileges and
franchises are collectively referred to as the "Mortgaged Property."

      TO HAVE  AND TO HOLD  all  and  singular  the  Mortgaged  Property  hereby
conveyed, and the tenements, hereditaments and appurtenances thereunto belonging
or in anywise  appertaining,  and the  reversion and  reversions,  remainder and
remainders,  rents,  issues and profits thereof and also all the estate,  right,
title, interest property, possession, claim and demand whatsoever as well in law
as in equity of the said  Mortgagor in and to the same and every part and parcel
thereof unto the said Mortgagee in fee simple.

      PROVIDED  ALWAYS that if the Mortgagor  shall pay to the Mortgagee any and
all  indebtedness  due by  Mortgagor to Mortgagee  (including  the  indebtedness
evidenced by the Note and any and all  renewals of the same) and shall  perform,
comply with and abide by each and every stipulation,  agreement,  condition, and
covenant of the Note,  this  Mortgage,  the L/C Facility and the Loan  Agreement
(defined  herein);  then this Mortgage and the estate hereby created shall cease
and be null and void.  Provided,  it is  further  covenanted  and  agreed by the
parties  hereto that this  Mortgage also secures the payment of and includes all
future or further  advances as hereinafter  set forth,  to the same extent as if
such made on the date of the execution of this Mortgage,  and any  disbursements
made for the payment of tax, levies or insurance on the Mortgaged Property, with
interest on such disbursements at the Default Rate as hereinafter defined.

      To protect the security of this Mortgage, the Mortgagor further covenants,
warrants and agrees with the Mortgagee as follows:


                                   - - 202 - -


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                                    ARTICLE I
                      COVENANTS AND AGREEMENTS OF MORTGAGOR

      1.01  Payment of  Secured  Obligations.  Mortgagor  shall pay when due the
principal of, and the interest on, the  indebtedness  evidenced by the Note, and
the charges,  fees and the  principal  of, and interest on, any future  advances
secured by this  Mortgage and shall  otherwise  comply with all the terms of the
Note, the Loan Agreement, the L/C Facility and this Mortgage.

      1.02  Warranties  and  Representations.  Mortgagor  hereby  covenants with
Mortgagee that Mortgagor is indefeasibly seized of the Mortgaged Property in fee
simple; that the Mortgagor has full power and lawful right to convey the same in
fee  simple as  aforesaid;  that it shall be lawful for  Mortgagor  at all times
peaceably  and  quietly to enter  upon,  hold,  occupy and enjoy said  Mortgaged
Property  and  every  part  thereof;  that  Mortgagor  will  make  such  further
assurances to perfect the lien  interest in said  Premises in Mortgagee,  as may
reasonably be required;  and that  Mortgagor does hereby fully warrant the title
to the  Mortgaged  Property  and every  part  thereof  and will  defend the same
against the lawful claims of all persons whomsoever.

              Mortgagor  further  represents  and warrants to Mortgagee that all
information,  reports,  paper,  and data  given to  Mortgagee  with  respect  to
Mortgagor,  and to the loan  evidenced by the Note and Mortgage are accurate and
correct in all material  respects  and  complete  insofar as may be necessary to
give Mortgagee a true and accurate knowledge of the subject matter.

      1.03  Ground  Leases,  Leases,  Subleases  and  Easements.  Mortgagor,  at
Mortgagor's sole cost and expense,  shall maintain and cause to be performed all
of the covenants, agreements, terms, conditions and provisions on its part to be
kept,  observed  and  performed  under any  ground  lease,  lease,  sublease  or
easements  which may  constitute  a portion of or an interest  in the  Premises,
shall  require its tenants or  subtenants  to keep,  observe and perform all the
covenants,  agreements,  terms,  conditions  and  provisions on their part to be
kept, observed or performed under any and all ground leases,  leases,  subleases
or easements; and shall not suffer or permit any breach or default to occur with
respect to the foregoing;  and in default  thereof the Mortgagee  shall have the
right to perform or to require  performance of any such  covenants,  agreements,
terms,  conditions or provisions  of any such ground lease,  lease,  sublease or
easements and to add any expense  incurred in connection  therewith to this debt
secured hereby,  which such expense shall bear interest from the date of payment
to the date of recovery by the  Mortgagee  at the  Default  Rate as  hereinafter
defined.  Any such  payment by the  Mortgagee  with  interest  thereon  shall be
immediately due and payable. The Mortgagor shall not, without the consent of the
Mortgagee, consent to the modification, amendment, cancellation,  termination or
surrender of any such ground  lease,  lease,  sublease,  or easement;  provided,
however,  the consent of Mortgagee  shall not be required for any leases entered
into by Mortgagor and residents of the Premises.


                                   - - 203 - -


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              No release or forbearance of any of Mortgagor's  obligation  under
any such ground  lease,  or sublease,  shall release  Mortgagor  from any of its
obligations under this Mortgage.

      1.04 Required  Insurance.  Mortgagor  will, at  Mortgagor's  sole cost and
expense,  maintain  or cause to be  maintained  with  respect  to the  Mortgaged
Property, and each part thereof, the following insurance:

              (a) Insurance  against loss or damage to the  Improvement  by fire
and any of the risks  covered  by  insurance  of the type now known as "fire and
extended coverage" (including vandalism and malicious mischief) in an amount not
less than the original  amount of the Note or the full  replacement  cost of the
Houses;

              (b) Reporting form "all risk" Builders' Risk Insurance  (including
hazard and material  stockpile  clauses)  without  co-insurance in an amount not
less than 100% of the replacement cost of the Houses;

              (c) Flood  Hazardous  Insurance  in the  amount  of the  principal
amount of the Note or the maximum limit of coverage available under the National
Flood  Insurance Act of 1968,  Disaster  Protection Act of 1973, and the Housing
and Community  Development  Acts of 1974 and 1977, all as amended,  whichever is
less;

              (d) Single limit comprehensive general liability insurance for not
less than Three Million and 00/100 U.S. Dollars  ($3,000,000.00)  against claims
and  liability  for bodily  injury or  property  damage to  persons or  property
occurring on the Mortgaged Property; and

              (e) Such other insurance, and in such amounts, as may from time to
time be required by Mortgagee against the same or other hazards.

              All policies of insurance  required by the terms of this  Mortgage
shall contain an  endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy  notwithstanding  any act or
negligence  of Mortgagor  which might  otherwise  result in  forfeiture  of said
insurance  and the further  agreement  of the insurer  waiving all rights of set
off, counterclaim or deductions against Mortgagor.

              Mortgagor  may  effect  for  its own  account  any  insurance  not
required under this Section 1.04,  but any such insurance  effected by Mortgagor
on the Premises,  whether or not so required, shall be for the mutual benefit of
Mortgagor  and  Mortgagee  and shall be subject to the other  provisions of this
Mortgage.


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      1.05 Delivery of Policies,  Payment of Premiums. All policies of insurance
shall  be  issued  by  companies  with  ratings  of A or  better  (Excellent  or
Superior), and Class IX or better, in A.M. Best's Insurance Reports, licensed by
the Insurance  Commissioner  of the State of Florida to conduct  business in the
State of Florida and in amounts in each company  satisfactory to Mortgagee.  All
policies  of  insurance  shall have  attached  thereto a lender's  loss  payment
endorsement for the benefit of Mortgagee in form satisfactory to Mortgagee. Each
policy  Mortgagee  clause shall name "FIRST UNION  NATIONAL BANK, ITS SUCCESSORS
AND/OR ASSIGNS" as first  mortgagee.  Mortgagor shall furnish  Mortgagee with an
original policy of all policies of required insurance.  If Mortgagee consents to
Mortgagor  providing  any of the required  insurance  through  blanket  policies
carried by Mortgagor and covering more than one location,  then Mortgagor  shall
furnish  Mortgagee  with a certificate of insurance for each such policy setting
forth the coverage, the limits of liability, the name of the carrier, the policy
number,  and the  expiration  date.  At  least  thirty  (30)  days  prior to the
expiration of each such policy,  Mortgagor shall furnish Mortgagee with evidence
satisfactory  to  Mortgagee  of the Payment of premium and the  reissuance  of a
policy  continuing  insurance  in force as  required  by this  Mortgage.  Policy
premiums for all coverages must be prepaid at least a quarter in advance and all
policy renewals must be forwarded to First Union National Bank, Attn:  Insurance
Department, Va 7374, P.O. Box 50130, Roanoke, Virginia 24040. All policies shall
contain a  provision  that such  policies  will not be  canceled  or  materially
amended,  which  term  shall  include  any  reduction  in the scope or limits of
coverage,  without at least thirty (30) days prior written  notice to Mortgagee.
In the event Mortgagor fails to provide,  maintain, keep in force or deliver and
furnish to  Mortgagee  the  policies  of  insurance  required  by this  Section,
Mortgagee  may procure such  insurance or single-  interest  insurance  for such
risks covering Mortgagee's interest, and Mortgagor will pay all premiums thereon
promptly upon demand by  Mortgagee,  and until such payment is made by Mortgagor
the amount of all such premiums  together  with interest  thereon at the rate of
interest  after  maturity or default  provided  in the Note or the maximum  rate
permitted by Florida law, whichever is less.

       1.06  Insurance  Proceeds.  After the  happening  of any  casualty to the
Mortgaged  Property or any part  thereof,  Mortgagor  shall give prompt  written
notice thereof to Mortgagee.

              (a) In the event of any damage to or  destruction of the Mortgaged
Property,  Mortgagee shall have the option in its sole discretion of applying or
paying all or part of the  insurance  proceeds (i) to any  indebtedness  secured
hereby and in such order as Mortgagee may determine,  or (ii) to the restoration
of the Houses, or (iii) to Mortgagor.

              (b) In the event of such loss or damage, all proceeds of insurance
shall be payable to Mortgagee,  and Mortgagor hereby  authorizes and directs any
affected  insurance  company  to make  payment  of  such  proceeds  directly  to
Mortgagee.  Mortgagee is hereby authorized and empowered by Mortgagor to settle,
adjust or compromise any claims for loss, damage or destruction under any policy
or policies of insurance.


