Exhibit 10.3

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PREPARED  BY/RECORD AND RETURN TO: Marcy H. Kammerman,  Esquire,  Tarragon South
Development Corp., 200 East Las Olas Blvd., Suite 1660, Fort Lauderdale, Florida
33301
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                   THIRD MORTGAGE DEED AND SECURITY AGREEMENT

         THIS THIRD MORTGAGE DEED AND SECURITY  AGREEMENT  (this  "Mortgage") is
made and entered into as of the ________ day of  _______________,  2005,  by and
between AGU ENTERTAINMENT CORP., a Delaware  corporation,  whose address is 3200
West  Oakland Park Blvd,  Lauderdale  Lakes,  Florida  33311  ("Mortgagor")  and
TARRAGON SOUTH  DEVELOPMENT  CORP., a Nevada  corporation,  whose address is 200
East Las Olas Blvd., Suite 1660, Fort Lauderdale,  Florida 33301, its successors
and assigns ("Mortgagee").

                              W I T N E S S E T H :

         WHEREAS, Mortgagor has, simultaneously herewith, executed and delivered
to  Mortgagee  a  Promissory  Note (the  "Note") of even date  herewith,  in the
principal  amount of Two  Million  Five  Hundred  Thousand  and  00/100  Dollars
($2,500,000.00),  payable  in  accordance  with  the  terms  and  provisions  as
particularly  stated in said Note,  on or before the maturity  date set forth in
the Note,  which Note by reference is made a part hereof to the extent as though
set out in full herein.

         NOW  THEREFORE,  to  secure  the  performance  and  observance  of  all
covenants  and  conditions  in the Note and in this  Mortgage,  and in all other
instruments  securing,  evidencing or otherwise  executed in connection with the
Note (the Note,  this Mortgage and such other  documents are referred to herein,
collectively,  as the "Loan  Documents"),  and 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, or to the holder of the Note, or to the assignees thereof,  howsoever
the  indebtedness is created,  incurred,  evidenced or acquired and whether said
indebtedness  is direct or  indirect,  absolute  or  contingent,  sole or joint,
primary or  secondary,  or  evidenced  by  promissory  notes,  open  accounts or
otherwise;  and all renewals,  modifications  or extensions of all or any of the
foregoing,  and for and in  consideration  of the sum of Ten and 00/100  Dollars
($10.00)  paid by  Mortgagee  to  Mortgagor  this date,  and for other  valuable
considerations,  the receipt and  sufficiency of which are hereby  acknowledged,

<PAGE>

Mortgagor does hereby grant,  bargain,  sell, alien,  remise,  release,  convey,
assign, transfer, mortgage, hypothecate,  pledge, deliver, set over, warrant and
confirm unto Mortgagee,  its successors and assigns forever, certain lands lying
and being situate in Broward County,  Florida,  more  particularly  described as
follows:

                       SEE EXHIBIT "A" APPENDED HERETO AND
                      MADE A PART HEREOF (the "Property"),

         TOGETHER  WITH all  buildings,  structures  and  improvements  of every
nature whatsoever now or hereafter  situated on the Property,  and all fixtures,
machinery,  appliances,  equipment,  furniture  and  property  of  every  nature
whatsoever,  now or  hereafter  owned by  Mortgagor  and  located  in or on,  or
attached to, or used, or intended to be used,  in connection  with the operation
of the Property, buildings,  structures, or other improvements, such as, without
limitation, all apparatus, machinery, appliances,  equipment, radiators, ranges,
refrigerators, awnings, shades, blinds, incinerating equipment, power equipment,
engines, pipes, pumps, tanks, motors, conduits, switchboards, lifting, cleaning,
fire prevention,  fire extinguishing,  ventilating and communications apparatus,
boilers, vacuum cleaning systems,  elevators,  escalators,  screens, storm doors
and  windows,   stoves,  wall  beds,  attached  cabinets,   partitions,   ducts,
compressors, rugs and carpets, draperies, furniture and furnishings;

         TOGETHER  WITH all building  materials  and  equipment now or hereafter
delivered to the Property and intended to be installed  therein  including,  but
not limited to, lumber, plaster, cement, shingles, roofing, plumbing,  fixtures,
pipe, lath, wall-heaters,  screens, window frames, glass doors, flooring, paint,
lighting fixtures, and unattached refrigerating,  cooking, heating,  ventilating
and air  conditioning  ducts,  appliances  and equipment,  kitchen goods,  hotel
goods, restaurant goods, bar goods, tools, lawn equipment,  floor coverings, and
elevators;

         TOGETHER WITH all right,  title and interest of Mortgagor in and to the
minerals,  soil, flowers, shrubs, crops, trees, timber, and other emblements now
or hereafter on the Property,  or under or above the same, or any part or parcel
thereof;

         TOGETHER WITH all  easements,  rights-of-way,  streets,  ways,  alleys,
passages,  sewer rights,  waters,  water courses,  water rights and powers,  and
sanitary and storm sewer systems,  now or hereafter owned by the Mortgagor which
are now or hereafter located by, over, and/or upon the Property, or any part and
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;  and all paving for streets, roads, walkways or entrance ways now
or hereafter  owned by Mortgagor  and which are now or hereafter  located on the
Property,  or any part or  parcel  thereof,  and all  estates,  rights,  titles,
interests,  privileges,  liberties, tenements,  hereditaments, and appurtenances
whatsoever,  in  any  way  belonging,  relating  or  appertaining  to any of the
property  hereinabove  described,  or which  hereafter  shall in any way belong,
relate or be  appurtenant  thereto,  whether now owned or hereafter  acquired by
Mortgagor,  and the reversion and reversions,  remainder and remainders,  rents,
issues  and  profits  thereof,  and  all the  estate,  right,  title,  interest,
property, possession, claim and demand whatsoever, at law, as well as in equity,
of  Mortgagor  of,  in,  and to the same,  including,  but not  limited  to, all
judgments,  awards of damages and  settlements  hereafter  made  resulting  from
condemnation  proceedings or the taking of the Mortgaged  Property,  or any part
thereof, under the power of eminent domain, or for any damage (whether caused by
such taking or otherwise) to the Mortgaged Property,  or any part thereof, or to
any rights  appurtenant  thereto.  Also,  all  architectural  building plans and
specifications and all abstracts of title relating to the Mortgaged Property;


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<PAGE>

         TOGETHER WITH all of Mortgagor's right, title and interest as lessor in
and to all leases or rental  arrangements of the Property,  or any part thereof,
heretofore  made  and  entered  into,  and  in  and  to  all  leases  or  rental
arrangements  hereafter  made and  entered  into by or on behalf  of  Mortgagor,
together with all rents and payments in lieu of rents, together with any and all
guarantees of such leases or rental  arrangements  and including all present and
future security deposits and advance rentals;

         TOGETHER WITH all of Mortgagor's right, title and interest as seller in
and to all  agreements for the sale of the Property,  the Mortgaged  Property or
any part  thereof,  heretofore  made and  entered  into,  and in and to all sale
agreements  hereafter  made and  entered  into,  by or on behalf  of  Mortgagor,
together with all deposits and payments in connection  therewith,  together with
any and all guarantees of such agreements, together with any and all receivables
now or hereafter due Mortgagor with respect to such agreements;

         TOGETHER WITH all of  Mortgagor's  right,  title and interest in and to
all  unearned  premiums  accrued,  accruing,  or to  accrue  under  any  and all
insurance  policies now or hereafter  provided pursuant to the terms of security
agreements,  and all  proceeds or sums  payable for the loss of or damage to (a)
the Property or personal property, or (b) rents,  revenues,  income,  profits or
proceeds from service agreements or contracts,  leases, franchises,  concessions
or licenses of or on any part of the Property;

         TOGETHER  WITH all  contracts  and  contract  rights  and  accounts  of
Mortgagor now or hereafter  arising from contracts now or hereafter entered into
in connection with development,  construction upon, or operation of the Property
(including,  without limitation,  all warranties or guaranties by third parties,
all deposits held by or on behalf of Mortgagor,  and all management,  franchise,
license  and  service  agreements  related  to the  business  now  or  hereafter
conducted by Mortgagor on the Property);

         TOGETHER  WITH  all  accounts,   contract  rights,  goods,   inventory,
intangible  personal  property,  permits,  licenses,  liquor  licenses,  and all
personal  property,  whether actually or  constructively  attached to, connected
with, or associated with the Property;

         TOGETHER WITH all of the right,  title and interest of Mortgagor in and
to any trademarks,  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 Property;

         TOGETHER  WITH all of  Mortgagor's  interest  in all  utility  security
deposits or bonds on the Property or any part or parcel thereof;


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<PAGE>

         TOGETHER WITH all  instruments,  documents,  chattel papers and general
intangibles relating to or arising from the foregoing  collateral,  and all cash
and non-cash proceeds and products thereof; and

         TOGETHER  WITH all products,  proceeds,  additions,  improvements,  and
accessions  thereto and  replacements,  renewals,  accessions,  or substitutions
thereto, in and to any of the items hereinabove set forth.

         Mortgagor  hereby  grants  to  Mortgagee  a  security  interest  in all
fixtures, rights in action and personal property described herein. This Mortgage
is a  self-operative  security  agreement  with respect to such  property,  even
though  Mortgagor  agrees to execute and  deliver on demand such other  security
agreements,  financing statements and other instruments as Mortgagee may request
in order to perfect  its  security  interest  or to impose the lien  hereof more
specifically upon any of such property. Mortgagor additionally hereby authorizes
Mortgagee  to  record  and file from  time to time  such  financing  statements,
amendment  statements,  continuation  statements  and such other  instruments as
Mortgagee  shall  require,  in its sole  discretion,  in order  to  perfect  its
security  interest provided  hereunder.  Mortgagee shall have all the rights and
remedies  in  addition to those  specified  herein of a secured  party under the
Uniform  Commercial Code (the "Code").  Mortgagor  shall,  from time to time, on
request of Mortgagee, deliver to the Mortgagee an inventory of all such articles
of personal property in reasonable  detail.  Mortgagor  covenants and represents
that all such  personal  property  now is,  and that all  replacements  thereof,
substitutions  therefor  and  additions  thereto,   unless  Mortgagee  otherwise
consents,  will be free and clear of superior  liens,  encumbrances  or security
interests of others.  Furthermore,  in the event of default,  the parties  agree
that,  in the event the  Mortgagee  should elect to proceed with respect to said
properties  under the Code,  five (5) days notice of the sale  thereof  shall be
reasonable notice.

         Without the necessity of any further act of Mortgagor or Mortgagee, the
lien of and security interest created by this Mortgage automatically will extend
to  and  include:  (i)  any  and  all  renewals,  replacements,   substitutions,
accessions,  proceeds,  products,  additions and after-acquired  property of any
nature whatsoever attached to, located in or on, or used in the operation of the
Mortgaged  Property or any part thereof (and  Mortgagor  covenants  and warrants
that it will have good and absolute title to all of the aforesaid after-acquired
property free of any lien or encumbrance), and (ii) any and all monies, proceeds
and other property that from time to time, either by delivery to Mortgagor or by
any  instrument  (including  this  Mortgage),  may be subjected to such lien and
security interest by Mortgagor or by anyone on behalf of Mortgagor,  or with the
consent  of  Mortgagor,  or which  otherwise  may come  into the  possession  or
otherwise be subjected to the control of Mortgagee or Mortgagor pursuant to this
Mortgage or any associated loan document.