                                   - - 205 - -


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              (c) Nothing herein  contained shall be deemed to excuse  Mortgagor
from  repairing  or  maintaining  the  Mortgaged  Property  as  provided in this
Mortgage or  restoring  all damage or  destruction  to the  Mortgaged  Property,
regardless of whether or not there are insurance  proceeds  available or whether
any such proceeds are  sufficient in amount,  and the  application or release by
Mortgagee  of any  insurance  proceeds  shall not cure or waive any  default  or
notice of default  under this  Mortgage or  invalidate  any act done pursuant to
such notice.

      1.07 Assignment of Policies Upon Foreclosure.  In the event of foreclosure
of this  Mortgage or other  transfer  of title or  assignment  of the  Mortgaged
Property in extinguishment, in whole or in part, of the debt secured hereby, all
right,  title and interest of the  Mortgagor in and to all policies of insurance
required by this Section shall inure to the benefit of and pass the successor in
interest to Mortgagor or the  purchaser  or grantee of the  Mortgaged  Property.
Mortgagor hereby appoints Mortgagee its  attorney-in-fact to endorse any checks,
drafts or other instruments representing any proceeds of such insurance, whether
payable by reason of loss thereunder or otherwise.

      1.08 Taxes, Utilities and Impositions.  Mortgagor will pay, or cause to be
paid and discharged, on or before the last day on which they may be paid without
penalty or interest,  all such duties, taxes, sewer rents, charges for water, or
for setting or repairing  of meters,  and all other  utilities on the  Mortgaged
Property  or any  part  thereof,  and any  assessments  and  payments,  usual or
unusual,  extraordinary  or ordinary,  which shall be imposed upon or become due
and  payable  or become a lien upon the  Premises  or any part  thereof  and the
sidewalks  or streets in front  thereof and any vaults  therein by virtue of any
present  or future law of the United  States or of the  State,  County,  or City
wherein the Premises are located (all of the foregoing being herein collectively
called  "Impositions").  In  default  of any  such  payment  of any  imposition,
Mortgagee  may pay the same and the amount so paid by  Mortgagee  shall,  at the
Mortgagee's  option,  become  immediately  due and payable with  interest at the
Default  Rate and  shall be  deemed  part of the  indebtedness  secured  by this
Mortgage.

              If at any time there  shall be  assessed  or imposed  (i) a tax or
assessment  on  the  Mortgaged  Property  in  lieu  of or  in  addition  to  the
Impositions payable by Mortgagor pursuant to this Section or (ii) a license fee,
tax or  assessment  imposed on Mortgagee and measured by or based in whole or in
part upon the amount of the outstanding  obligations  secured  hereby,  then all
such taxes,  assessments or fees shall be deemed to be included  within the term
"Impositions" as defined in this Section,  and Mortgagor shall pay and discharge
the same as herein  provided with respect to the payment at  Impositions  or, at
the option of  Mortgagee,  all  obligations  secured  hereby,  together with all
accrued interest thereon, shall immediately become due and payable.  Anything to
the contrary herein  notwithstanding,  Mortgagor shall have no obligation to pay
any franchise, estate. inheritance, income, excess profits or similar tax levied
on Mortgagee or on the obligations secured hereby.

              Mortgagor will pay all mortgage  recording  taxes and fees payable
with respect to this Mortgage or other mortgage or transfer taxes due on account
of this Mortgage or the Note secured hereby.

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              Mortgagor will exhibit to Mortgagee the original receipts or other
reasonably satisfactory proof of the payment of all Impositions which may affect
the Mortgaged  Property or any part thereof or the lien of the Mortgage promptly
following the last date on which each Imposition is payable hereunder.

              Notwithstanding  the  foregoing,  Mortgagor  shall have the right,
after  prior  written  notice to  Mortgagee,  to contest at its own  expense the
amount and  validity  of any  Imposition  affecting  the  Mortgaged  Property by
appropriate  proceedings  conducted in good faith and with due  diligence and to
postpone or defer payment thereof, if and so long as:

              (a) Such  proceedings  shall operate to suspend the  collection of
such Imposition from Mortgagor or the Mortgaged Property; or

              (b) Neither the  Mortgaged  Property nor any part thereof would be
in immediate  danger of being  forfeited or lost by reason of such  proceedings,
postponement or deferment; and

              (c) In the case of any Imposition affecting the Mortgaged Property
which  might be or become a lien,  encumbrance  or charge  upon or result in any
forfeiture or loss of the Mortgaged Property or any part thereof, or which might
result in loss or damage to Mortgagor or Mortgagee, Mortgagor, prior to the date
such Imposition  would become  delinquent,  shall have furnished  Mortgagee with
security  satisfactory  to  Mortgagee,  and, in the event that such  security is
furnished,  Mortgagee  shall not have the right during the period of the contest
to pay, remove or discharge the Imposition.

      1.09 Escrow Reserves.  If Mortgagor commits any Event of Default hereunder
or under the Note, or any other Loan Document,  then  Mortgagee may require,  in
its  discretion,  Mortgagor  to pay to  Mortgagee  on the  date of each  regular
installment  of interest as required by the Note secured hereby (or on the first
day of each month if the interest  payments are due other than  monthly),  until
the  Note  is  fully  paid,  an  amount  equal  to  one-twelfth  (1/12)  or such
proportionate  share of the yearly premiums for insurance and/or  Impositions as
shall enable Mortgagee to pay for the insurance premiums and/or Impositions when
due. Such added payments shall not be, nor be deemed to be, trust funds, but may
be commingled with the general funds of the Mortgagee,  and no interest shall be
payable to Mortgagor with respect  thereof.  Upon demand of the  Mortgagee,  the
Mortgagor agrees to deliver to the Mortgagee such additional monies as to enable
the Mortgagee to pay such insurance premiums and/or Impositions when due. In the
event of  default  by the  Mortgagor  in the  performance  of any of the  terms,
covenants  and  conditions  of this  Mortgage or the Note  secured  hereby,  the
Mortgagee  may  apply to the  reduction  of the  principal  sum or any other sum
secured hereby in such manner as the Mortgagee shall determine, any amount under
this Paragraph 1.09 remaining to the Mortgagor's credit.


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      1.10 Maintenance, Repairs, Alterations. Mortgagor shall keep the Mortgaged
Property,  or cause the same to be kept, in good  condition and repair and fully
protected from the elements to the  satisfaction  of Mortgagee;  Mortgagor shall
not commit nor permit to be committed  waste thereon and shall not do nor permit
to be done any act by which the Mortgaged  Property  shall become less valuable;
Mortgagor  will not  remove,  demolish or  structurally  alter any of the Houses
(except such alterations as may be required by laws,  ordinances or regulations)
without the prior written permission of the Mortgagee;  Mortgagor shall complete
promptly and in good and  workmanlike  manner any building or other  improvement
which may be constructed on the Premises and promptly restore in like manner any
improvements which may be damaged or destroyed thereon and will pay when due all
claims for labor performed and materials furnished therefor; Mortgagor shall use
and operate,  and shall require its lessees or licensees to use or operate,  the
Mortgaged   Property  in  compliance  with  all  applicable  laws,   ordinances,
regulations.  covenants,  conditions and  restrictions,  and with all applicable
requirements of any ground lease,  lease or sublease now or hereafter  affecting
the Premises or any part thereof. Unless required by law or unless Mortgagee has
otherwise agreed in writing, Mortgagor shall not allow changes in the stated use
of Mortgaged  Property from that which was disclosed to Mortgagee at the time of
execution  hereof.  Mortgagor shall not initiate or acquiesce to a zoning change
of the Mortgaged  Property without the prior notice to and consent of Mortgagee.
Mortgagee  and its  representatives  shall have  access to the  Premises  at all
reasonable  times  to  determine   whether   Mortgagor  is  complying  with  its
obligations under this Mortgage, including, but not limited to, those set out in
this Section.

      1.11 Eminent Domain. Should the Mortgaged Property, or any part thereof or
interest therein, be taken or damaged by reason of any public use or improvement
or condemnation proceeding,  or in any other manner ("Condemnation"),  or should
Mortgagor receive any notice or other information  regarding such  Condemnation,
Mortgagor shall give prompt written notice thereof to Mortgagee.

              (a) Mortgagee  shall be entitled to all  compensation,  awards and
other payments or relief granted in connection with such Condemnation, and shall
be entitled, at its option, to commence, appear in and prosecute in its own name
any action or proceedings relating thereto.  Mortgagee shall also be entitled to
make any compromise or settlement in connection with such taking or damage.  All
such  compensation,  awards,  damages,  rights of action and proceeds awarded to
Mortgagor (the "Proceeds") are hereby assigned to Mortgagee and Mortgagor agrees
to execute such further assignments of the Proceeds as Mortgagee may require.

              (b) In the event any portion of the Mortgaged Property is so taken
or damaged, Mortgagee shall have the option in its sole and absolute discretion,
to apply all such Proceeds,  after deducting therefrom all outstanding  expenses
(regardless  of the  particular  nature  thereof  and whether  incurred  with or
without suit), including attorneys' fees, incurred by it in connection with such
Proceeds,  upon any indebtedness  secured hereby, or to apply all such Proceeds,
after such  deductions,  to the restoration of the Mortgaged  Property upon such
conditions as Mortgagee

                                   - - 208 - -


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may determine.  Such  application or release shall not cure or waive any default
or notice of default  hereunder  or  invalidate  any act done  pursuant  to such
notice.

              (c) Any amounts received by Mortgagee  hereunder (after payment of
any costs in connection with obtaining  same),  shall, if retained by Mortgagee,
be applied in payment of any accrued  interest and then in reduction of the then
outstanding  principal  sum of the Note,  notwithstanding  that the same may not
then be due and payable.  Any amount so applied to principal shall be applied to
the payment of  installments  of principal on the Note in inverse order of their
due dates.

      1.12 Actions by Mortgagee  to Preserve the Security of this  Mortgage.  If
the  Mortgagor  fails to make any  payment or to do any act as and in the manner
provided for in this Mortgage or the Note, the Mortgagee, in its own discretion,
without  obligation so to do and without  notice to or demand upon Mortgagor and
without releasing Mortgagor from any obligation, may make or do the same in such
manner and to such extent as the  Mortgagee  may deem  necessary  to protect the
security hereof. Mortgagor will pay upon demand all expenses incurred or paid by
Mortgagee  (including,  but not  limited  to  attorneys'  fees and  court  costs
including  those of  appellate  and  bankruptcy  proceedings)  on account of the
exercise  of any of the  aforesaid  rights or  privileges  or on  account of any
litigation  which may arise in  connection  with this Mortgage or the Note or on
account  of any  attempt,  without  litigation,  to  enforce  the  terms of this
Mortgage or said Note. In case the Mortgaged  Property or any part thereof shall
be advertised for foreclosure  sale and not sold,  Mortgagor shall pay all costs
in connection therewith.

              In the event that the  Mortgagee is called upon to pay any sums of
money to protect this Mortgage and the Note as aforesaid, all monies advanced or
due hereunder shall become  immediately due and payable,  together with interest
at the Default  Rate,  computed from the date of such advance to the date of the
actual receipt of payment thereof by the Mortgagee.

      1.13 Cost of Collection. In the event this Mortgage is placed in the hands
of an attorney for the  collection of any sum payable  hereunder,  the Mortgagor
agrees to pay all costs of  collection,  including  reasonable  attorney's  fees
including  those in all appellate and  bankruptcy  proceedings,  incurred by the
Mortgagee,  either with or without the  institution of any action or proceeding,
and in addition to all costs,  disbursements and allowances provided by law. All
such costs so incurred shall be deemed to be secured by this Mortgage.

      1.14 Survival of Warranties. All representations, warranties and covenants
of Mortgagor contained herein or incorporated by reference shall survive funding
of the loan  evidenced  by the Note and  shall  remain  continuing  obligations,
warranties and  representations of Mortgagor during any time when any portion of
the obligations secured by this Mortgage remain outstanding.


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      1.15  Additional  Security.  In the  event  Mortgagee  at any  time  holds
additional  security for any of the obligations  secured hereby,  it may enforce
the sale  thereof or  otherwise  realize  upon the same,  as its option,  either
before or concurrently herewith or after a sale is made hereunder,

      1.16 Inspections.  Mortgagee,  or its agents,  representatives or workmen,
are  authorized  to  enter  at any  reasonable  time  upon or on any part of the
Premises  for the  purpose  of  inspecting  the  same,  and for the  purpose  of
performing  any of the acts it is  authorized to perform under the terms of this
Mortgage.

      1.17 Liens.  Mortgagor  shall pay and promptly  discharge,  at Mortgagor's
cost and  expense,  all  liens,  encumbrances  and  charges  upon the  Mortgaged
Property or any part thereof or interest therein. Mortgagor shall have the right
to contest in good faith the validity of any such lien,  encumbrance  or charge,
provided  Mortgagor  shall first deposit with Mortgagee a bond or other security
satisfactory to Mortgagee in such amounts as Mortgagee shall reasonably require,
and provided further that Mortgagor shall thereafter diligently proceed to cause
such lien,  encumbrance  or charge to be removed and  discharged.  If  Mortgagor
shall fail to discharge any such lien,  encumbrance or charge, then, in addition
to any other right or remedy of  Mortgagee,  may, but shall not be obligated to,
discharge  the same,  either by  paying  the  amount  claimed  to be due,  or by
procuring  the  discharge  of such  lien by  depositing  in court a bond for the
amount claimed or otherwise giving security for such claim, or in such manner as
is or may be prescribed by law. Any amount so paid by the  Mortgagee  shall,  at
Mortgagee's  option,  become  immediately  due and payable with  interest at the
Default  Rate,  and shall be deemed  part of the  indebtedness  secured  by this
Mortgage.

      1.18 Future  Advances.  This Mortgage is given to secure not only existing
indebtedness,  but also future advances, whether such advances are obligatory or
are to be made at the option of  Mortgagee,  or  otherwise,  as are made  within
twenty  (20) years from the date  hereof,  to the same  extent as if such future
advances  are made on the date of the  execution  of this  Mortgage.  The  total
amount of indebtedness that may be so secured may decrease to a zero amount from
time to time, or may increase from time to time, but the total unpaid balance so
secured  at one time shall not exceed  twice the face  amount of the Note,  plus
interest thereon, and any disbursements made for the payment of taxes, levies or
insurance on the Mortgaged Property,  with interest on such disbursements at the
Default Rate as hereinafter defined.

      1.19 No  Limitation  of Future  Advance  Rights.  Mortgagor  covenants and
agrees with Mortgagee that:

              (a)  Mortgagor  waives and agrees not to assert any right to limit
future advances under this Mortgage,  and any such attempted limitation shall be
null, void and of no force and effect. Any correspondence by Mortgagor regarding
the future advances must be sent to Mortgagee at the address set forth above and
to Mortgagee's counsel.

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              (b) An Event of Default  under the  Mortgage  shall  automatically
exist (i) if Mortgagor  executes any instrument  which purports to have or would
have the effect of  impairing  the  priority of or limiting  any future  advance
which might ever be made under the Mortgage or (ii) if Mortgagor takes, suffers,
or permits any action or occurrence which would adversely affect the priority of
any future advance which might ever be made under the Mortgage.

      1.20 Appraisals.  Mortgagor covenants and agrees that Mortgagee may obtain
an appraisal of the Mortgaged  Property when required by the  regulations of the
Federal  Reserve  Board of the Office of the  Comptroller  of the Currency or at
such other times as the Mortgagee may reasonably require,  but no more than once
per year,  if Mortgagee  has  reasonable  belief that the value of the Mortgaged
Property may have declined,  or if the loan is in default. Such appraisals shall
be performed by an independent  third party appraiser  selected by the Mortgagee
and Mortgagor shall provide Lender,  at Mortgagor's  sole cost and expense,  the
current  appraisal of the Mortgaged  Property within  seventy-five  (75) days of
Mortgagee's  written  request for the same. The cost of such appraisal  shall be
borne by the Mortgagor.  If requested by Mortgagee,  the Mortgagor shall execute
an  engagement  letter  addressed to the  appraiser  selected by the  Mortgagee.
Mortgagor's  failure or refusal to sign such an engagement  letter however shall
not impair  Mortgagee's  right to obtain such an appraisal.  Mortgagor agrees to
pay the cost of such appraisal  within ten (10) days after  receiving an invoice
for such appraisal. Mortgagor's failure to promptly comply with the terms herein
shall be deemed an Event of Default hereunder.


                                   ARTICLE II
                        ASSIGNMENT OF LEASES, SUBLEASES,
                      FRANCHISES, RENTS, ISSUES AND PROFITS

      2.01  Assignment  of Rents.  Mortgagor  hereby  collaterally  assigns  and
transfers to Mortgagee all the leases, subleases,  franchises, rents, issues and
profits  of the  Mortgaged  Property,  and  hereby  gives  to and  confers  upon
Mortgagee  the right,  power and  authority  to collect  such rents,  issues and
profits as herein set forth.  Mortgagor  irrevocably appoints Mortgagee its true
and lawful attorney-in-fact, at the option of Mortgagee, immediately and without
further legal action being necessary, to demand, receive and enforce payment, to
give receipts, releases and satisfactions,  and to sue, in the name of Mortgagor
or Mortgagee,  for all such rents,  issues and profits and apply the same to the
indebtedness secured hereby;  provided,  however,  that Mortgagor shall have the
right to collect such rents,  issues and profits (but not more than one month in
advance)  prior to or at any time  there is not an Event of  Default  under this
Mortgage.

      2.02  Collection  Upon  Default.  Upon any  Event of  Default  under  this
Mortgage,  Mortgagee may, at any time without notice, either in person, by agent
or by a receiver appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured,  enter upon and take possession at
the  Mortgaged  Property,  or any  part  thereof,  in its own  name,  sue for or
otherwise

                                   - - 211 - -


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collect such rents, issues and profits, including those past due and unpaid, and
apply the same, less costs and expenses of operation and  collection,  including
attorneys'  fees, upon any  indebtedness  secured  hereby,  and in such order as
Mortgagee may determine.  The collection of such rents,  issues and profits,  or
the  entering  upon and taking  possession  of the  Mortgaged  Property,  or the
application thereof as aforesaid,  shall not cure or waive any default or notice
of default  hereunder or invalidate  any act done in response to such default or
pursuant to such notice of default.

      2.03  Restriction  on  Further  Assignments,  etc.  Except as  hereinafter
specifically provided, Mortgagor shall not, without the prior written consent of
the Mortgagee,  assign the rents, issues or profits,  or any part thereof,  from
the  Mortgaged  Property  or any part  thereof,  and  shall not  consent  to the
modification,  cancellation  or surrender of any lease or sublease  covering the
Mortgaged  Property.  An action of  Mortgagor  in violation of the terms of this
Section shall be void as against  Mortgagee in addition to being a default under
this Mortgage.

              The  Mortgagor  shall not,  without the consent of the  Mortgagee,
consent to the  cancellation  or surrender  of, or accept  prepayment  of rents,
issues or profits,  other than rent paid at the signing of a lease or  sublease,
under any lease or sublease now or hereafter  covering the Mortgaged Property or
any part  thereof,  nor modify any such lease or  sublease  so as to shorten the
term, decrease the rent,  accelerate the payment of rent, or change the terms of
any renewal option; and any such purported assignment, cancellation,  surrender,
prepayment  or  modification  made without the written  consent of the Mortgagee
shall be void as  against  the  Mortgagee;  provided,  however,  the  consent of
Mortgagee shall not be required for any leases entered into by Mortgagor and the
residents of the Premises.  The Mortgagor  shall,  upon demand of the Mortgagee,
enter into an  agreement  with the  Mortgagee  with  respect  to the  provisions
contained in the preceding  provision  regarding any lease or sublease  covering
said Mortgaged  Property or any part thereof,  and the Mortgagor hereby appoints
the Mortgagee  attorney-in-fact of the Mortgagor to execute and deliver any such
agreement on behalf of the Mortgagor and deliver  written  notice thereof to the
tenant to whose lease such agreement relates.

              The  Mortgagor  agrees to furnish to the  Mortgagee  a copy of any
modification  of any lease  presently in effect and copies of all future  leases
affecting  the  Mortgaged  Property  covered by this  Mortgage,  and  failure to
furnish to the Mortgagee a copy of any  modification of a lease or a copy of any
future lease  affecting  said  Mortgaged  Property,  shall be deemed an Event of
Default under this Mortgage and the Note,  for which the holder of this Mortgage
may, at its option,  declare the entire unpaid  balance of the subject  Mortgage
and Note to be immediately due and payable.