         Additionally,  Mortgagor hereby assigns to Mortgagee all of Mortgagor's
rights  and  interests  as lessor in any leases now or  hereafter  existing  and
affecting the Property  described  herein  together  with all rents,  income and
profits  due and  becoming  due  therefrom,  which  leases  shall be subject and
subordinate  to this  Mortgage  in all  respects.  In the  event of any  default
occasioning  acceleration under this Mortgage or the Note,  Mortgagor authorizes
Mortgagee to demand and collect all rents  accruing from the Mortgaged  Property
and apply the same to the  outstanding  indebtedness  and any payments thus made
and  applied  shall not cure any  default  or impair  the  Mortgagee's  right to
proceed with any legal  action to collect its entire  mortgage  debt.  Mortgagor
hereby authorizes  Mortgagee to give notice in writing of this assignment at any


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<PAGE>

time to any  tenant  whose  lease is  assigned  to  Mortgagee  by virtue of this
provision.  Prior to the occurrence of an Event of Default, Mortgagor shall have
the right to collect  said rents;  provided  however,  that even before  default
occurs,  no advance rent (other than one (1) month's advance rent and a security
deposit) shall be collected. Mortgagor further agrees to take no other act which
would impair or destroy the rights and benefits of Mortgagee hereunder.

         The Property and all of the foregoing items are  collectively  referred
to as the "Mortgaged Property".

         TO HAVE AND TO HOLD the same,  with the  tenements,  hereditaments  and
appurtenances thereunto belonging unto Mortgagee.

         PROVIDED,  HOWEVER, that if Mortgagor shall promptly pay or cause to be
paid to  Mortgagee  all sums  payable  under the  Note,  at the times and in the
manner  stipulated  therein,  all without any  deductions or credit for taxes or
other similar charges paid by Mortgagor,  as well as all future advances and all
other  sums  and  indebtedness,  obligations  and  liabilities  for  which  this
instrument is security,  and shall keep,  perform and observe all other promises
in the Note and any renewals,  extensions,  or modifications  thereof,  and also
provided  that if Mortgagor  shall  promptly  keep,  perform and observe all the
covenants and  conditions  in this  Mortgage and any extension or  modifications
thereof,  and in all other instruments  securing the Note, to be kept, performed
or observed by Mortgagor, then this Mortgage, and all the properties,  interest,
and rights hereby  granted,  conveyed and assigned  shall cease and be void, but
shall otherwise remain in full force and effect.

                                   ARTICLE ONE
                             COVENANTS OF MORTGAGOR

         Mortgagor covenants and agrees with Mortgagee as follows:

         1.01 Performance of Note, Mortgage, and other Loan Documents. Mortgagor
shall  perform,  observe  and comply  with all  provisions  of the Note and will
promptly pay to Mortgagee the principal and interest  thereon and all other sums
required to be paid by Mortgagor  under the Note when payment  shall become due,
all  without  deduction  or credit for taxes or other  similar  charges  paid by
Mortgagor,  and Mortgagor shall perform,  observe and comply with all provisions
of this Mortgage,  together with all other documentation  executed in connection
herewith.

         1.02  Warranty  of  Title.  Mortgagor  is  indefeasibly  seized  of the
Mortgaged Property in fee simple; that Mortgagor has full power and lawful right
to convey the Mortgaged  Property in fee simple as  aforesaid;  that it shall be
lawful for Mortgagee at all times hereafter peaceably and quietly to enter upon,
hold, occupy and enjoy the Mortgaged  Property;  that the Mortgaged Property and
every  part  thereof  is free from all liens and  encumbrances  except  (a) that
certain first mortgage in favor of Charley Zeches, in her capacity as Trustee of
Lakes  Holding Trust U/A dated July 27, 2001 (the "Zeches  Mortgage"),  (b) that
certain  second  mortgage  in  favor  of  Mitchell  Entertainment  Company  (the
"Mitchell  Mortgage"),  (c) the current  year's  taxes which are not yet due and
owing,  and (d) all  permitted  title  exceptions  expressly  identified  in any
mortgagee title insurance  policy accepted by the Mortgagee,  and that Mortgagor


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<PAGE>

will  make  such  other  and  further  assurances  to  perfect  the title to the
Mortgaged Property in Mortgagee as may hereafter be required; and that Mortgagor
does hereby fully  warrant the title to the  Mortgaged  Property and will defend
the same against the lawful  claims of all persons  whomsoever.  For purposes of
this  Article,  record  notice  of any  title  defect  shall  not in any  manner
constitute notice to Mortgagee of such title defect. Mortgagor acknowledges that
Mortgagee is acting in reliance upon the above warranties and representations of
Mortgagor concerning title to the Mortgaged Property.

         1.03 Zoning.  All applicable  zoning laws,  ordinances and  regulations
affecting  the  Mortgaged  Property  permit the current use and occupancy of the
Mortgaged Property and, if applicable, the intended use to be made by Mortgagor.

         1.04     Taxes and Liens, and Utility Charges.

                  (a) Mortgagor  shall pay promptly,  when and as due (and on or
before such date so as to obtain the  maximum  available  discount),  and shall,
upon Mortgagee's request, promptly exhibit to Mortgagee receipts for the payment
of all taxes, assessments,  rates, dues, charges, fines and impositions of every
kind whatsoever now or hereafter imposed, levied or assessed upon or against the
Mortgaged Property or any part thereof,  or upon or against this Mortgage or the
indebtedness  or other sums secured  hereby,  or upon or against the interest of
Mortgagee in the Mortgaged  Property,  as well as all income taxes,  assessments
and other  governmental  charges  levied and  imposed  by the  United  States of
America or any state,  county,  municipality,  borough or other taxing authority
upon or against  Mortgagor or in respect of the  Mortgaged  Property or any part
thereof, and any charge which, if unpaid, would become a lien or charge upon the
Mortgaged  Property  before  they  become  delinquent  and before  any  interest
attaches or any penalty is incurred.

                  (b)  Mortgagor  shall not permit or suffer  any  construction,
contractor's, mechanic's, laborer's, or materialmen's statutory or other lien to
be created or to remain a lien upon any of the Mortgaged Property, which lien is
not released or terminated within thirty (30) days of the filing thereof.

                  (c)  Notwithstanding  any other  provision  of this  Mortgage,
Mortgagor shall have the right to contest any taxes,  liens and charges provided
it proceeds with due diligence and gives Mortgagee adequate assurance by bonding
such  disputed  liens or by  depositing  the amounts of such  disputed  taxes or
charges with Mortgagee,  which deposited amounts shall be returned to Mortgagor,
upon  resolution  of such  contest and  evidence  satisfactory  to  Mortgagee of
Mortgagor's compliance with any determination thereof.

                  (d) In the  event  of the  passage,  after  the  date  of this
Mortgage, of any law deducting from the value of the Mortgaged Property, for the
purpose of taxation,  any lien  thereon,  or changing in any way the laws now in
force for the taxation of mortgages or debts secured by mortgages, or the manner
of the collection of any such taxes, so as to affect this Mortgage,  or imposing
payment of the whole or any portion of any taxes,  assessments  or other similar
charges against the Mortgaged Property upon Mortgagee,  the indebtedness secured
hereby  shall  immediately  become due and  payable at the option of  Mortgagee;
provided,  however,  that if any such law shall  impose a tax upon  Mortgagee or
increase any tax now payable by Mortgagee,  such election by Mortgagee  shall be


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<PAGE>

ineffective  if prior to the due date: (i) Mortgagor is permitted by law and can
become legally  obligated to pay such tax or the increased  portion  thereof (in
addition to all interest and charges payable hereunder and under the Note); (ii)
Mortgagor does pay such tax or increased  portion;  and (iii)  Mortgagor  agrees
with Mortgagee in writing to pay, or reimburse Mortgagee for the payment of, any
such tax or increased portion thereof when thereafter levied or assessed against
the Mortgaged  Property or any portion  thereof.  The  obligations  of Mortgagor
under such agreement shall be secured hereby.

         The Tax and  Interest  Escrow  Account  as defined in the Note shall be
held in accordance with the terms and provisions of Paragraph 1.06 below.

         1.05 Insurance. Mortgagor shall obtain, deliver to and maintain for the
benefit of Mortgagee  (and without  cost to  Mortgagee)  during the term of this
Mortgage,  with all  premiums  paid  thereon and without  notice or demand,  the
following insurance with respect to the Mortgaged Property:

                  (a) If and as applicable,  Mortgagor shall obtain,  deliver to
and  maintain  for the  benefit of  Mortgagee  an "all risks"  permanent  hazard
insurance policy along with a flood insurance policy, if the Mortgaged  Property
is in a  designated  flood  plain area.  The policy or  policies  must be from a
company  satisfactory to Mortgagee,  must cover all risks (with full replacement
coverage)  required  to be covered by  Mortgagee  (such as, but not  limited to,
fire, extended coverage,  windstorm,  sprinkler leakage coverage, if applicable,
theft,  boiler  explosion  coverage,  if applicable,  building  ordinance or law
coverage,  and  vandalism  coverage)  and must be in an amount  satisfactory  to
Mortgagee and in no event less than the amount due under the Note and sufficient
to avoid the application of any co-insurance provisions, must include provisions
for a minimum  thirty (30) day prior written notice to Mortgagee of any intended
policy cancellation or non-renewal,  and must designate Mortgagee as a mortgagee
and loss payee.

                  (b) Mortgagor  shall obtain,  deliver to, and maintain for the
benefit of Mortgagee (general  comprehensive  public) liability  insurance (i.e.
commercial general liability  insurance) against claims for bodily injury, death
and property  damage  occurring in, on or about the  Mortgaged  Property in such
amounts as may be required by Mortgagee but not less than Two Million and 00/100
Dollars  ($2,000,000.00)  in the case of bodily  injury or death to one  person,
Five Million and 00/100 Dollars ($5,000,000.00) in any one occurrence and in the
annual aggregate, and Two Million and 00/100 Dollars ($2,000,000.00) in the case
of  property  damage.  The  general  comprehensive  public  liability  insurance
policies must be from a company  reasonably  satisfactory  to Mortgagee and must
include  provisions for a minimum of thirty (30) days advance  written notice to
Mortgagee of any intended policy  cancellation or non-renewal and must designate
Mortgagee as a mortgagee and an additional named insured.

                  (c) If required by Mortgagee,  and otherwise applicable to the
business of Mortgagor,  Mortgagor shall obtain,  deliver to and maintain for the
benefit of Mortgagee,  Workers'  Compensation  Insurance in the statutory amount
naming Mortgagor as owner of the Mortgaged Property.


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<PAGE>

                  (d) Mortgagor  shall  obtain,  deliver to and maintain for the
benefit of Mortgagee  insurance coverage (and changes to the above requirements)
during the term of this  Mortgage in such  amounts and to protect  against  such
other insurable hazards, casualties and contingencies as may, from time to time,
be required by Mortgagee.

                  (e) Notwithstanding anything contained in this Mortgage or the
other loan documents to the contrary,  each insurance policy required  hereunder
(liability,  casualty or builder's risk  insurance)  shall include  coverage for
acts  of  terrorism.  If  the  applicable  insurance  policy  excludes  acts  of
terrorism,  Mortgagor  shall be  required to purchase  separate  insurance  that
covers  acts  of  terrorism,  which  insurance  shall  be in  form  and  content
acceptable to Mortgagee, in its sole discretion.