              All leases or subleases  hereafter  entered into by Mortgagor with
respect to the Mortgaged  Property or any part thereof,  shall be subordinate to
the lien of this Mortgage unless expressly made superior to this Mortgage in the
manner  hereinafter  provided.  At any time or times  Mortgagee  may execute and
record in the  appropriate  Office of the Register or County Clerk of the County
where the Premises are  situated,  a Notice of  Subordination  reciting that the
lease  or  leases  therein  described  shall  be  superior  to the  lien of this
Mortgage. From and after the recordation of such Notice of

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Subordination,  the lease or leases therein  described  shall be superior to the
lien of this  Mortgage and shall not be  extinguished  by any  foreclosure  sale
hereunder.

                                   ARTICLE III
                       ENVIRONMENTAL CONDITION OF PREMISES

      3.01  Environmental  Condition of Property.  Mortgagor hereby warrants and
represents to Mortgagee  after thorough  investigation  that, to the best of its
knowledge:

              (a) the premises are now and at all times  hereafter will continue
to be in full compliance with all Federal,  State and local  environmental  laws
and regulations,  including but not limited to, the Comprehensive  Environmental
Response,  Compensation  and  Liability  Act of 1980  (CERCLA),  Public  Law No.
96-510, 94 Stat. 2767, and the Superfund  Amendments and  Reauthorization Act of
1986 (SARA), Public Law No. 99-499, 100 Stat. 1613, and

              (b) (i) as of the date hereof  there are no  hazardous  materials,
substances,  waste  or other  environmentally  regulated  substances  (including
without limitation,  any materials  containing asbestos) located on, in or under
the  Premises  or used in  connection  therewith,  or (ii)  Mortgagor  has fully
disclosed to Mortgagee in writing the  existence,  extent and nature of any such
hazardous  material,   substance,   waste  or  other  environmentally  regulated
substance,  currently  present  or which  Mortgagor  is legally  authorized  and
empowered  to  maintain  on,  in or  under  the  Premises  or use in  connection
therewith.  Mortgagor has obtained and will  maintain all licenses,  permits and
approvals  required  with  respect  thereto,  and is and  will  remain  in  full
compliance with all of the terms,  conditions and requirements of such licenses,
permits and approvals.  Mortgagor  further  warrants and represents that it will
promptly notify  Mortgagee of any change in the  environmental  condition of the
Premises or in the nature or extent of any  hazardous  materials,  substances or
wastes maintained on, in or under the Premises or used in connection  therewith,
and will transmit to Mortgagee,  within five (5) days of receipt,  copies of any
citations, orders, notices or other material governmental of other communication
received with respect to any other  hazardous  materials,  substances,  waste or
other environmentally regulated substance affecting the Premises.

              (c)  Mortgagee  shall  have the  right  to  require  Mortgagor  to
periodically  (but not more  frequently than annually  (unless an  Environmental
Complaint is then outstanding) perform (at Mortgagor's expense) an environmental
audit and, if deemed necessary by Mortgagee,  an environmental  risk assessment,
each of which must be satisfactory to Mortgagee in its sole  discretion,  of the
Mortgaged Property,  hazardous waste management practices and/or hazardous waste
disposal sites used by Mortgagor.  Such audit and/or risk  assessment must be by
an environmental consultant satisfactory to Mortgagee.  Should Mortgagor fail to
perform such  environmental  audit or risk assessment within thirty (30) days of
the Mortgagee's  written  request,  Mortgagee shall have the right,  but not the
obligation,  to retain an environmental consultant to perform such environmental
audit or risk assessment. All costs and expenses incurred by Mortgagee

                                   - - 213 - -


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in the exercise of such rights shall bear interest at the default rate set forth
in the Note,  and shall be  secured  by this  Mortgage,  and shall be payable by
Mortgagor upon demand or charge to Mortgagor's loan balance at the discretion of
the Mortgagee.

              Mortgagor hereby indemnifies and holds harmless Mortgagee from and
against any and all  damages,  penalties,  fines,  claims,  suits,  liabilities,
costs,  judgments and expenses (including  attorneys',  consultant's or expert's
fees) of  every  kind and  nature  incurred,  suffered  by or  asserted  against
Mortgagee as a direct or indirect result of:

              (a) any  warranty  or  representation  made by  Mortgagor  in this
paragraph being or becoming false or untrue in any material respect or

              (b) any requirement under the law, regulation or ordinance, local,
state  or  federal,  regarding  the  removal  or  elimination  of any  hazardous
materials, substances, waste or other environmentally regulated substances.

              Mortgagor's  obligations  hereunder  shall not be  limited  to any
extent by the term of the Note,  and, any act or occurrence  which happens prior
to payment in full and  satisfaction  of the Note which gives rise to  liability
hereunder and/or hereafter, shall continue, survive and remain in full force and
effect  notwithstanding  foreclosure of this Mortgage,  (where  Mortgagee is the
purchaser at the foreclosure sale), or delivery of a deed in lieu of foreclosure
to Mortgagee.

                                   ARTICLE IV
                               SECURITY AGREEMENT

      4.01 Creation of Security Interest. Mortgagor hereby grants to Mortgagee a
security interest in any and all personal property included within the Mortgaged
Property  (herein  the  "Personal  Property")  located  on or at  the  Premises,
including without limitation, the Master Swap Agreement and any and all property
of similar type or kind hereafter located on or at the Premises for the purposes
of securing  all  obligations  of  Mortgagor  set forth in this  Mortgage.  This
instrument  is a  self-operative  security  agreement  with respect to the above
described  property,  but Mortgagor agrees to execute and deliver on demand such
other  security  agreements,  financing  statements  and  other  instruments  as
Mortgagee may request.

       4.02 Warranties,  Representations  and Covenants of Mortgagor.  Mortgagor
hereby warrants, represents and covenants as follows:

              (a) Except for the security interest granted hereby, Mortgagor is,
and as to portions of the Personal Property to be acquired after the date hereof
will be, the sole owner of the Personal  Property,  free from any adverse  lien,
security interest, encumbrance or adverse claims thereon of any kind whatsoever.
Mortgagor shall notify Mortgagee of, and shall

                                   - - 214 - -


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defend the Personal Property  against,  all Claims and demands of all persons at
any time claiming the same or any interest therein.

              (b)  Mortgagor  shall not  lease,  sell,  convey or in any  manner
transfer the Personal  Property  without the prior written consent of Mortgagee,
except in the ordinary course of Mortgagor's business.

              (c) The  Personal  Property is not and shall not be used or bought
for personal, family or household purposes.

              (d) The Personal  Property shall be kept on or at the Premises and
Mortgagor  will not remove the Personal  Property from the Premises  without the
prior written  consent of  Mortgagee,  except such portions or items of Personal
Property which are consumed or worn out in ordinary usage, all of which shall be
promptly replaced by Mortgagor.

              (e)  Mortgagor  maintains  a place  of  business  in the  State of
Florida and  Mortgagor  shall  immediately  notify  Mortgagee  in writing of any
change in its place of business as set forth in the beginning of this Mortgage.

              (f)  At  the  request  of  the  Mortgagee,  Mortgagor  shall  join
Mortgagee  in  executing  one or more  financing  statements  and  renewals  and
amendments  thereof  pursuant to the Uniform  Commercial Code of Florida in form
satisfactory  to  Mortgagee,  and will pay the  cost of  filing  the same in all
public  offices  wherever  filing is  deemed by  Mortgagee  to be  necessary  or
desirable.

              (g) All covenants and  obligations of Mortgagor  contained  herein
relating  to the  Mortgaged  Property  shall be deemed to apply to the  Personal
Property whether or not expressly referred to herein.

              (h) The  Mortgaged  Property is currently in  compliance  and will
comply with all applicable laws (including,  without  limitation,  the Americans
With Disabilities Act of 1990), ordinances, rules, and regulations, and with all
events, conditions,  easements, and restrictions to which the Mortgaged Property
is subject.

              (i) This Mortgage constitutes a Security Agreement as that term is
used in the Uniform Commercial Code of Florida.

              (j) Mortgagor  shall,  from time to time, at Mortgagee's  request,
furnish  Mortgagee or any other person or entity  designated  by  Mortgagee,  an
affidavit or certificate in a form  satisfactory to Mortgagee  which shall:  (i)
indicate the unpaid  principal  balance and accrued  interest on the Note;  (ii)
acknowledge either that Mortgagor is not in default of the terms

                                   - - 215 - -


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and  conditions of the Note and the Loan  Documents or that default  exists,  in
which  case,  any  defaults  shall be  described  in  detail;  (iii)  state that
Mortgagor has no defense, right of set-off or counterclaim to the payment of the
indebtedness,  or any part thereof,  or the  performance of any  obligations (or
describe any such defense, set-off, or counterclaim).  Any purchaser or assignee
of the Note and Loan Documents or any participating interest therein may rely on
the representations of the Mortgagor contained in such affidavit or certificate.


                                    ARTICLE V
                              REMEDIES UPON DEFAULT

      5.01 Events of Default.  Any one or more of the following shall constitute
a default under this Mortgage and the Note hereby secured:

              (a) Failure of Mortgagor to make one or more payments  required by
the Note or the L/C  Facility  on the  respective  due date  thereof  after  any
applicable grace period.

              (b) Failure of Mortgagor to pay the amount of any costs,  expenses
or fees (including  counsel fees) of the Mortgagee,  with interest  thereon,  as
required by any provision of this Mortgage.

              (c)  Failure  to exhibit  to the  Mortgagee,  within ten (10) days
after demand, receipts showing payment of real estate taxes and assessments.

              (d) Except as  hereinbefore  permitted,  the actual or  threatened
alteration,  demolition  or  removal of any  building  on the  Premises  without
written consent of the Mortgagee.

              (e)  Failure  to  maintain  the Houses on the  Premises  as herein
required, free of any liens placed or threatened during the term hereof.