         All policies of insurance  required  hereunder shall: (a) be written by
carriers  which are licensed or authorized to transact  business in the State of
Florida and are rated  "B+"-Class XI or better according to the latest published
Best Key Rating Guide,  and which shall  otherwise be acceptable to Mortgagee in
all other  respects;  (b) provide that the Mortgagee  shall receive a minimum of
thirty  (30) days prior  written  notice  from the issuer  before  cancellation,
modification, material change or non-renewal of the policy; (c) provide for full
replacement;  (d) be written without a deductible provision and for such amounts
as are sufficient to prevent Mortgagor from becoming excessively self-insured or
a co-insurer thereunder; (e) contain no exclusion for acts of terrorism; and (f)
provide that Mortgagee be protected as a lien holder,  regardless of any actions
of  Mortgagor.  Mortgagor  shall  pay  promptly  when due any  premiums  on such
insurance policies and on any renewals thereof.  The form of such policies,  the
companies  issuing  them and the amount of coverage  which is required  shall be
acceptable to Mortgagee. Each policy, including policies for any amounts carried
in excess of the  required  minimum and policies  not  specifically  required by
Mortgagee,  shall be maintained in full force and effect, shall be assigned, and
the original policies delivered to Mortgagee with premiums prepaid. All policies
shall be endorsed  with a standard  mortgagee  clause in favor of  Mortgagee  as
first mortgagee, not subject to contribution or assessment.  If the insurance or
any part thereof  shall expire or be withdrawn or become void or  inadequate  by
Mortgagor's breach of any condition  thereof,  or become void or insufficient by
reason of the failure or  impairment  of the capital of any company in which the
insurance  may then be carried,  or if for any reason  whatsoever  the insurance
shall be unsatisfactory to Mortgagee, Mortgagor shall place new insurance on the
Mortgaged Property,  satisfactory to Mortgagee.  The original policies, with the
premiums  paid,  shall be delivered to Mortgagee  upon the execution  hereof and
renewal policies with the premiums paid shall be delivered to Mortgagee at least
thirty (30) days before  expiration of the old  policies.  In the event of loss,
Mortgagor will give immediate notice thereof to Mortgagee and Mortgagee may make
proof  of loss if not  made  promptly  by  Mortgagor  and  Mortgagee  is  hereby
appointed  attorney-in-fact for Mortgagor,  which appointment is coupled with an
interest,  to make  said  proof  of loss  and give a  receipt  for any  proceeds
collected  under such  policies.  Each  insurance  company  concerned  is hereby
authorized  and  directed  to make  payment  under such  insurance,  directly to
Mortgagee.  All such  policies  herein  are  hereby  assigned  to  Mortgagee  as
additional  security  for the payment of the  indebtedness  hereby  secured.  If
Mortgagee becomes the owner of the Mortgaged  Property,  or any part thereof, by
foreclosure or otherwise,  such  policies,  including all rights and interest of
the Mortgagor thereunder, shall become the absolute property of Mortgagee.


                                       8
<PAGE>

         The address of the Mortgagee  under any mortgagee and loss payee clause
shall be set forth as follows:

                     Tarragon South Development Corp.
                     200 East Las Olas Blvd., Suite 1660
                     Fort Lauderdale, FL  33301
                     Attn:   O.H. Fagerli, Jr., Certified Financial Officer

         After  the  occurrence  of an  Event  of  Default,  at  the  option  of
Mortgagee,  and assuming  the  Mortgagee  under the Zeches  Mortgage or Mitchell
Mortgage  has not  otherwise  exercised  this  option,  Mortgagor  shall  pay to
Mortgagee,  together with the regularly  scheduled payment due under the Note, a
sum  equal to  one-twelfth  (1/12) of the  annual  amount  necessary  to pay all
insurance  premiums  so as to  keep  all  required  insurance  on the  Mortgaged
Property  in full  force and  effect.  All  monies  thus  paid  shall be held by
Mortgagee  without  interest and in accordance  with the terms and provisions of
Paragraph 1.06 below,  subject to any prior exercise by the Mortgagee  under the
Zeches Mortgage or Mitchell Mortgage.

         1.06 Escrow Account. If requested by Mortgagee,  Mortgagor shall pay to
Mortgagee,  together  with and in  addition  to the  payment  of  principal  and
interest payable under the Note secured hereby, an amount reasonably  sufficient
(as estimated by Mortgagee) to provide  Mortgagee  with funds to pay such taxes,
assessments,  insurance premiums (insurance premiums to be paid only if required
by Mortgagee and upon notification  from Mortgagee),  and other charges next due
so that  Mortgagee will have  sufficient  funds on hand to pay the same at least
thirty (30) days before  whichever of the following dates first occurs:  (a) the
date on which they become past due;  (b) the date on which there is any discount
loss; or (c) the date on which there is additional  interest or penalty charged.
In no event shall  Mortgagee be liable for any interest on any amount paid to it
under any escrow  requirement herein (unless required by applicable law) and the
money so received may be held in a special  escrow account  properly  designated
for the purposes designated above or may be commingled with the general funds of
Mortgagee.  Upon demand of  Mortgagee,  Mortgagor  shall  deliver to  Mortgagee,
within fifteen (15) days after such demand, such additional sums of money as are
necessary to enable Mortgagee to pay the above noted  impositions,  premiums and
charges when due. In the case of a default by Mortgagor hereunder, Mortgagee may
apply any amount under this  paragraph  remaining to  Mortgagor's  credit to the
reduction of principal or interest or any other charge due and owing  hereunder,
at such times and in such a manner as Mortgagee shall determine, in its sole and
absolute  discretion.  Upon payment in full of the indebtedness  secured by this
Mortgage, the amount of any unused escrow funds shall be paid over to the person
or entity  entitled to receive the same.  This Section 1.06 shall be subject and
subordinate  to the  rights of the  Mortgagee  under  the  Zeches  Mortgage  and
Mitchell Mortgage.

         1.07  Condemnation.  If all or any  substantial  part of the  Mortgaged
Property shall be damaged or permanently taken through  condemnation (which term
when  used in this  Mortgage  shall  include  any such  damage  or  taking  by a
governmental  authority,  and any transfer by private sale in lieu thereof), the
entire  indebtedness  secured hereby shall,  at the option of Mortgagee,  become
immediately  due and payable.  Subject to the rights of the Mortgagee  under the
Zeches  Mortgage  and  Mitchell  Mortgage,  Mortgagee  shall be  entitled to all
compensation,   awards  and  other  payments  or  relief   therefor.   All  such
compensation,  awards and other payments or relief  therefor are hereby assigned


                                       9
<PAGE>

by Mortgagor to  Mortgagee.  Mortgagee  may release any monies so received by it
without  affecting the lien of the Mortgage or may apply the same in such manner
as Mortgagee shall determine,  to the reduction of the  indebtedness  secured by
this Mortgage and then,  if any surplus  remains  after such  application,  such
surplus  shall be paid to  Mortgagor.  Mortgagor  agrees to execute such further
assignments  of any  compensations,  awards and other payments or relief for any
such condemnation as Mortgagee may require.

         Notwithstanding the foregoing, however, Mortgagee shall, at its option,
have the right to appear in and defend any condemnation suit in its own name.

         1.08     Care of Property/Restoration Upon Casualty or Condemnation.

                  (a)  Mortgagor  shall  preserve  and  maintain  the  Mortgaged
Property in good condition and repair.  Mortgagor  shall not remove or demolish,
alter  or  change  the  use of any  building,  structure  or  other  improvement
presently or  hereafter  on the  Mortgaged  Property  without the prior  written
consent of Mortgagee.  Mortgagor  shall not permit,  commit or suffer any waste,
impairment or  deterioration  of the Mortgaged  Property or of any part thereof,
and will not take any action which will materially  increase the risk of fire or
other hazard to the Mortgaged Property or to any part thereof.

                  (b) Except as otherwise provided in this Mortgage, no fixture,
personal  property or other part of the Mortgaged  Property  shall be removed or
materially demolished without the prior written consent of Mortgagee.  Mortgagor
may  sell or  otherwise  dispose  of,  free  from  the  lien  of this  Mortgage,
furniture,  furnishings,  equipment, tools, appliances,  machinery,  fixtures or
appurtenances,   subject  to  the  lien  hereof,  which  may  become  worn  out,
undesirable  or obsolete  only if they are  replaced  concurrently  with similar
items of at least  equal value  which  shall,  without  further  action,  become
subject to the lien of this Mortgage.

                  (c)  Mortgagee  may  enter  upon  and  inspect  the  Mortgaged
Property at any reasonable time during the term of this Mortgage.

                  (d) Mortgagor will promptly comply with all present and future
laws, ordinances,  rules and regulations of any governmental authority affecting
the Mortgaged Property or any part thereof. Mortgagor reserves and maintains the
right if Mortgagor  deems any item referred to in this  Paragraph  1.08(d) to be
illegal,  improperly  applied or otherwise  inconsistent with the legal right of
Mortgagor,  to contest  and/or  litigate  such item so long as the  validity  is
contested by Mortgagor  with  diligence  and in good faith and with  appropriate
deposits,  if  required,  paid  in  escrow  with  the  Clerk  of the  Court,  if
appropriate,  so that  accumulation of penalties are avoided or, if not avoided,
an additional deposit  sufficient to cover all such penalties.  In the event any
payment  of the  whole of any  amount  due shall be  necessary  to  prevent  any
foreclosure on the Mortgaged Property, then Mortgagor shall pay all such amounts
in sufficient time to prevent any such foreclosure.

                  (e) If the  Mortgaged  Property or any part thereof is damaged
or destroyed by fire, by condemnation,  or any other cause,  Mortgagor will give
immediate written notice of the same to Mortgagee.


                                       10
<PAGE>

                  (f) Each  property  insurance  policy  shall  provide that the
proceeds  of  insurance  paid on  account of any  damage or  destruction  to the
Mortgaged Property, or any part thereof,  shall be paid to Mortgagee.  Mortgagor
also acknowledges that all proceeds of condemnation (i.e., compensation,  awards
and other  payment  or relief  therefor)  have been  assigned  by  Mortgagor  to
Mortgagee  (such  proceeds  of  insurance  and   condemnation   are  hereinafter
collectively referred to as the "Proceeds"). Mortgagor shall promptly deliver to
Mortgagee  any  Proceeds  which are paid  directly to  Mortgagor by the casualty
insurance carrier or by any governmental or quasi-governmental authority. In the
event of damage or destruction to the Mortgaged Property or any portion thereof,
whether insured or uninsured,  or if any part of the Mortgaged Property shall be
physically  damaged through  condemnation,  Mortgagor shall, as set forth above,
give immediate  written notice thereof to Mortgagee and Mortgagee shall have the
option,  in its sole  and  absolute  discretion,  to apply  any  portion  of the
Proceeds to the payment of the  indebtedness  evidenced by the Note, or to allow
all or any  portion of the  Proceeds to be used for the  restoration,  repair or
replacement  of the  Mortgaged  Property or  applicable  part thereof under such
conditions as may be established by Mortgagee.

         1.09  After  Acquired   Property.   The  lien  of  this  Mortgage  will
automatically  attach,  without  further  act,  to all after  acquired  personal
property  owned by  Mortgagor  located  in or on,  or  attached  to,  or used or
intended  to be used in  connection  with,  the  Mortgaged  Property or any part
thereof.

         1.10 Expenses.  Mortgagor  shall pay, or reimburse  Mortgagee,  for all
costs, fees, charges,  taxes (including,  without limitation,  documentary stamp
tax,  intangible taxes (recurring and nonrecurring)) and expenses of every kind,
including the cost of an abstract of title to said lands, found to be convenient
or expedient in connection  with any suit for the  foreclosure of this Mortgage,
and also including  reasonable  attorney's fees incurred or expended at any time
by Mortgagee because of the failure of Mortgagor to pay the Note as agreed or of
Mortgagor  to perform,  comply with,  and abide by all or any of the  covenants,
conditions  and  stipulations  of this Mortgage  and/or the other loan documents
evidencing or securing the Note, and in the  foreclosure of this Mortgage and in
collecting the amount due under the Note secured  hereby,  with or without legal
proceedings,  and to  reimburse  Mortgagee  for every  payment made for any such
purpose  with  interest  from date of every such payment at the Default Rate (as
defined in the Note);  such payments and  obligations,  with interest thereon as
aforesaid,  shall be  secured  by the lien  hereof.  Any  judgment  obtained  by
Mortgagee  against  Mortgagor  as to any  amounts  due  under  the  Note or this
Mortgage shall also bear interest at the Default Rate.

         1.11 Books and Records.  Mortgagor will keep complete books and records
of  account  in  accordance  with  generally  accepted   accounting   principles
consistently  applied ("GAAP")  covering and relating to the Mortgaged  Property
and will permit  Mortgagee or Mortgagee's  agents,  accountants and attorneys to
inspect the Mortgaged Property and examine Mortgagor's books and records as they
relate to the Mortgaged  Property,  at such reasonable times as may be requested
by Mortgagee, and at Mortgagee's sole cost.

         1.12 Mortgagor as Lessor. Mortgagor represents that no leases currently
affect the Mortgaged  Property.  Mortgagor agrees: (a) not to enter into any new
lease  agreement,  without  Mortgagee's  consent,  which  shall be  withheld  in
Mortgagee's sole and absolute  discretion;  (b) not to collect any advance rents


                                       11
<PAGE>

other than first and last month's advance rent and a security  deposit;  (c) not
to  discount  any  future  accruing  rents,  except  in the  ordinary  course of
business;  (d) not to execute any other assignments of any lease or any interest
therein  or any of the  rents  thereunder;  (e) to  perform  all of  Mortgagor's
covenants and agreements as lessor under said leases and not to suffer or permit
to occur any release of liability  of the lessees,  or any rights of the lessees
to withhold  payment of rent;  and to give  prompt  notice to  Mortgagee  of any
notice of default on the part of Mortgagor with respect to said leases  received
from the  lessees;  (f) that none of the rights or remedies of  Mortgagee  under
this  Mortgage  shall be delayed or in any way  prejudiced  by  assignment;  (g)
notwithstanding  any variation of the terms of this Mortgage or any extension of
time for payment hereunder or any release of part or parts of the lands conveyed
hereunder, the leases and benefits thereby assigned shall continue as additional
security in accordance with the terms hereof; (h) not to alter, modify or change
the terms of any guarantees with respect to the leases without the prior written
consent of  Mortgagee,  except in the ordinary  course of  business;  (i) not to
consent to any assignment of any lease or leases, or any subletting  thereunder,
whether or not in accordance with their terms, without the prior written consent
of  Mortgagee,  except in the ordinary  course of business;  (j) not to request,
consent to,  agree to, or accept a  subordination  of any lease or leases to any
mortgage or other encumbrance now or hereafter affecting the Mortgaged Property,
except for this  Mortgage if  requested  by  Mortgagee;  (k) not to exercise any
right  of  election,  whether  specifically  set  forth  in any  such  lease  or
otherwise,  which would in any way diminish  the lessee's  liability or have the
effect of shortening the stated term of the lease, except in the ordinary course
of  business;  and (l) not to sell,  transfer,  assign,  or remove any  personal
property now or hereafter located on the Mortgaged Property,  unless such action
results in  substitution or replacement  with similar items,  owned by Mortgagor
and not otherwise encumbered,  of equal value, without the prior written consent
of  Mortgagee.  Mortgagor  shall procure and deliver to Mortgagee at the time of
executing the Mortgage,  or at any time within thirty (30) days after notice and
demand, estoppel letters or certificates from each lessee, tenant or occupant in
possession of the Mortgaged Property,  as required by, and in form and substance
satisfactory to, Mortgagee and deliver to Mortgagee a recorded assignment of all
the lessor's  interest in such leases,  in form and  substance  satisfactory  to
Mortgagee  (in addition to the  assignment  and mortgage  herein),  and proof of
proper service of a copy of such assignment on each lessee, either personally or
by prepaid certified mail, return receipt requested.  All forms of lease, rental
or use agreements (and amendments  thereto) for the Mortgaged  Property,  or any
part thereof,  shall be submitted to Mortgagee for approval for lending purposes
prior to becoming  binding upon Mortgagor,  unless this requirement is waived in
writing by Mortgagee.

         1.13 Environmental Contamination/Hazardous Wastes. Mortgagor shall keep
and maintain the Mortgaged  Property in compliance  with, and shall not cause or
permit the Mortgaged Property to be in violation of, any federal, state or local
laws, ordinances or regulations,  including,  without limitation, those relating
to zoning,  building,  occupational safety and health,  industrial hygiene or to
the  environmental  conditions  on,  under  or  about  the  Mortgaged  Property,
including, but not limited to soil and ground water conditions.  Mortgagor shall
not use,  generate,  manufacture,  store or dispose  of, on,  under or about the
Mortgaged  Property or transport to or from the Mortgaged Property any flammable
explosives, radioactive materials, including, without limitation, any substances
defined as or included in the definition of "hazardous  substances,"  "hazardous
wastes,"  "hazardous  materials,"  and "toxic  substances"  under any applicable
federal or state laws or regulations (collectively, the "Hazardous Materials").


                                       12
<PAGE>

         Mortgagee,  at its sole option and at Mortgagor's  expense, may obtain,
at any time  and from  time to time  (but  not  more  than  once in any 12 month
period,  unless there exists  reasonable  evidence of contamination of or at the
Mortgaged  Property or in  proximity  thereof,  or the  existence  of  Hazardous
Materials at or upon the Mortgaged  Property or in proximity thereof) so long as
any obligation  hereunder remains  unsatisfied,  an environmental  assessment or
audit  certified  to  Mortgagee  from  a  reputable  environmental  engineer  of
Mortgagee's choice for the purpose of determining whether the Mortgaged Property
has been or presently is being used for the handling,  storage,  transportation,
or disposal of any Hazardous  Materials and/or to determine the existence of any
contamination on the Mortgaged Property or violation of any environmental law at
the Mortgaged Property, whether caused off-site or on-site and whether caused by
Mortgagor or a third party. Said environmental assessment or audit shall include
a study of the existing surface and subsurface conditions of the Property and an
analysis of the soil, including sufficient test borings to determine whether any
contamination  exists.  Mortgagor  hereby  grants to  Mortgagee,  its agents and
contractors, an irrevocable license to enter upon the Mortgaged Property for the
purpose of conducting  any  environmental  testing  desired by Mortgagee,  which
license shall remain in place until this Mortgage has been  satisfied of record.
In the event  Mortgagee  requests such a report and said report  indicates  such
handling,  storage,  transportation,  or disposal of any Hazardous Materials, or
the existence of any contamination on the Mortgaged Property or violation of any
environmental law in connection with the Mortgaged  Property,  the same shall be
and  constitute,  at the option of  Mortgagee,  an Event of  Default  hereunder.
Mortgagee  may  require  that  all  violations  of law with  respect  to same be
corrected and that Mortgagor obtain all necessary  environmental  permits before
Mortgagee  shall  fund any  initial or  subsequent  advance  under the Note,  at
Mortgagee's sole option.

         Mortgagor shall immediately advise Mortgagee in writing of: (a) any and
all enforcement,  cleanup,  removal or other  governmental or regulatory actions
instituted, completed or threatened pursuant to any applicable federal, state or
local  laws,  ordinances  or  regulations  relating to any  Hazardous  Materials
affecting the Property (the "Hazardous  Materials Laws"); (b) all claims made or
threatened  by any third party  against  Mortgagor or the  Property  relating to
damage, contribution,  cost recovery compensation, loss or injury resulting from
any Hazardous  Materials (the matters set forth in subsections (a) and (b) above
are collectively  referred to herein as the "Hazardous  Materials Claims");  and
(c) Mortgagor's discovery of any occurrence or condition on any immovable (real)
property  adjoining  or in the  vicinity  of the  Property  that could cause the
Property or any part thereof to be subject to any restrictions on the ownership,
occupancy,  transferability or use of the Property under any Hazardous Materials
Laws.

         Mortgagee  shall have the right to join and  participate in, as a party
if it so elects,  any legal  proceedings or actions initiated in connection with
any Hazardous  Materials  Claims and to have its reasonable  attorneys' fees and
paralegal  charges and all costs  incurred in connection  with such  proceedings
paid by  Mortgagor.  Mortgagor  shall  be  solely  responsible  for,  and  shall
indemnify,  defend  and hold  Mortgagee,  its  directors,  officers,  employees,
agents, successors and assigns harmless from and against any loss, damage, cost,
expense or liability,  directly or indirectly  arising out of or attributable to
the use, generation,  storage, release, threatened release, discharge, disposal,
or presence of Hazardous  Materials on, under or about the Property,  including,
without limitation:  (a) all foreseeable consequential damages; (b) the costs of
any required or necessary repair, cleanup or detoxification of the Property, and
the preparation and  implementation  of any closure,  remedial or other required
plans;  and (c) all  reasonable  costs and  expenses  incurred by  Mortgagee  in
connection  with  subsections  (a)  and  (b),  including,  but not  limited  to,
reasonable attorneys' fees and paralegal charges.


                                       13
<PAGE>

         Without   Mortgagee's  prior  written  consent,   which  shall  not  be
unreasonably withheld,  Mortgagor shall not take any remedial action in response
to the presence of any Hazardous  Materials on, under, or about the Property nor
enter into any settlement  agreement,  consent  decree,  or other  compromise in
respect to any Hazardous  Material Claims,  which remedial  action,  settlement,
consent or compromise  might,  in Mortgagee's  reasonable  judgment,  impair the
value of Mortgagee's  security hereunder;  provided,  however,  that Mortgagee's
prior consent shall not be necessary in the event that the presence of Hazardous
Materials on, or under, or about the Property  either poses an immediate  threat
to the health,  safety or welfare of any  individual or is of such a nature that
an immediate  remedial  response is  necessary  and it is not possible to obtain
Mortgagee's  consent  before  taking such  action,  provided  that in such event
Mortgagor shall notify  Mortgagee as soon as practicable of any action so taken.
Mortgagee  agrees not to withhold  its  consent,  where such consent is required
hereunder,  if either (a) a particular  remedial action is ordered by a court of
competent   jurisdiction,   or  (b)  Mortgagor  establishes  to  the  reasonable
satisfaction  of  Mortgagee  that  there is no  reasonable  alternative  to such
remedial  action which would result in less  impairment of Mortgagee's  security
hereunder.