              (f) Failure to comply with any  requirements or order or notice of
violation of law or ordinance  issued by any  governmental  department  claiming
jurisdiction  over the  Mortgaged  Property  within  three (3)  months  from the
issuance  thereof,  or before  any such  violation  becomes a lien  against  the
Mortgaged Property, whichever first occurs

              (g) Failure of  Mortgagor  or others to comply with or perform any
other warranty,  covenant,  condition,  agreement contained herein, in the Note,
the L/C Facility,  the  Construction  Loan Agreement,  executed and dated on the
same date hereof (the "Loan

                                   - - 216 - -


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Agreement"),  the  Commitment  Letter dated  December 11, 1998,  or in any other
document  executed by Mortgagor in conjunction  with this  transaction,  of even
date herewith.

              (h) Any breach of any covenant or warranty or material  untruth of
any representation of Mortgagor  contained in this Mortgage,  or the Note or any
guaranty executed in conjunction herewith.

              (i) The institution of any involuntary bankruptcy,  reorganization
or insolvency  proceedings  against the then owner or Mortgagor in possession of
the Mortgaged Property, or any guarantee,  or the appointment of a receiver or a
similar  official with respect to all or a substantial part of the properties of
the then owner or  Mortgagor  in  possession  of the  Mortgaged  Property  and a
failure to have such proceedings  dismissed or such appointment vacated within a
period of forty-five (45) days.

              (j) The institution of any voluntary bankruptcy, reorganization or
insolvency  proceedings  by the then owner or  Mortgagor  in  possession  of the
Mortgaged Property,  or the appointment of a receiver or a similar official with
respect  to all or a  substantial  part of the  properties  of the then owner or
Mortgagor in possession  of the  Mortgaged  Property at the instance of the then
owner or Mortgagor in possession of the Mortgaged Property.

              (k) The  assertion  or  making of any  levy,  seizure,  forfeiture
action, mechanic's or materialman's lien or attachment on the Mortgaged Property
or any part thereof; provided,  however, Mortgagor shall be entitled to transfer
any claim of a  mechanics  lien to bond  within ten (10) days of its  receipt of
notice of its recording, but in no event longer then thirty (30) days, provided,
however, that a separate Notice of Commencement must be filed for each House, in
which event, the filing of such assertion or making of levy, seizure, forfeiture
action,  mechanics or  materialmans  lien or attachment  shall not constitute an
Event of Default hereunder.

              (l) If  default  shall  occur  in any  loan  now or  hereafter  in
existence  between  Mortgagee and Mortgagor or any mortgagee which the Mortgagor
has any interest  whatsoever,  and,  conversely,  the  occurrence of an Event of
Default hereunder shall also constitute a default under any such other loan.

              (m) The violation (with respect to the Mortgaged  Property) of any
growth management statutes, concurrency laws and regulations, zoning ordinances,
building codes or restrictions or present or future encumbrances.

              (n) The  occurrence  of any Event of Default  under the Note,  the
Loan  Agreement or any other loan  agreement  or  guaranty,  whether or not such
event is specifically set forth herein.


                                   - - 217 - -


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              (o) A payment  default  and any other  event of default  under any
Master Swap Agreement.

              (p) Failure of Mortgagor, within three hundred sixty (360) days of
the date that the  Acquisition  Note is funded,  to make a  principal  reduction
payment in the amount of $688,400.00 under the Acquisition Note.

      5.02 Default Rate. The Default Rate shall be the highest, nonusurious rate
allowable  by law at the time of  default,  provided,  however,  that at no time
shall any  interest  or  charges in the nature of  interest  be taken,  exacted,
received or collected which would exceed the maximum rate permitted by law.

      5.03 Acceleration Upon Default, Additional Remedies. In the event that one
or more  defaults as above  provided  shall  occur,  the  remedies  available to
Mortgagee  shall include,  but not necessarily be limited to, any one or more of
the following:

              (a) Mortgagee  shall declare the entire unpaid balance of the Note
immediately due and payable without demand or notice.

              (b)  Mortgagee  may take  immediate  possession  of the  Mortgaged
Property or any part thereof (which  Mortgagor agrees to surrender to Mortgagee)
and  manage,  control or lease the same to such  person or  persons  and at such
rental  as it may deem  proper  and  collect  all  rents,  issues  and  profits,
therefrom,  including those past due as well as those thereafter accruing,  with
the right in the  Mortgagee  to cancel any lease or sublease for any cause which
would  entitle  Mortgagor  to cancel  the same;  to make such  expenditures  for
maintenance,  repairs and costs of operation as it may deem advisable; and after
deducting  the cost thereof and a commission of five (5%) percent upon the gross
amount of rents collected, to apply the residue to the payment of any sums which
are unpaid  hereunder  or under the Note.  The taking of  possession  under this
paragraph shall not prevent  concurrent or later proceedings for the foreclosure
sale of the Mortgaged Property as provided elsewhere herein.

              (c) Mortgagee may apply to any court of competent jurisdiction for
the  appointment  of a receiver  or similar  official  to manage and operate the
Mortgaged Property,  or any part thereof, and to apply the net rents and profits
therefrom  to the payment of the interest  and/or  principal of said Note and/or
any other  obligations  of Mortgagor to  Mortgagee  hereunder.  In event of such
application,  Mortgagor agrees to consent to the appointment of such receiver or
similar  official,  and agrees  that such  receiver or similar  official  may be
appointed  without  notice to  Mortgagor,  with  regard to the  adequacy  of any
security for the debts and with regard to the solvency of Mortgagor or any other
person,  firm or  corporation  who or which may be liable for the payment of the
Note or any other obligation of Mortgagor hereunder.


                                   - - 218 - -


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              (d) Without declaring the entire unpaid principal balance due, the
Mortgagee may foreclose as to the sum past due,  without injury to this Mortgage
or the displacement or impairment of the remainder of the lien thereof, and such
foreclosure  sale, the property shall be sold subject to all remaining  items of
indebtedness, and Mortgagee may again foreclose, in the same manner, as often as
there may be any sum past due.

      5.04  Additional  Provisions.  Mortgagor  expressly  agrees,  on behalf of
itself,  its  successors  and  assigns  and any  future  owner of the  Mortgaged
Property, or any part thereof or interest therein, as follows:

              (a) All  remedies  available  to  Mortgagee  with  respect to this
Mortgage shall be cumulative and may be pursued concurrently or successively. No
delay by  Mortgagee  in  exercising  any such remedy  shall  operate as a waiver
thereof or preclude the exercise  thereof during the  continuance of that or any
subsequent default.

              (b) The obtaining of a judgment or decree on the Note,  whether in
the State of Florida or  elsewhere,  shall not in any manner  affect the lien of
this Mortgage upon the Mortgaged  Property  covered hereby,  and any judgment or
decree  so  obtained  shall be  secured  to the same  extent as said Note is now
secured.

              (c) ln the  event  of any  foreclosure  sale  hereunder,  all  net
proceeds shall be available for application to the  indebtedness  hereby secured
whether or not such proceeds may exceed the value of the Mortgaged  Property for
unpaid taxes,  liens,  assessments and any other costs relating to the Mortgaged
Property.

              (d) The only  limitation  upon the foregoing  agreements as to the
exercise  of  Mortgagee's  remedies  is that  there  shall  be but one  full and
complete satisfaction of the indebtedness secured hereby.

              (e) The Mortgagor shall duly,  promptly and fully perform each and
every term and  provision  of the Loan  Agreement  which has been  executed  and
delivered by the parties hereto  simultaneously  with the execution and delivery
hereof, the terms of which Loan Agreement are incorporated  herein by reference.
The lien of this  Mortgage  secures the payment of all sums payable to Mortgagee
and the performance of all covenants and agreements of Mortgagor under the terms
of the Loan Agreement.

      5.05  Remedies  Not  Exclusive.  Mortgagee  shall be  entitled  to enforce
payment and performance of any indebtedness or obligations secured hereby and to
exercise all rights and powers under this Mortgage, the Loan Agreement,  the L/C
Facility,  or the Note or under any other agreement or any laws now or hereafter
in force,  notwithstanding  some or all of the said indebtedness and obligations
secured hereby may now or hereafter be otherwise  secured,  whether by mortgage,
deed

                                   - - 219 - -


<PAGE>






of trust, pledge, lien, assignment or otherwise.  Neither the acceptance of this
Mortgage nor its enforcement shall prejudice or in any manner affect Mortgagee's
right to realize upon or enforce any other  security  now or  hereafter  held by
Mortgagee,  it being  agreed that  Mortgagee  shall be entitled to enforce  this
Mortgage and any other security now or hereafter held by Mortgagee in such order
and manner as Mortgagee  may in its  absolute  discretion  determine.  No remedy
herein  conferred  upon or reserved to  Mortgagee is intended to be exclusive of
any other  remedy  herein or by law  provided  or  permitted,  but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter  existing at law or in equity or by statute.  Every power or remedy
given to Mortgagee or to which it may be otherwise  entitled,  may be exercised,
concurrently or  independently,  from time to time and as often as may be deemed
expedient by Mortgagee and it may pursue inconsistent remedies.

      5.06 Curative  Periods.  Mortgagor  shall have a ten (10) day grace period
from  each  respective  due date in which to make any  periodic  installment  of
principal or interest required under the terms of the Note. Additionally, unless
a shorter period is otherwise set forth herein, Mortgagor shall have thirty (30)
days  after  receipt  of  written  notice  from  Mortgagee  in which to cure any
non-monetary  Event of Default  expressly  excluding  voluntary  or  involuntary
bankruptcy  proceedings  filed by or  against  the  Mortgagor  and/or  judgments
rendered against the Mortgagor, which in the aggregate exceed $200,000.00.

                                   ARTICLE VI
                                  MISCELLANEOUS

      6.01 Corporate Existence. So long as the Mortgaged Property shall be owned
or held by a  corporation,  such  corporation  shall at all times  maintain  its
corporate existence and shall be fully authorized to do business in the State of
Florida and shall maintain in the State of Florida a duly authorized  registered
agent for the service of process.  Failure to comply with such obligations shall
be a default under this  Mortgage.  Within ninety (90) days after the expiration
of the time for  filing its annual  report  and the  payment of the  appropriate
corporate  taxes in the State of Florida,  Mortgagor will furnish to Mortgagee a
certificate of good standing or other evidence satisfactory to Mortgagee to show
compliance with the provisions of this Section.