         Mortgagor hereby agrees to indemnify Mortgagee and hold Mortgagee,  its
directors,  officers, employees, agents, successors and assigns harmless (except
to the  extent  caused by the gross  negligence  or  willful  misconduct  of the
Mortgagee) from and against any and all claims,  losses,  damages,  liabilities,
fines, penalties,  charges,  administrative and judicial proceedings and orders,
judgments,  remedial action  requirements,  enforcement actions of any kind, and
all costs and expenses  incurred in  connection  therewith  (including,  but not
limited to, attorneys' fees,  paralegal charges and expenses),  arising directly
or indirectly, in whole or in part, out of (a) any Hazardous Materials Claims or
(b) the presence on or under the  Property of any  Hazardous  Materials,  or any
releases  or  discharges  of any  Hazardous  Materials  on,  under  or from  the
Property,  or (c) any activity  carried on or undertaken on or off the Property,
whether prior to or during the term of this  Mortgage,  and whether by Mortgagor
or  any   predecessor-in-title   or  any  employees,   agents,   contractors  or
subcontractors of Mortgagor or any predecessor-in-title, or any third persons at
any time occupying or present on the Property,  in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or disposal of
any Hazardous Materials at any time located or present on or under the Property.
The foregoing indemnity shall further apply to any residual  contamination on or
under the Property, or affecting any natural resources, and to any contamination
of any property or natural  resources arising in connection with the generation,
use, handling,  storage,  transport or disposal of any such Hazardous Materials,
and irrespective of whether any of such activities were or will be undertaken in
accordance with applicable laws, regulations, codes and ordinances.

         Mortgagor  agrees at all times to comply fully and in a timely  manner,
and to cause all tenants,  employees,  agents, contractors and subcontractors of
Mortgagor  and any other  persons  occupying  or present on the  Property  to so
comply,  with  all  applicable  federal,  state  and  local  laws,  regulations,
guidelines,  codes and ordinances  applicable to the use, generation,  handling,
storage,  treatment,  transport and disposal of any  Hazardous  Materials now or
hereafter  located or present on or under the Property,  and Mortgagor agrees to
indemnify,  defend  and hold  Mortgagee,  its  directors,  officers,  employees,
agents,  successors  and assigns,  harmless from and against any and all claims,


                                       14
<PAGE>

losses,  damages,  liabilities,  fines, penalties,  charges,  administrative and
judicial  proceedings  and  orders,  judgments,  remedial  action  requirements,
enforcement  actions  of any  kind,  and all  costs  and  expenses  incurred  in
connection therewith (including,  but not limited to reasonable attorneys' fees,
paralegal charges and expenses),  arising directly or indirectly, in whole or in
part,  from  any  failure  of  Mortgagor,   its  tenants,   employees,   agents,
contractors, subcontractors or other such persons, to comply with any such laws,
regulations, guidelines, codes or ordinances.

         The  obligations  of Mortgagor to indemnify,  defend and hold Mortgagee
harmless  under this section shall survive any  foreclosure  of this Mortgage or
any transfer of the Property  whatsoever and repayment of the loan(s) secured by
this Mortgage.

         1.14  Mortgagee's  Right to Perform  Upon  Defaults  of  Mortgagor.  If
Mortgagor defaults in the payment of any tax,  assessment,  encumbrance or other
imposition,  in  its  obligation  to  furnish  insurance  hereunder,  or in  the
performance  or  observance  of any other  covenant,  condition  or term in this
Mortgage,  Mortgagee  may,  at its option,  perform or observe the same  without
waiving any rights it may have  hereunder,  and all payments  made (whether such
payments are regular or accelerated payments) and costs and expenses incurred or
paid  by  Mortgagee  in  connection  therewith  shall  become  due  and  payable
immediately.  The  amounts  so  incurred  or paid by  Mortgagee,  together  with
interest  thereon at the maximum rate  permitted by applicable law from the date
incurred until paid by Mortgagor, shall be added to the indebtedness and secured
by the lien of this  Mortgage.  Nothing  contained  herein shall be construed as
requiring  Mortgagee to advance or expend  monies for any purposes  mentioned in
this paragraph, or for any other purpose. Mortgagee is hereby empowered to enter
and to authorize others to enter upon the Mortgaged Property or any part thereof
for the  purpose  of  performing  or  observing  any  such  defaulted  covenant,
condition or terms,  without thereby  becoming liable to Mortgagor or any person
in possession holding under Mortgagor.

                                   ARTICLE TWO
                                    DEFAULTS

         2.01 Event of Default.  The term "Event of  Default"  wherever  used in
this Mortgage, shall mean any one or more of the following events:

                  (a) failure by Mortgagor to pay when due any  installments  of
principal or interest as required  under the Note or any other default under the
terms and  provisions  of the Note or failure by Mortgagor to pay, when due, any
tax deposits, taxes, assessments,  liens, charges,  insurance premiums or to pay
said sums into the escrow account, if required hereunder; or

                  (b) failure by Mortgagor to duly keep, perform and observe any
other covenant,  condition or agreement in this Mortgage,  any other  instrument
securing the Note or any other  instrument  or loan  document  collateral to the
Note or executed in connection with the sums secured hereby, subject to the Cure
Period as set forth in the Note; or

                  (c)  the   commencement  of  levy,   execution  or  attachment
proceedings  against  Mortgagor,  or the  application  for or  appointment  of a
liquidator, receiver, custodian,  sequestrator,  conservator,  trustee, or other
similar judicial officer; or


                                       15
<PAGE>

                  (d) the  insolvency  in the  bankruptcy  or equity  sense,  of
Mortgagor; or

                  (e)  the  assignment  for the  benefit  of  creditors,  or the
admission in writing of an  inability to pay any debts  generally as they become
due,  or  the  ordering,  the  winding-up  or  liquidation  of its  affairs,  by
Mortgagor; or

                  (f) the  commencement of a case against  Mortgagor,  under any
insolvency,  bankruptcy,  creditor adjustment,  debtor rehabilitation or similar
laws,  state or federal,  or the  determination by any of them to request relief
under any insolvency,  bankruptcy, creditor adjustment, debtor rehabilitation or
similar proceeding, state or federal, including, without limitation, the consent
by any of  them  to the  appointment  of or  taking  possession  by a  receiver,
liquidator,  assignee, trustee, custodian,  sequestrator or similar official for
it or for any of its respective property or assets; or

                  (g) failure to comply with the specific prohibitions contained
herein; or

                  (h) if any warranty or representation  of Mortgagor  contained
herein or contained in any of the associated  loan documents  prove to be untrue
or misleading in any material respect; or

                  (i)  if  the  Mortgaged  Property  is  subject  to  actual  or
threatened  waste,  or any part  thereof,  be removed,  demolished or materially
altered so that the value of the Mortgaged Property is diminished; or

                  (j) if any  federal  or  state  tax  lien or claim of lien for
labor or material is filed of record against Mortgagor or the Mortgaged Property
and is not removed by payment or  transfer  of lien to bond  within  thirty (30)
days from the date of recording; or

                  (k) if foreclosure proceedings (whether judicial or otherwise)
be  instituted on any mortgage or any lien of any kind secured by any portion of
the Mortgaged Property; or

                  (l) if  Mortgagor  defaults  under  any  other  loan  made  by
Mortgagee to Mortgagor; or

                  (m) if Mortgagor defaults under that certain mortgage in favor
of Charley  Zeches,  in her  capacity  as Trustee of Lakes  Holding  Trust under
Agreement dated July 27, 2001, securing a note evidencing a loan in the original
principal amount of  $7,000,000.00,  dated December 20, 2004,  recorded December
27, 2004 in Official  Records Book 38764,  Page 1973,  of the Public  Records of
Broward County, Florida (the "First Mortgage"),or any other document executed in
connection with the First Mortgage; or

                  (n) if Mortgagor defaults under that certain mortgage in favor
of  Mitchell  Entertainment  Company,  a  Delaware  limited  liability  company,
securing  a  note  evidencing  a  loan  in  the  original  principal  amount  of
$3,000,000.00,  dated December 20, 2004,  recorded December 27, 2004 in Official
Records Book 38765,  Page 127, of the Public Records of Broward County,  Florida
(the "Second  Mortgage"),  or any other document executed in connection with the
Second Mortgage; or


                                       16
<PAGE>

                  (o) if Mortgagor  defaults  under that certain  Agreement  for
Purchase  and  Sale   between   Mortgagor   and   Mortgagee,   dated   effective
______________August 29, 2005, as may be amended ; or

                  (p) the incurrence of any additional indebtedness,  secured by
any interest in the Mortgaged  Property,  without the prior  written  consent of
Mortgagee,  which  consent  shall  be in the  sole and  absolute  discretion  of
Mortgagee.; or

                  (q) in the event that a event arises,  in the sole  discretion
of  Mortgagee,  that would result in Mortgagee  utilizing the $350,000 hold back
from proceeds of the Loan, as set forth in that certain letter between Mortgagor
and Mortgagee executed the date hereof.

         2.02 Acceleration of Maturity. If default be made in the payment of the
principal sum or any installment  thereof or any interest thereon as provided in
the Note or if an Event of Default as defined  herein  occurs,  then, in any and
all such events,  the entire principal amount of the Note with all interest then
accrued thereon shall, at the option of Mortgagee and without notice  (Mortgagor
hereby  expressly  waives  notice of any such  default),  become  and be due and
payable.

         2.03 Mortgagee's Right to Enter and Take Possession,  Operate and Apply
              Income.

                  (a) If an Event of  Default  shall have  occurred,  Mortgagor,
upon demand of  Mortgagee,  shall  forthwith  surrender to Mortgagee  the actual
possession and, if and to the extent permitted by law,  Mortgagee  itself, or by
such officers or agents as it may appoint,  may enter and take possession of all
of the  Mortgaged  Property,  and  may  exclude  Mortgagor  and its  agents  and
employees  wholly  therefrom,  and may have joint  access with  Mortgagor to the
books, papers and accounts of Mortgagor.

                  (b) If  Mortgagor  shall for any reason fail to  surrender  or
deliver the  Mortgaged  Property or any part thereof after  Mortgagee's  demand,
Mortgagee  may obtain a judgment or decree  conferring on Mortgagee the right to
immediate  possession or requiring Mortgagor to deliver immediate  possession of
all or part of the  Mortgaged  Property  to  Mortgagee,  to the  entry  of which
judgment or decree Mortgagor hereby specifically  consents.  Mortgagor shall pay
to Mortgagee,  upon demand, all costs and expenses of obtaining such judgment or
decree and reasonable  compensation to Mortgagee,  its attorneys and agents, and
all such costs,  expenses and compensation shall, until paid, accrue interest at
the maximum rate permissible  under applicable law and be secured by the lien of
this Mortgage.

                  (c) Upon every  such  entering  upon or taking of  possession,
Mortgagee may, without limitation, hold, store, use, operate, manage and control
the Mortgaged Property and conduct the business thereof and, from time to time:

                           (i)      make all necessary  and proper  maintenance,
                                    repairs, renewals, replacements,  additions,
                                    betterments  and  improvements  thereto  and
                                    thereon and  purchase or  otherwise  acquire
                                    additional  fixtures,  personalty  and other
                                    property;


                                       17
<PAGE>

                           (ii)     insure  or  keep  the   Mortgaged   Property
                                    insured;

                           (iii)    manage and  operate the  Mortgaged  Property
                                    and  exercise  all the  rights and powers of
                                    Mortgagor  in its  name or  otherwise,  with
                                    respect to the same;

                           (iv)     enter  into   agreements   with   others  to
                                    exercise   the   powers    herein    granted
                                    Mortgagee; and

                           (v)      receive  reasonable   compensation  for  its
                                    service and  reimbursement  of its  expenses
                                    necessarily incurred;

all as Mortgagee from time to time may determine;  and, in connection therewith,
Mortgagor shall  indemnify,  defend and hold Mortgagee  harmless of and from any
and all claims, expenses, demands and/or liability arising therefrom.  Mortgagee
may collect and receive all the income,  revenues,  rents, issues and profits of
the same,  including  those past due as well as those accruing  thereafter;  and
shall apply the monies so received by  Mortgagee  in such  priority as Mortgagee
may  determine  to (1) the payment of accrued  interest on the Note,  (2) to the
payment of overdue  installments  of  principal,  (3) the deposits for taxes and
assessments  due, (4) fees,  charges,  expenses and interest paid and/or accrued
hereunder,  (5) to the cost of insurance,  taxes,  assessments  and other proper
charges upon the Mortgaged  Property or any part thereof  including  repairs and
maintenance thereof, and (6) reasonable compensation, expenses and disbursements
of Mortgagee, its agents, attorneys and other representatives.

         2.04 Appointment of Receiver.  In addition to Mortgagee's right to take
possession  of and operate the Property,  as set forth above,  either in lieu of
Mortgagee  taking the above set forth actions,  or before taking such action and
not in lieu of Mortgagee  ultimately taking such actions, or after Mortgagee has
already  proceeded  under the terms and  provisions  of  Paragraph  2.03 hereof,
Mortgagee shall be entitled to the appointment of a receiver, in accordance with
the following terms and provisions:

                  (a)  If at  any  time,  in  the  discretion  of  Mortgagee,  a
receivership may be necessary to protect the Mortgaged  Property or the security
of  Mortgagee,  whether  before  or after  maturity  of the  Note and any  other
indebtedness  secured  by  this  Mortgage,  or  at  the  time  of or  after  the
institution  of suit to collect the Note and any other  indebtedness  secured by
this Mortgage or to enforce and/or foreclose this Mortgage,  Mortgagee shall, as
a matter of strict  right and  regardless  of the value of the  security for the
amounts due  hereunder  or secured  hereby or of the solvency of any party bound
for the payment of the Note and any other indebtedness  secured hereunder,  have
the right to the  appointment,  on ex parte  application  and without  notice to
Mortgagor,  by any court having  jurisdiction,  of a receiver to take charge of,
manage,  preserve,  protect  and  operate  the  Property  and  any  business  or
businesses located thereon, to collect the rents, issues, proceeds,  profits and
income  thereon,  to make all  necessary  and needed  repairs,  to complete  the
construction  of any  improvements  which has been undertaken but not completed,
and to pay  all  taxes  and  assessments  against  the  Mortgaged  Property  and


                                       18
<PAGE>

insurance  premiums for insurance  thereon and after the payment of the expenses
of  the  receivership,  including  reasonable  attorney's  fees  to  Mortgagee's
attorney,  and after compensation for management of the Mortgaged  Property,  to
apply the net  proceeds in reduction of all  indebtedness  hereby  secured or in
such manner as the court shall direct. All such expenses shall be secured by the
lien of this Mortgage until paid. Mortgagor hereby specifically waives the right
to object to the  appointment of a receiver and hereby  expressly  consents that
such appointment shall be made as an admitted equity and as a matter of absolute
right of Mortgagee.

                  (b) The receiver or its agents shall be entitled to enter upon
and take possession of any and all of the Mortgaged Property,  together with any
and all businesses  conducted  thereon and all business assets used therewith or
thereon,  or any part or parts thereof,  and to operate and conduct the business
or businesses, or complete construction of improvements,  to the same extent and
in the same manner as Mortgagor  might lawfully do. The receiver,  personally or
through its agents or attorneys,  may exclude  Mortgagor  and its  subsidiaries,
agents,  servants and employees  wholly from the Mortgaged  Property,  and have,
hold, use, operate, manage and control the same and each and every part thereof,
and in the name of Mortgagor, its subsidiaries, or agents, exercise all of their
rights  and  powers  and use all of the  then  existing  items of  security  and
collateral,  materials,  current supplies, stores and assets and, at the expense
of  Mortgagor,  maintain,  restore,  complete  construction  of, insure and keep
insured, the properties,  equipment,  and apparatus provided or required for use
in connection with such business or businesses,  and make all such necessary and
proper  repairs,  renewals  and  replacements  and all such useful  alterations,
additions, betterments and improvements as the receiver may deem judicious.

                  (c) Such  receivership  shall,  at the  option  of  Mortgagee,
continue  until full payment of the Note and all other sums hereby  secured,  or
until title to the  Property  shall have passed by  foreclosure  sale under this
Mortgage.

         2.05  Mortgagee's  Power of  Enforcement.  If an Event of Default shall
have occurred,  Mortgagee may, either with or without entry or taking possession
as  hereinabove  provided  or  otherwise,  proceed by suit or suits at law or in
equity or by any other appropriate  proceeding or remedy: (a) to enforce payment
of the Note or the  performance  of any term hereof or any other  right;  (b) to
foreclose  this  Mortgage;  and (c) to pursue  any other  remedy,  legal  and/or
equitable, available to it herein granted and/or under applicable law.

         2.06 Suits to Protect the Mortgaged Property.  Mortgagee shall have the
power and authority, but not the obligation, to institute and maintain any suits
and proceedings as Mortgagee may deem advisable (a) to prevent any impairment of
the  Mortgaged  Property by any acts which may be unlawful or any  violation  of
this  Mortgage,  (b) to  preserve  or  protect  its  interest  in the  Mortgaged
Property,  and  (c) to  restrain  the  enforcement  of or  compliance  with  any
legislation  or  other  governmental  enactment,  rule  or  order  that  may  be
unconstitutional  or otherwise invalid, if the enforcement of or compliance with
such  enactment,  rule or  order  might  impair  the  security  hereunder  or be
prejudicial to Mortgagee's  interest.  Mortgagor shall cooperate with respect to
any action taken by Mortgagee as set forth above.

         2.07     Foreclosure.


                                       19
<PAGE>

                  (a)  Mortgagee may  institute  proceedings  for the partial or
complete  foreclosure of this Mortgage and Mortgagee may,  pursuant to any final
judgment  of  foreclosure,  sell the  Mortgaged  Property  as an  entirety or in
separate lots, units, or parcels.

                  (b) In case of a  foreclosure  sale of all or any  part of the
Mortgaged  Property,  the proceeds of sale shall be applied in  accordance  with
Section  2.13  hereof,  and  Mortgagee  shall be entitled  to seek a  deficiency
judgment against Mortgagor to enforce payment of any and all obligations secured
hereby then  remaining due and unpaid,  together with interest  thereon,  and to
recover a judgment against Mortgagor therefor.

                  (c) Mortgagee is authorized to foreclose this Mortgage subject
to the rights of any tenants of the Mortgaged  Property,  or Mortgagee may elect
which tenants Mortgagee desires to name as parties defendant in such foreclosure
and failure to make any such tenants parties  defendant to any such  foreclosure
proceedings  and to  foreclose  their  rights  will not be, nor be  asserted  by
Mortgagor to be, a defense to any proceedings instituted by Mortgagee to collect
the unpaid  obligations  secured hereby or to collect any  deficiency  remaining
unpaid after the foreclosure sale of the Mortgaged Property.

         2.08 Credit of Mortgagee.  Upon any  foreclosure  of all or any part of
the  Mortgaged  Property,  Mortgagee  may  bid  for and  acquire  the  Mortgaged
Property, or any part thereof and, in lieu of paying cash therefor, may apply to
the  purchase  price any  portion  of or all of the unpaid  obligations  secured
hereby, in such order as Mortgagee may elect.

         2.09 Sale.  Any sale or sales  made under or by virtue of this  Article
shall operate to divest all the estate, right, title, interest, claim and demand
whatsoever  at law or in equity,  of Mortgagor and all persons,  except  tenants
pursuant  to  leases  approved  by  Mortgagee,  claiming  by,  through  or under
Mortgagor in and to the properties and rights so sold, whether sold to Mortgagee
or to others.

         2.10  Proofs of  Claim.  In the case of any  receivership,  insolvency,
bankruptcy,  reorganization,   arrangement,  adjustment,  composition  or  other
judicial proceedings  affecting Mortgagor,  any endorser,  co-maker,  surety, or
guarantor  of  the  obligations  secured  hereby,  or any  of  their  respective
properties, Mortgagee, to the extent permitted by law, shall be entitled to file
such proofs of claim and other  documents  as may be  necessary  or advisable in
order to have its  claim  allowed  in such  proceedings  for the  entire  unpaid
obligations  at the date of the  institution  of such  proceedings,  and for any
additional amounts which may become due and payable after such date.

         2.11 Waiver of Redemption,  Notice and  Marshalling.  Mortgagor  hereby
waives and releases, for itself and anyone claiming through, by, or under it, to
the maximum extent permitted by the laws of the State of Florida:

                  (a) all benefit  that might  accrue to  Mortgagor by virtue of
any present or future law exempting the Mortgaged  Property,  or any part of the
proceeds  arising  from  any  sale  thereof,  from  attachment,  levy or sale on
execution,  or providing  for any  appraisement,  valuation,  stay of execution,
exemption from civil process, redemption or extension of time for payment;


                                       20
<PAGE>

                  (b) all notices of default,  or Mortgagee's actual exercise of
any option or remedy under any loan documents, or otherwise; and

                  (c) any right to have the Mortgaged Property marshalled.

         2.12 Automatic Stay.  Mortgagor hereby agrees that, in consideration of
the  recitals  and mutual  covenants  contained  herein,  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,   Mortgagor  does  agree  that  in  the  event  Mortgagor  or  (if
applicable) any partner of Mortgagor shall (a) 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;  (b) be the subject of any order for relief issued under
such Title 11 of the U.S.  Code,  as amended;  (c) 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; (d) have sought or consented to or acquiesced in the appointment of any
trustee,  receiver,  conservator,  or  liquidator;  or (e) 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,  then and in any of such events
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 Note, this Mortgage,  and all associated loan documents,  and
as otherwise provided by law. Mortgagor hereby agrees not to object to Mortgagee
immediately  seeking  relief from the  automatic  stay,  to allow  Mortgagee  to
proceed  immediately to obtain a final judgment of foreclosure of this Mortgage,
to complete a  foreclosure  sale and/or to proceed  against and realize upon the
collateral for the indebtedness  secured hereby and to otherwise allow Mortgagee
to take all such  actions  as  Mortgagee  may  elect in its sole  discretion  in
pursuance of the other  rights and remedies  available in the event of a default
by Mortgagor under this Mortgage and all associated  loan  documents.  Mortgagor
hereby waives any protection afforded under 11 U.S.C., Section 362(a).