      6.02  Statements  by  Mortgagor.  Mortgagor,  within  three (3) days after
request in person or within ten (10) days after request by mail, will furnish to
Mortgagor or any person,  firm or  corporation  designated by Mortgagee,  a duly
acknowledged  written  statement setting forth the amount of the debt secured by
this Mortgage, and stating either that no offsets of defenses exist against such
debt,  or, if such  offsets or defenses are alleged to exist,  full  information
with respect to such alleged offsets and/or defenses.


                                   - - 220 - -


<PAGE>






      6.03 Successors and Assigns.  The provisions  hereof shall be binding upon
and shall inure to the benefit of the  Mortgagor,  its  successors  and assigns,
including without limitation  subsequent owners of the Premises or the leasehold
estate of the  Premises  or any part  thereof;  shall be binding  upon and shall
inure to the benefit of  Mortgagee,  its  successors  and assigns and any future
holder of the Note,  and any  successors  or assigns of any future holder of the
Note.  In the event the  ownership of the  Mortgaged  Property or any  leasehold
estate that may be covered by this  Mortgage,  becomes  vested in a person other
than  Mortgagor,  Mortgagee  may,  without  notice to Mortgagor,  deal with such
successor or successors in interest with  reference to this  instrument  and the
Note in the same manner as with the  Mortgagor,  and may alter the interest rate
and/or  alter or extend  the terms of  payments  of the Note  without  notice to
Mortgagor  hereunder or under the Note hereby secured or the lien or priority of
this Mortgage with respect to any part of the Mortgaged Property covered hereby,
but nothing herein  contained shall serve to relieve  Mortgagor of any liability
under the Note or this Mortgage (or any other agreement  executed in conjunction
therewith)  unless  Mortgagee  shall  expressly  release  Mortgagor  in writing.
Mortgagor and any transferee or assignee  shall be jointly and severally  liable
for any  documentary or intangible  taxes imposed as a result of any transfer or
assumption.

      6.04  Notices.  All notices,  demands and  requests  given by either party
hereto to the other party shall be in writing. All notices, demands and requests
by the Mortgagee to the Mortgagor shall be deemed to have been properly given if
sent by United States registered or certified mail,  postage prepaid,  addressed
to the Mortgagor at the address as the Mortgagor may from time to time designate
by written  notice to the  Mortgagee,  given as herein  required.  All  notices,
demands and requests by the Mortgagor to the  Mortgagee  shall be deemed to have
been  properly  given if sent by United  States  registered  or certified  mail,
postage  prepaid,  addressed to the  Mortgagee,  or to such other address as the
Mortgagee  may from time to time  designate by written  notice to the  Mortgagor
given as herein  required.  Notices,  demands and  requests  given in the manner
aforesaid  shall  be  deemed  sufficiently  served  or  given  for all  purposes
hereunder at the time such notice,  demand or request  shall be deposited in any
post office or branch  post office  regularly  maintained  by the United  States
Government.

              The  Mortgagor  shall  deliver  to the  Mortgagee,  promptly  upon
receipt of same, copies of all notices, certificates,  documents and instruments
received  by it  which  materially  affect  any part of the  Mortgaged  Property
covered hereby, including, without limitation,  notices, notices from any lessee
or sublessee  claiming  that the  Mortgagor is in default under any terms of any
lease or sublease.

      6.05  Modifications  In  Writing.   This  Mortgage  may  not  be  changed,
terminated  or modified  orally or in any other manner than by an  instrument in
writing signed by the party against whom enforcement is sought.


                                   - - 221 - -


<PAGE>






      6.06  Captions.  The captions or headings at the beginning of each Section
hereof  are  for  the  convenience  of the  parties  and  are not a part of this
Mortgage.

      6.07  Invalidity  of Certain  Provisions.  If the lien of this Mortgage is
invalid or  unenforceable  as to any part of the debt, or if the lien is invalid
or unenforceable as to any part of the Mortgaged Property, the unsecured portion
of the debt  shall be  completely  paid  prior to the  payments  of the  secured
portion of the debt,  and all payments  made on the debt,  whether  voluntary or
otherwise,  shall be  considered  to have been first paid on and  applied to the
full payment of that  portion of the debt which is not secured or fully  secured
by the lien of this Mortgage.

      6.08 No Merger.  If both the lessor's and lessee's estates under any lease
or any portion thereof which constitutes a part of the Mortgaged  Property shall
at any time  become  vested in one owner,  this  Mortgage  and the lien  created
hereby shall not be destroyed or  terminated by  application  of the doctrine of
merger and, in such event, Mortgagee shall continue to have and enjoy all of the
rights and privileges of Mortgagee as to the separate estates. In addition, upon
the  foreclosure of the lien created by this Mortgage on the Mortgaged  Property
pursuant to the  provisions  hereof,  any leases or subleases  then existing and
created by Mortgagor  shall not be destroyed or terminated by application of the
law of merger or as a result of such  foreclosure sale shall so elect. No act by
or on behalf of Mortgagee or any such purchaser  shall  constitute a termination
of any lease or sublease  unless  Mortgagee or such purchaser shall give written
notice thereof to such tenant or subtenant.

      6.09  Governing Law and  Construction  of Clauses.  This Mortgage shall be
governed  and  construed  by the  laws of the  State of  Florida.  No act of the
Mortgagee  shall be construed as an election to proceed  under any one provision
of the  Mortgage  or of the  applicable  statutes of the State of Florida to the
exclusion  of any other such  provision,  anything  herein or  otherwise  to the
contrary notwithstanding. The venue for any action arising out of this Mortgage,
the Loan Agreement,  and any other Loan Document or matters related hereto shall
be in a court  of  competent  jurisdiction  in Palm  Beach  or  Broward  County,
Florida.

      6.10  Transfer.  It shall be an Event of Default  hereunder if any part of
the property  encumbered by this  Mortgage,  or any interest  therein,  is sold,
conveyed,   encumbered  or  otherwise  transferred  by  the  Mortgagor,  without
Mortgagee's prior written consent.

      6.11 Books and Records. Mortgagor and the Guarantors of Mortgagor, if any,
shall  furnish  annually  to  Mortgagee  complete,  true and  accurate  books of
accounts and records  reflecting  the results of the  operation of the Mortgaged
Property.  Mortgagor  shall also furnish to Mortgagee  within one hundred twenty
(120) days  after the end of each  fiscal  year of  Mortgagor,  fiscal  year end
audited income statements, balance sheets, cash flow analysis,  projections, tax
returns, contingent liability statements, and a Quarterly Financial Presentation
which shall be certified as true and correct by an

                                   - - 222 - -


<PAGE>






officer of Mortgagor.  The Quarterly  Financial  Presentation  shall include the
following schedules for Borrower and its subsidiaries:

          (1)     Consolidated Balance Sheets;
          (2)     Consolidated Statement of Operations;
          (3)     Consolidated Statement of Cash Flows;
          (4)     Interest, Rental and Other Income Schedule;
          (5)     Net Inventories Schedule;
          (6)     Consolidated  Statement of  Operations  By Quarters,  one page
                  schedule for applicable period;
          (7)     Cost of Houses and Condominiums Sold;
          (8)     Selling, General and Administrative Expenses;
          (9)     Operations Earnings Analysis - Current Period;
          (10)    Operations Earnings Analysis - Prior Year;
          (11)    Report of New  Contracts,  Closings  and Backlog of Houses and
                  Condominiums;
          (12)    Estimated Cost of Completion Included in Inventories; and
          (13)    Houses/Condominiums Completed or Under Construction.

      6.12  Financial  Statements.  If requested by  Mortgagee,  Mortgagor  will
within one hundred twenty (120) days after the end of each fiscal year,  furnish
to Mortgagee  annual tax returns and K-1's  Schedules,  together with a complete
financial statement including profit and loss and income and expense statements,
balance  sheet  and   reconciliation   of  surplus  which  statement  shall,  at
Mortgagee's  option,  prepared  by the  certified  public  accountant  regularly
serving the Mortgagor. All costs shall be paid by Mortgagor. Notwithstanding the
foregoing,  Mortgagor  may deliver its tax returns to Mortgagee  when  Mortgagor
delivers its tax returns to the Internal Revenue Service.

      6.13 Other Indebtedness  Secured.  This Mortgage is also given as security
for any and all other sums, indebtedness, obligations and liabilities of any and
every kind now or hereafter  during the term hereof owing and to become due from
Mortgagor  to  Mortgagee,  however  created,  incurred,  evidenced,  acquired or
arising,  whether  under the Note or this  Mortgage,  or any  other  instrument,
obligation,  contract,  agreement  or  dealing  of any  and  every  kind  now or
hereafter  existing  or  entered  into  between  Mortgagor  and  Mortgagee,   or
otherwise,  as amended,  modified or supplemented from time to time, and whether
direct,  indirect,  primary,  secondary,  fixed or  contingent,  and any and all
renewals, modifications or extensions of any or all of the foregoing.

      6.14    Additional Provisions if checked - see addendum.
              X


                                   - - 223 - -


<PAGE>






WAIVER OF JURY TRIAL. MORTGAGOR HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY
WAIVES  ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN  RESPECT  OF ANY  LITIGATION
BASED ON THIS  MORTGAGE,  OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS
MORTGAGE OR ANY AGREEMENT  CONTEMPLATED  TO BE EXECUTED IN CONNECTION  WITH THIS
MORTGAGE,  OR ANY COURSE OF  CONDUCT,  COURSE OF  DEALING,  STATEMENTS  (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT  HERETO.  THIS PROVISION
IS A MATERIAL  INDUCEMENT  FOR THE  MORTGAGEE'S  ACCEPTING  THIS  MORTGAGE  FROM
MORTGAGOR.


                                   - - 224 - -


<PAGE>







      IN WITNESS  WHEREOF,  Mortgagor has hereunto set hand and seal all done as
of the day and year first hereinabove written.

Signed, Sealed & Delivered in the Presence of:


------------------------------
      ORIOLE HOMES CORP., a Florida
Print Name: __________________________
      corporation



------------------------------
Print Name: __________________________     By:__________________________________
                                              Mark A. Levy, President
                                              ("MORTGAGOR")


                                   - - 225 - -


<PAGE>







STATE OF FLORIDA         )
                         )SS.
COUNTY OF _________      )

The foregoing  instrument was  acknowledged  before me this ___ day of December,
1998,  by  Mark  A.  Levy,  as  President  of  ORIOLE  HOMES  CORP.,  a  Florida
corporation,  on behalf of the corporation.  He is personally known to me or has
produced _____________________ (type of identification) as identification.