         2.13  Application  of Proceeds.  The proceeds of any sale of all or any
portion of the Mortgaged  Property shall be applied by Mortgagee  first,  to the
payment of receiver's fees and expenses, if any, and to the payment of all costs
and expenses  (including,  without  limitation,  reasonable  attorneys  fees and
expenses)  incurred by Mortgagee,  together with interest thereon at the maximum
rate permitted  under  applicable  law from the date so incurred,  in connection
with any entry,  action or proceeding  under this Article and,  second,  in such
order as Mortgagee may elect, to the payment of the  obligations  secured hereby
until all of said obligations have been paid in full.

         2.14 Delay or Omission No Waiver.  No delay or omission of Mortgagee or
of any holder of the Note to exercise any right,  power or remedy  accruing upon
any Event of Default shall exhaust or impair any such right,  power or remedy or
shall  be  construed  to waive  any  such  Event  of  Default  or to  constitute
acquiescence  therein.  Every right,  power and remedy given to Mortgagee may be
exercised  from  time  to  time  and as  often  as may be  deemed  expedient  by
Mortgagee.


                                       21
<PAGE>

         2.15 No Waiver of One Default to Affect Another. No waiver of any Event
of Default hereunder shall extend to or affect any subsequent or any other Event
of Default then existing,  or impair any rights,  powers or remedies  consequent
thereon.  If Mortgagee  (a) grants  forbearance  or an extension of time for the
payment of any sums secured hereby;  (b) takes other or additional  security for
the payment  thereof;  (c) waives or does not exercise any right  granted in the
Note, this Mortgage or any other instrument  securing the Note; (d) releases any
part of the  Mortgaged  Property  from the lien of this  Mortgage  or any  other
instrument securing the Note; or (e) makes or consents to any agreement changing
the terms of this Mortgage or  subordinating  the lien or any charge hereof,  no
such act or omission  shall  release,  discharge,  modify,  change or affect the
original  liability under the Note, this Mortgage or otherwise of Mortgagor,  or
any  subsequent  purchaser of the Mortgaged  Property or any part thereof or any
maker, cosigner,  endorser,  surety or guarantor.  No such act or omission shall
preclude  Mortgagee from exercising any right, power or privilege herein granted
or  intended  to be  granted  in case of any  Event of  Default  nor,  except as
otherwise  expressly  provided  in an  instrument  or  instruments  executed  by
Mortgagee, shall the lien of this Mortgage be altered thereby.

         2.16 Sale, Transfer or Lease of Mortgaged  Property.  Without the prior
written  consent of Mortgagee,  which consent shall be in  Mortgagee's  sole and
absolute  discretion,  Mortgagor  will abstain from and will not cause or permit
any sale,  exchange,  transfer or  conveyance,  directly or  indirectly,  of the
Mortgaged  Property or any part thereof or any interest therein,  voluntarily or
by operation of law (other than  foreclosure  under this  Mortgage),  whether by
sale, exchange, conveyance, merger, consolidation,  reorganization or otherwise.
Furthermore,  there  shall  be no  change  in the  operation  or  management  of
Mortgagor  or the  Mortgaged  Property  without  the prior  written  consent  of
Mortgagee,  which consent shall not be unreasonably  withheld.  Any violation of
the foregoing limitations,  at the option of Mortgagee, shall be deemed an Event
of Default hereunder.

         In the event of a permitted  sale,  or transfer by operation of law, or
otherwise, of all or any part of the Mortgaged Property by Mortgagor, including,
without limitation,  any conveyances which may be permitted above,  Mortgagee is
hereby authorized and empowered to deal with any such transferee or successor in
interest with reference to the Mortgaged  Property or the  indebtedness  secured
hereby, or with reference to any of the terms or conditions hereof, as fully and
to the same extent as it might deal with the original parties hereto and without
in any way  releasing or  discharging  any of the  liabilities  or  undertakings
hereunder.  Furthermore,  any  permitted  sale or transfer  may be  conditioned,
without  limitation,  upon the payment of a transfer fee or a change in the loan
charges, interest rates and payment or repayment terms.

         2.17 Further Encumbrances.  No additional mortgage or encumbrance shall
be placed  upon the  Mortgaged  Property  without the prior  written  consent of
Mortgagee,  which consent shall be in Mortgagee's sole and absolute  discretion.
Additionally,  in the event a Notice  Limiting Future Advances is filed limiting
the right of Mortgagee to effectuate  future  advances under this Mortgage,  the
filing of such notice shall be and constitute a default under this Mortgage.

         2.18 Remedies  Cumulative.  No right, power or remedy conferred upon or
reserved  to  Mortgagee  by the Note,  this  Mortgage  or any  other  instrument
securing the Note is exclusive of any other right, power or remedy, but each and
every such right,  power and remedy shall be cumulative and concurrent and shall
be in addition to any other right, power and remedy given hereunder or under the
Note or any other instrument  securing the Note, or now or hereafter existing at
law, in equity or by statute.


                                       22
<PAGE>

                                  ARTICLE THREE
                            MISCELLANEOUS PROVISIONS

         3.01 Heirs, Successors,  and Assigns Included in Parties.  Whenever one
of the  parties  hereto is named or  referred  to herein,  the  heirs,  personal
representatives,  successors and assigns of such party shall be included and all
covenants  and  agreements  contained  in  this  Mortgage,  by or on  behalf  of
Mortgagor or Mortgagee,  shall bind and inure to the benefit of their respective
heirs, personal representatives, successors and assigns, whether so expressed or
not.

         3.02     Addresses for Notices.

                  (a) Any notice,  report, demand or other instrument authorized
or required to be given or  furnished  under this  Mortgage to  Mortgagor  or to
Mortgagee  shall be  deemed  given or  furnished  when  addressed  to the  party
intended  to receive the same,  to both of the  following  addresses,  or at the
address of the Mortgaged  Property in the case of notice to the  Mortgagor,  and
delivered to such address or deposited in the United  States mail as first class
certified mail, return receipt requested,  postage paid, whether or not the same
is actually received by such party.

Tarragon South Development Corp.              Tarragon Corporation
200 East Las Olas Blvd., Suite 1660           1775 Broadway, 23rd Floor
Fort Lauderdale, FL  33301                    New York, NY  10019
Attn:   O.H. Fagerli, Jr., CFO, and           Attn:  Todd Minor, CFO
Attn:   Marcy H. Kammerman, Esq.

                  (b) Each  party  may  change  the  address  to which  any such
notice,  report,  demand or other  instrument  is to be delivered or mailed,  by
furnishing  written notice of such change to the other party, but no such notice
of change shall be effective unless and until received by such other party.

                  (c)  Notwithstanding   anything  in  this  instrument  to  the
contrary,  all requirements of notice shall be deemed  inapplicable if Mortgagee
is prevented from giving such notice by bankruptcy or any other  applicable law.
In such event,  the cure period,  if any,  shall then run from the occurrence of
the event or condition of default rather than from the date of notice.

         3.03 Headings. The headings of the articles,  sections,  paragraphs and
subdivisions  of this Mortgage are for convenience or reference only, are not to
be considered a part hereof,  and shall not limit or expand or otherwise  affect
any of the terms hereof.

         3.04 Invalid  Provisions to Affect No Others.  In the event that any of
the  covenants,  agreements,  terms or  provisions  contained in the Note,  this
Mortgage or any other instrument securing the Note shall be invalid,  illegal or
unenforceable  in  any  respect,   the  validity  of  the  remaining  covenants,
agreements,  terms or provisions  contained herein and in the Note and any other
instrument  securing  the  Note  shall  be in no  way  affected,  prejudiced  or
disturbed thereby.


                                       23
<PAGE>

         3.05 Changes. Neither this Mortgage nor any term hereof may be changed,
waived,  discharged or terminated orally, or by any action or inaction, but only
by an  instrument  in  writing  signed  by  the  party  against  which  or  whom
enforcement  of the change,  waiver,  discharge or  termination  is sought.  Any
agreement  hereafter  made by Mortgagor and Mortgagee  relating to this Mortgage
shall be  superior  to the  rights  of the  holder  of any  intervening  lien or
encumbrance.

         3.06 Governing Law. This Mortgage is to be governed by and construed in
accordance with applicable law and Mortgagor  agrees that the sole and exclusive
forum  for  the  determination  of  any  action  relating  to the  validity  and
enforceability  of this  Mortgage  shall be either an  appropriate  court of the
State of Florida or that court of the United  States which  includes  within its
territorial jurisdiction the State of Florida.

         3.07 Usury.  It is the  intention of the parties  hereto to comply with
the usury laws of applicable  governmental  authority(ies);  accordingly,  it is
agreed that,  notwithstanding  any  provision to the contrary in the Note,  this
Mortgage,  or any of the other documents  securing  payment thereof or otherwise
relating  hereto,  no such  provision  shall  require  the payment or permit the
collection of interest in excess of the maximum permitted by law. In determining
the maximum rate allowed,  Mortgagee may take  advantage of any state or federal
law, rule or regulation in effect from time to time which may govern the maximum
rate of interest which may be charged. If any excess of interest in such respect
is provided  for, or shall be  adjudicated  to be so provided  for, in the Note,
this Mortgage,  or in any of the other  documents  securing  payment  thereof or
otherwise  relating  hereto,  then in such  event:  (a) the  provisions  of this
paragraph  shall  govern  and  control;  (b)  neither  Mortgagor  nor its heirs,
personal  representatives,  successors  or assigns or any other party liable for
the payment  thereof,  shall be obligated to pay the amount of such  interest to
the extent that it is in excess of the maximum amount  permitted by law; (c) any
such excess which may have been  collected  shall be either  applied as a credit
against the then unpaid  principal  amount of the Note or refunded to Mortgagor;
and (d) the effective  rate of interest  shall be  automatically  reduced to the
maximum lawful contract rate allowed under the applicable usury laws.

         3.08 Required Notices. In addition to any notice requirements contained
elsewhere in this Mortgage,  Mortgagor  shall notify  Mortgagee  promptly of the
occurrence of any of the following:

                  (a) a fire or other casualty causing damage to  the  Mortgaged
Property or any portion thereof;

                  (b)  receipt  of  notice  of  condemnation  of  the  Mortgaged
Property or any portion thereof;

                  (c)    receipt   of   notice    from   any    government    or
quasi-governmental  authority  relating to the  development,  structure,  use or
occupancy of the Mortgaged Property or any portion thereof; or

                  (d)  commencement  of any  litigation  affecting the Mortgaged
Property or any portion thereof.


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<PAGE>

         3.09 Protective Advances.  It is the intent hereof to secure payment of
the indebtedness  represented by the Note,  whether the entire amount shall have
been advanced to the Mortgagor as of the date hereof or at a later date,  and to
secure  any  other  amount  or  amounts  that  may  be  added  to  the  mortgage
indebtedness  under the terms of this  instrument  for  protective  advances  or
otherwise. Nothing herein contained shall be deemed an obligation on the part of
Mortgagee to make any future advances.

         3.10 Modification or Waiver. Any indulgence or departure at any time by
Mortgagee,  its successors or assigns from any of the provisions  hereof,  or of
any  obligation  hereby  secured,  shall  not  modify  the same or waive  future
compliance  therewith  by  Mortgagor.  No  act  of  omission  or  commission  of
Mortgagee,  including,  without  limitation,  any failure to exercise any right,
remedy or recourse,  shall be deemed to be a waiver,  release or modification of
the same,  such waiver,  release or  modification  to be effected only through a
written document executed by Mortgagee and then only to the extent  specifically
recited therein.

         3.11 Mortgagor's Duty to Defend. Mortgagor will defend, at its own cost
and expense, and indemnify, defend and hold Mortgagee harmless from, any action,
proceeding or claim affecting the Mortgaged Property,  the indebtedness  secured
hereunder or any associated  loan document.  Costs and expenses will include all
reasonable attorneys' fees to and through all trial, appellate, supplemental and
bankruptcy proceedings. If Mortgagor neglects or refuses to act pursuant to this
paragraph,  Mortgagee,  at its option  (whether  electing  to declare the entire
indebtedness  secured hereby due and payable or not, or to pursue other remedies
for an Event of Default) may pay for all reasonable  attorneys'  fees, costs and
expenses  incurred in any such action(s).  All such payments,  bearing  interest
thereon  from the time of  payment  at the  maximum  contract  rate of  interest
permitted by law, shall be deemed a part of the indebtedness  secured  hereunder
and shall be immediately due and payable by Mortgagor to Mortgagee.

         3.12 Mortgagee's  Rights At Any Time, With or Without Consent.  Without
affecting  the  liability of  Mortgagor  or any other person  (except any person
expressly  released in writing) for payment of any indebtedness  secured hereby,
or for performance of any obligation contained herein, and without affecting the
rights of  Mortgagee  with respect to any  security  not  expressly  released in
writing,  Mortgagee  may,  at any time and from time to time,  either  before or
after the maturity of the Note, and without  notice or consent:  (a) release any
person liable for payment of all or any part of the secured  indebtedness or for
performance  of any  obligation;  (b) make any  agreement  extending the time of
payment of all or any part of the indebtedness  secured hereunder,  or modifying
or waiving any obligation, or subordinating, modifying or otherwise dealing with
the lien or charge hereof;  (c) exercise or refrain from exercising or waive any
right  Mortgagee may have;  (d) accept  additional  security of any kind; or (e)
release,  or otherwise  deal with any property,  real or personal,  securing the
indebtedness, including all or any part of the Mortgaged Property.

         3.13 Americans With  Disabilities Act.  Mortgagor  covenants and agrees
that, during the term of the loan evidenced by the Note, the Mortgaged  Property
is and will be in full  compliance  with the  Americans  with  Disabilities  Act
("ADA") of November 26, 1990, 42 U.S.C.  Section 12191, et seq., as amended from
time to time, and the  regulations  promulgated  pursuant  thereto and any other
laws or legal  requirements  regarding  access and facilities for handicapped or
disabled  persons.  Mortgagor shall be solely  responsible for all ADA and other
related compliance costs,  including,  without  limitation,  attorneys' fees and
litigation costs, which  responsibility  shall survive the repayment of the loan
evidenced by the Note and foreclosure of the Mortgaged Property.


                                       25
<PAGE>

         3.14  Compliance  with Law.  Mortgagor  warrants  and  represents  that
Mortgagor has complied,  and shall hereafter comply, with all valid laws, rules,
ordinances and regulations of the Federal,  state and local government,  and all
agencies and subdivisions thereof which laws, rules,  ordinances and regulations
apply  or  relate  to the  Mortgaged  Property  and  the  use,  development  and
construction thereof and of improvements  existing or contemplated thereon or as
a part thereof,  or the  improvements  now or hereafter  located thereon or on a
part thereof.

         3.15 Late Charges.  The Note provides that the Note holder may charge a
late payment  equal to five percent (5%) of any payment not received  within ten
(10) days after its due date and, therefore, all such late payment charges shall
also be secured by this Mortgage.

         3.16 Time of the  Essence.  Mortgagor  agrees that where,  by the terms
hereof or of the Note, a day is named or a time fixed for the payment of any sum
of money or the performance of any agreement, that time is of the essence.

         3.17 Attorney's  Fees. As used in this Mortgage and all associated loan
documents,  attorney's fees shall include,  but not be limited to, fees incurred
in all matters of collection and enforcement,  construction and  interpretation,
before,  during and after  suit,  trial,  proceedings  and  appeals,  as well as
appearances  in  and  connected  with  appellate,   supplemental  or  bankruptcy
proceedings, or creditors' reorganization or arrangement proceedings.

         3.18 Venue. Mortgagor agrees that Broward County,  Florida, at the sole
option of  Mortgagee,  is the  proper  venue  for any and all legal  proceedings
arising out of this Mortgage, the Note and any associated loan documents.

         3.19 Indemnification. In no event shall Mortgagee's rights hereunder or
under any associated loan documents grant Mortgagee the right to or be deemed to
indicate that Mortgagee is in control of the business,  management or properties
of  Mortgagor,  or has power over the daily  management  functions and operating
decisions  made by  Mortgagor.  Mortgagee  is a  lender  only and  shall  not be
considered a shareholder,  joint venturer or partner of Mortgagor. Mortgagor and
Mortgagee intend that the relationship created under the Note, this Mortgage and
all other  associated  loan  documents  be solely  that of debtor and  creditor,
mortgagor  and  mortgagee  or borrower and lender,  as the case may be.  Nothing
herein or in any of the associated  loan documents is intended to create a joint
venture,  partnership,  tenancy in common or joint tenancy  relationship between
Mortgagor  and  Mortgagee  nor grant to Mortgagee  any interest in the Mortgaged
Property  other than that of creditor or  mortgagee,  it being the intent of the
parties hereto that Mortgagee shall have no liability  whatsoever for any losses
generated  by or  incurred  with  respect to the  Mortgaged  Property  nor shall
Mortgagee  have any control over the day to day  management  or operation of the
Mortgaged Property. The terms and provisions of this Paragraph shall control and
supersede over every other provision and all other agreements  between Mortgagor
and Mortgagee.  Mortgagor hereby agrees to indemnify,  defend and hold Mortgagee
harmless  and defend  Mortgagee  against  any loss,  liability,  cost or expense
(including,  without limitation,  reasonable  attorneys' fees and disbursements)
and all claims,  actions,  procedures  and suits arising out of or in connection


                                       26
<PAGE>

with any  construction of the relationship of Mortgagor and Mortgagee as to that
of  joint  venturers,   partners,  tenants  in  common,  joint  tenants  or  any
relationship other than that of debtor and creditor or any assertion that such a
construction should be made. The foregoing indemnity shall survive the repayment
of the Note and the satisfaction of this Mortgage and shall continue for so long
as any liability for which the indemnity is given may exist or arise.

         3.20 Mortgage and/or Intangible Tax.  Mortgagor shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the Mortgagee
from and  against  any and all losses  imposed  upon or  incurred by or asserted
against  Mortgagee  and  directly  or  indirectly  arising  out of or in any way
relating to any tax on the making  and/or  recording of this  Mortgage or any of
the other loan documents.

         3.21 Future  Advances;  Protection  of Property.  This  Mortgage  shall
secure any  additional  loans as well as any and all present or future  advances
and readvances under any indebtedness made by Mortgagee to or for the benefit of
Mortgagor  or the  Mortgaged  Property  within  twenty  (20) years from the date
hereof  (whether  such  advances  are  obligatory  or are made at the  option of
Mortgagee or  otherwise),  arising  from the  following  circumstances:  (i) all
advances made or costs  incurred by Mortgagee  pursuant to the terms of the Loan
Documents  for  the  payment  of  real  estate  taxes,   assessments   or  other
governmental  charges,   maintenance  charges,  insurance  premiums,   appraisal
charges, environmental inspection, audit, testing or compliance costs, and costs
incurred by  Mortgagee  for the  enforcement  and  protection  of the  Mortgaged
Property  or the lien of this  Mortgage;  and (ii) all  reasonable  legal  fees,
costs,  and other  expenses  incurred by  Mortgagee  by reason of any default or
otherwise  in  connection  with  such  indebtedness.  The  total  amount of such
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  secured at
any one time shall not exceed twice the amount of the Note.

                  Mortgagor  agrees that if, at any time during the term of this
Mortgage or following a foreclosure hereof (whether before or after the entry of
a judgment of foreclosure), Mortgagor fails to perform or observe any payment or
performance  covenant or obligation  under this Mortgage  beyond any  applicable
grace  period,  if any,  Mortgagee may (but shall not be obligated to) take such
steps  as  are  reasonably  necessary  to  remedy  any  such  nonperformance  or
nonobservance  and provide payment  thereof.  All amounts  advanced by Mortgagee
shall be  added to the  amount  secured  by this  Mortgage  and the  other  Loan
Documents  (and, if advanced  after the entry of a judgment of  foreclosure,  by
such  judgment of  foreclosure),  and shall be due and  payable  within five (5)
business days of written demand,  together with interest at the Default Rate set
forth in the Note,  such interest to be calculated from the date of such advance
to the date of repayment thereof

         WAIVER  OF TRIAL BY JURY.  MORTGAGOR  AND  MORTGAGEE  HEREBY  MUTUALLY,
KNOWINGLY,  WILLINGLY,  INTENTIONALLY AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL
BY JURY AND NO PARTY NOR ANY ASSIGNEE,  SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE
OF THE  PARTIES  (ALL OF WHOM ARE  HEREINAFTER  COLLECTIVELY  REFERRED TO AS THE
"PARTIES") SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,  PROCEEDING,  COUNTERCLAIM OR
ANY OTHER  LITIGATION  PROCEEDING  BASED UPON OR ARISING OUT OF THIS MORTGAGE OR
ANY ASSOCIATED LOAN DOCUMENTS OR ANY INSTRUMENT EVIDENCING, SECURING OR RELATING
TO THE INDEBTEDNESS OR OTHER OBLIGATIONS SECURED HEREBY OR ANY RELATED AGREEMENT
OR INSTRUMENT,  ANY OTHER COLLATERAL FOR THE INDEBTEDNESS  SECURED HEREBY OR ANY
COURSE OF ACTION,  COURSE OF DEALING,  STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS  RELATING TO THE LOAN  EVIDENCED  BY THE NOTE OR TO THIS  MORTGAGE.  THE
PARTIES ALSO WAIVE ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS


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<PAGE>

BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS  PARAGRAPH  HAVE BEEN FULLY  NEGOTIATED  BY THE PARTIES.  THE
WAIVER  CONTAINED  HEREIN IS  IRREVOCABLE,  CONSTITUTES  A KNOWING AND VOLUNTARY
WAIVER,  AND SHALL BE SUBJECT TO NO  EXCEPTIONS.  MORTGAGEE HAS IN NO WAY AGREED
WITH OR  REPRESENTED TO MORTGAGOR OR ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

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

Signed, sealed and delivered
in the presence of:                         AGU ENTERTAINMENT CORP., a Delaware
                                            corporation
____________________________________
Print name: ________________________        By:_________________________________
                                                David C. Levy
____________________________________            Chief Executive Officer
Print name: ________________________
                                            (Corporate Seal)

STATE OF FLORIDA
COUNTY OF PALM BEACH

         The  foregoing  instrument  was  acknowledged  before  me  this  day of
August_________________,  2005, by David C. Levy, as Chief Executive Officer of,
and on behalf of,  AGU  ENTERTAINMENT  CORP.,  a  Delaware  corporation,  who is
personally known to me or produced his driver's license as identification.

                                            ____________________________________
                                            NOTARY PUBLIC-State of Florida
                                            Print/Type/Stamp Name:
                                            Commission Expiration Date:
                                            Notary Seal:


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<PAGE>

                                   EXHIBIT "A"
                                Legal Description