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


      NOTARY PUBLIC, STATE OF FLORIDA


      Printed Name:_________________________


      My Commission Expires:________________
 [Notary Seal]

              My Commission No.:_____________________


                                   - - 226 - -


<PAGE>






                                    ADDENDUM
                                    --------


      THIS ADDENDUM TO MORTGAGE AND SECURITY  AGREEMENT  ("Addendum") is entered
into   simultaneously   with  that  certain  Mortgage  and  Security   Agreement
("Mortgage") executed by ORIOLE HOMES CORP., a Florida corporation  ("Mortgagor"
or "Borrower") in favor of FIRST UNION NATIONAL BANK,  ("Mortgagee" or "Lender")
and is attached to said Mortgage.

      1. Loan Documents. Mortgagor covenants to comply with and abide by each of
the  stipulations,  agreements,  conditions  and  covenants  contained  in  this
Mortgage,  the Note, the Loan  Agreement,  the Loan  Commitment (as  hereinafter
defined)  and in all other  loan  documents  executed  in  connection  therewith
(collectively,  the "Loan  Documents").  A default  or  delinquency  under  this
Mortgage after any applicable grace period shall  automatically  and immediately
constitute a default  under the Note and under all other Loan  Documents  due to
which default Mortgagee may exercise all of its remedies  thereunder  (including
any  other  credit  facility  extended  by  Lender to  Borrower).  A default  or
delinquency under the Note or under any other Loan Document (including any other
credit  facility  extended by Lender to  Borrower)  after any  applicable  grace
period shall  automatically  and  immediately  constitute  a default  under this
Mortgage  due to  which  default  Mortgagee  may  exercise  all of its  remedies
hereunder.

      2. Mortgagee's Option to Cure. In the event the Mortgagor fails to pay any
charges or obligations  required to be paid by the Mortgagor  under the Mortgage
or this Addendum within the time set forth for such payment, the Mortgagee shall
have the right to pay such charge or obligation without waiving or affecting the
option of the Mortgagee to consider this Mortgage in default pursuant to Article
V of the Mortgage.  Every such payment shall be deemed to be added the principal
of the  Indebtedness,  shall be  secured by this  Mortgage  and shall be due and
payable on demand with interest at the rate set forth in the Note  applicable to
a period when default exists thereunder.

      3. Additional Financing. The obtaining of any additional financing secured
by the Mortgaged Property,  or any part thereof, or any other encumbrance of the
Mortgaged Property,  or any part thereof,  including,  without  limitation,  the
liens of unpaid real and personal  taxes,  and liens imposed by  governmental or
quasi-governmental  authority and also any "wraparound"  financing,  without the
prior written consent of the Mortgagee,  shall constitute a material default and
an Event of Default  under this  Mortgage  and  Mortgagee  may,  at  Mortgagee's
option, enforce any and all of Mortgagee's rights and remedies set forth in this
Mortgage.

      4.  Compliance  with Loan  Commitment.  The Mortgagor  shall timely comply
with,  abide by and  perform  all of the terms and  conditions  of that  certain
letter of commitment between the Mortgagor and the Mortgagee, dated December 11,
1998, as amended by that letter dated  December 14, 1998, the terms of which are
incorporated herein by reference, including all attachments and

                                   - - 227 - -


<PAGE>






exhibits (the "Loan Commitment"), on its part to be complied with, abided by and
performed. In the event of any conflict between the terms of the Loan Commitment
and this Mortgage, the terms of this Mortgage shall control and govern.

      5.   Mechanics'/Materialmen's   Liens.  Mortgagor  shall  not  permit  any
mechanics',  laborers' or  materialmen's  liens to stand  against the  Mortgaged
Property.  If any such lien shall at any time be recorded  against the Mortgaged
Property,  then  Mortgagor  shall (A) give written  notice  thereof  promptly to
Mortgagee;  and (B) cause the same to be  discharged  of record  within ten (10)
days after  receipt of notice of same,  either by payment,  deposit or bond.  If
Mortgagor fails to discharge any such lien within such period, the Mortgagee, in
addition to any other right or remedy hereunder,  shall have the option (but not
the  obligation)  to procure the discharge of such lien either by depositing the
amount claimed to be due in court,  or by bonding.  Any amount paid or deposited
by Mortgagee to discharge such lien, and all costs and other expenses, including
all reasonable  attorneys'  fees and  paralegals'  fees,  including any sales or
service tax due and  payable  upon the  attorneys'  fees and  paralegals'  fees,
incurred in defending any action to foreclose such lien,  shall be deemed a part
of the Indebtedness,  shall be due and payable, without demand, immediately, and
shall be payable with interest from the date of the advance  thereof at the rate
set forth in the Note applicable to a period when default exists thereunder.

      6. Loan Agreement.  The Mortgagor will cause the improvements specified in
the  Construction  Loan  Agreement  dated on even date herewith  executed by the
Mortgagor  ("Loan  Agreement") to be  constructed in accordance  with all of the
terms,  provisions  and  conditions  of the Loan  Agreement,  will  pursue  such
construction  with due  diligence  and  complete  same on or before  the date of
completion  specified in the Loan Agreement,  will comply with all the covenants
made by it in the Loan Agreement and will permit no default to occur thereunder.
Reference  is made  herein to the Loan  Agreement  for all  purposes to the same
extent and effect as if the Loan Agreement was fully set forth herein and made a
part of this Mortgage.

      In  the  event  of  the  Mortgagor's  failure  to  carry  on  or  complete
construction  or other  default of the  Mortgagor  under the Loan  Agreement and
whether or not the Mortgagee shall cause the indebtedness to become  immediately
due and payable,  the Mortgagee,  after due notice to the  Mortgagor,  is hereby
vested with full and complete  authority to enter upon the Mortgaged Property to
employ watchmen to protect the Mortgaged Property from depredation or injury and
to preserve and protect the personal property  therein,  to continue any and all
outstanding  contracts for erection and  completion of the  improvements  on the
Mortgaged  Property,  to make and  enter  into  any  contracts  and  obligations
wherever necessary, either in its own name as Mortgagee hereunder or in the name
of the Mortgagor,  and pay and discharge all debts,  obligations and liabilities
incurred thereby.  All sums so advanced by the Mortgagee  (exclusive of advances
of the  principal of the  indebtedness)  shall be added to the  principal of the
indebtedness,  shall be secured by this Mortgage and shall be due and payable on
demand with interest at the rate set forth in the Promissory  Note applicable to
a period when default exists thereunder.

                                   - - 228 - -


<PAGE>






      7.  Relief  From  Automatic  Stay.   Mortgagor   hereby  agrees  that,  in
consideration of the recitals and mutual  covenants  contained  herein,  and for
other good and valuable  consideration,  including the  forbearance of Mortgagee
from exercising its rights and remedies otherwise available to it under the Loan
documents,  as hereby  amended,  the receipt and sufficiency of which are hereby
acknowledged, in the event Mortgagor shall (i) file with any bankruptcy court of
competent  jurisdiction  or be the subject of any petition under Title 11 of the
U.S. Code, as amended,  (ii) be the subject of any order for relief issued under
such Title 11 of the U.S. Code, as amended,  (iii) file or be the subject of any
petition seeking any  reorganization,  arrangement,  composition,  readjustment,
liquidation,  dissolution, or similar relief under any present or future federal
or state act or law  relating  to  bankruptcy,  insolvency  or other  relief for
debtors,  (iv) have sought or consented to or acquiesced in the  appointment  of
any trustee,  receiver,  conservator  or  liquidator,  (v) be the subject of any
order,  judgment  or  decree  entered  by any  court of  competent  jurisdiction
approving  a  petition   filed  against  such  party  for  any   reorganization,
arrangement,  composition,  readjustment,  liquidation,  dissolution  or similar
relief  under any  present  or future  federal or state act or law  relating  to
bankruptcy,  insolvency  or relief for  debtors,  Mortgagee  shall  thereupon be
entitled to relief from any automatic stay imposed by Section 362 of Title 11 of
the U.S.  Code,  as amended,  or  otherwise,  on or against the  exercise of the
rights and  remedies  otherwise  available  to Mortgagee as provided in the Loan
Documents, as hereby amended, and as otherwise provided by law.

      8. Partial  Releases.  The Mortgagor  shall be required to repay principal
amounts  outstanding  under the Note from the proceeds of the sale of Houses (as
defined in the Loan Agreement).  The Mortgagee shall release each House from the
lien  operation  and  effect  of  the  Mortgage  upon  Mortgagee's   receipt  of
$42,000.00,  which sum shall be allocated against the amounts  outstanding under
the  Acquisition  Note,  together  with 100% of all monies  funded by  Mortgagee
towards  all  hard  and soft  construction  costs  and  interest  carry  for the
particular  House for which a release is requested  which sum shall be allocated
against the amounts funded under the Construction Note (hereinafter  referred to
as "Release Price").  The Release Price shall be utilized to repay the principal
amount  outstanding  under the Note. If Mortgagor  pays the principal  reduction
payment of Six  Hundred  Eighty-Eight  Thousand  Four  Hundred  and 00/100  U.S.
Dollars  ($688,400.00)  due under the  Acquisition  Note within ninety (90) days
after the date the Acquisition  Note is funded,  then the Release Price shall be
reduced  from  Forty-Two  Thousand  and  00/100  U.S.  Dollars  ($42,000.00)  to
Thirty-Three Thousand 00/100 U.S. Dollars  ($33,000.00).  If, upon the execution
hereof,  the principal  amount funded under the Acquisition  Note is not greater
than Three  Million  Sixty-One  Thousand  Six Hundred  and 00/100  U.S.  Dollars
($3,061,600.00),  then  the  Release  Price  as of  the  date  hereof  shall  be
Thirty-Three  Thousand  and  00/100  U.S.  Dollars  ($33,000.00).  In  addition,
Mortgagor  shall  pay  accrued  but  unpaid  interest.  The  Mortgagor  shall be
responsible  for  paying  all of  Mortgagee's  expenses  and costs  incurred  in
connection  with the release of Houses from the lien operation and effect of the
Mortgage.

      9. Management/Marketing Firm. In an Event of Default hereunder,  Mortgagee
has the  right to  review  and  approve  any  property  management  firm  and/or
marketing firm selected by

                                   - - 229 - -


<PAGE>






Mortgagor with respect to the Mortgaged Property. Mortgagor shall not substitute
management or marketing firms, or change the terms of said agreement(s), without
Lender's  prior written  consent,  which shall not be  unreasonably  withheld or
delayed.

      10.  Indemnification.  The Mortgagor has read and does hereby  approve the
legal description of the Property which is the subject of this Mortgage,  as set
forth in Exhibit "A" attached hereto and incorporated by reference  herein,  and
hereby agrees to indemnify  the Mortgagee and its attorneys  with respect to any
liability  which might arise as a consequence  of Section  697.10 of the Florida
Statutes.  Furthermore,  Mortgagor shall indemnify Mortgagee with respect to any
and all  liability  or  damages  which  may arise  out of any  development  work
existing and  previously  completed on the  Mortgaged  Property,  whether or not
inspected by  Mortgagee or Palm Beach  County,  and any  requirements  that Palm
Beach County may impose  subsequent to the Closing,  including,  but not limited
to,  correcting any defects which Palm Beach County may require upon  inspection
of the Mortgaged Property and the Improvements to be constructed thereon.

      11. Cross Default.  In the event that  Mortgagor  shall be in default with
respect to this  Mortgage,  the Loan  Agreement,  the L/C  Facility and the loan
evidenced by the Note, then Mortgagor  hereunder shall be deemed in default with
respect to all loans from Mortgagee to Mortgagor.  In the event  Mortgagor shall
be in default with respect to any loan whatsoever from Mortgagee, then Mortgagor
hereunder shall be deemed to be in default with respect to this Mortgage and the
loan evidenced by the Note.




                                   - - 230 - -


<PAGE>






      IN WITNESS  WHEREOF,  Mortgagor  has  hereunto  set hand and seal all done
simultaneously with the execution of the Mortgage.


                                   - - 231 - -


<PAGE>






Signed, Sealed & Delivered in the Presence of:


------------------------------
      ORIOLE HOMES CORP., a Florida
Print Name: __________________________
      corporation



------------------------------
Print Name: __________________________     By:__________________________________
                                              Mark A. Levy, President


                                             ("MORTGAGOR")


STATE OF FLORIDA                      )
                                      )SS.
COUNTY OF _________                   )

      The  foregoing  instrument  was  acknowledged  before  me this  ___ day of
December,  1998, by Mark A. Levy, as President of ORIOLE HOMES CORP.,  a Florida
corporation,  on behalf of the corporation.  He is personally known to me or has
produced _____________________ (type of identification) as identification.




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


      NOTARY PUBLIC, STATE OF FLORIDA


      Printed Name:_________________________


      My Commission Expires:________________
 [Notary Seal]

              My Commission No.:_____________________





                                   - - 232 - -


<PAGE>






                                   EXHIBIT "A"
                                   -----------

                               (Legal Description)

                                To be determined

                                   - - 233 - -


<PAGE>






                                   EXHIBIT "B"
                                   -----------


      (a) all easements and other rights now or hereafter  made  appurtenant  to
the real property described on Exhibit "A" ("Real Property");

      (b)  all  goods,   inventory,   intangible  personal  property,   licenses
(including  without   limitation,   liquor  licenses),   apparatus,   machinery,
equipment, furnishings,  fixtures, fittings, appliances and air conditioning and
heating equipment,  furniture,  freezing equipment,  and other property of every
kind   and   nature   whatsoever   owned  by   Mortgagor/Debtor,   or  in  which
Mortgagor/Debtor  has or shall have an interest,  now or hereafter  located upon
the Real Property, or appurtenant thereto, and usable in connection with the day
to day  operation  of the Real  Property,  and the right,  title and interest of
Mortgagor/Debtor  in and to any of the equipment located upon the Real Property,
which may be subject  to any  security  agreements  (as  defined in the  Uniform
Commercial Code);

      (c) all awards or payments,  including interest thereon, which may be made
with  respect to the Real  Property,  whether  from the exercise of the right of
eminent  domain  (including  any  transfer  made in lieu of the exercise of said
right),  or for any  other  injury  to or  decrease  in the  value  of the  Real
Property;

      (d) all leases and other agreements  affecting the use or occupancy of the
Real  Property now or hereafter  entered into and the right to receive and apply
the rents,  issues and profits of the Real Property,  and any security  deposits
paid in connection therewith;

      (e) all rights of  Mortgagor/Debtor in and to all present and future fire,
flood,  liability  and/or  hazard  insurance  policies  pertaining to all or any
portion  of the Real  Property  and/or  any items  covered  by this  instrument,
including without limitation any unearned premiums and all insurance proceeds or
sums payable in lieu of or as  compensation  for the loss of or damage to all or
any portion of the Real Property and/or any items covered by this instrument;

      (f) the  right  (but not the  obligation),  in the name and on  behalf  of
Mortgagor/Debtor,  to appear in and defend any action or proceeding brought with
respect to the Real Property and to commence any action or proceeding to protect
the interest of the Mortgagee/Secured Party in the Real Property;

      (g) all tenements, hereditaments,  easements, riparian or other rights and
appurtenances  thereunto  belonging or in any wise  appertaining,  including all
right, title and interest of  Mortgagor/Debtor in and to the underlying title of
any  roads  or  other  dedicated  area  abutting  the  Real  Property,  and  the
reversions,   remainders,   rents,   issues  and   profits   thereof,   and  all
after-acquired title of Mortgagor/Debtor in the Real Property;


                                    - - 1 - -


<PAGE>






      (h) all abstracts of title,  contract  rights,  management,  franchise and
service agreements, accounts, occupancy permits and licenses, building and other
permits, governmental approvals,  licenses, agreements with utilities companies,
water  and  sewer   capacity   reservation   agreements,   bonds,   governmental
applications  and  proceedings,  feasibility  studies,  maintenance  and service
contracts,  marketing agreements,  development agreements,  surveys, engineering
work,  architectural plans and engineering plans, site plans, landscaping plans,
engineering  contracts,   architectural   contracts,  and  all  other  contracts
respecting  the Real Property and all other  consents,  approvals and agreements
which  Mortgagor/Debtor  may now or hereafter  own in  connection  with the Real
Property and/or any improvements  constructed  thereon,  and all deposits,  down
payments  and profits paid or  deposited  thereunder,  now existing or hereafter
obtained by or on behalf of Mortgagor/Debtor;

      (i) all  sanitary and storm sewer,  water and utility  service  agreements
within the Real Property as to which Mortgagor/Debtor is a party or beneficiary;

      (j) all building materials, appliances and fixtures now owned or hereafter
to be acquired by or on behalf of  Mortgagor/Debtor  and intended for use in the
construction  of  or  incorporated,   annexed  to,  or  located  in,  or  to  be
incorporated  in, annexed to, or located in the buildings and improvements to be
constructed  on the  Real  Property  or any part  thereof.  Said  materials  and
personal property shall include but not be limited to lumber,  plaster,  cement,
shingles,  roofing,  plumbing fixtures, pipe, lath, wallboard,  cabinets, nails,
sinks, toilets,  furnaces,  heaters, brick, tile, water heaters, screens, window
frames,  glass  doors,   flooring,   paint,  lighting  fixtures  and  unattached
refrigerating,  cooking,  heating  and  ventilating  appliances  and  equipment,
kitchen goods, hotel goods,  restaurant goods, bar goods, tools, lawn equipment,
floor coverings;

      (k) any monies and any escrow accounts  established or accrued pursuant to
that certain Mortgage  encumbering the Real Property made by Mortgagor/Debtor in
favor of Mortgagee/Secured Party;

      (l) any property or other things of value acquired with or paid for by any
future advances pursuant to the said Mortgage;

      (m) all  contracts of sale and  purchase  agreements  respecting  the Real
Property,  all  contracts  for deed and any notes  and  mortgages  executed  and
delivered  to  Mortgagor/Debtor  in  connection  with  any  contracts  for  deed
otherwise,  and any other contracts entered into by Mortgagor/Debtor  respecting
or relating in any manner to the Real Property;

      (n) all income and  profits  due or to become due under any  contracts  of
sale or  purchase  agreements  respecting  the Real  Property,  now  existing or
hereafter obtained by or on behalf of Mortgagor/Debtor;


                                    - - 2 - -


<PAGE>






      (o) all refunds of  property  taxes  relating to the Real  Property or any
other property covered by this financing statement;

      (p) all accounts receivable arising from operations  conducted at the Real
Property;

      (q) all of the water,  sanitary  and storm sewer  systems now or hereafter
owned by the  Mortgagor/Debtor  which are now or hereafter  located by, over, or
upon the Real  Property or any part or parcel  thereof,  and which water  system
includes all water mains, service laterals,  hydrants, valves and appurtenances,
and which sewer  system  includes all sanitary  sewer  lines,  including  mains,
laterals, manholes and appurtenances;

      (r) all of the right, title and interest of the Mortgagor/Debtor in and to
any copyrights,  trademarks, service marks, trade names, names of businesses, or
fictitious  names of any kind  used in  conjunction  with the  operation  of any
business or endeavor located on the Real Property;

      (s) all of Mortgagor/Debtor's interest in all utility security deposits or
bonds on the Real Property or any part or parcel thereof;

      (t) any and all  balances,  credits,  deposits,  accounts or monies of the
Mortgagor/Debtor and all guarantors and all other such properties and securities
then   or   thereafter   established   with   or  in  the   possession   of  the
Mortgagee/Secured Party; and

      (u) all warranties, guaranties, instruments, documents, chattel papers and
general intangibles  relating to or arising from the foregoing  collateral,  now
owned or hereafter acquired by Mortgagor/Debtor.

      (v) all rights of  Mortgagor/Debtor  under the terms and conditions of any
Master Swap Agreement which may be in effect from time to time.

      Together with all substitutions for, alterations, repairs and replacements
of any of the  foregoing  and any and all  proceeds  (whether  cash  proceeds or
non-cash proceeds),  products, renewals,  accessions and additions or any of the
foregoing.



                                    - - 3 - -