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                                                                    Exhibit 4.10

                               SECURITY AGREEMENT
                                  (Hotel/Motel)

     THIS SECURITY AGREEMENT ("Security Agreement") is made as of March 29,
2002, by AHM RES I LIMITED PARTNERSHIP, a Virginia limited partnership
("Lessee"), having its principal place of business at 10 South Third Street,
Richmond, Virginia 23219 to LASALLE BANK NATIONAL ASSOCIATION AS INDENTURE
TRUSTEE FOR THE BENEFIT OF THE HOLDERS OF ISTAR ASSET RECEIVABLES TRUST
COLLATERALIZED MORTGAGE BONDS SERIES 2000-1 ("Lender"), having an address at c/o
iStar Asset Services, Inc., 100 Great Meadow Road, Suite 603, Wethersfield,
Connecticut 06109.

                                    RECITALS

     A. By assignment, Lender is the owner and holder of a loan in the original
principal amount of Thirty Million and No/100 Dollars ($30,000,000.00)
(collectively, the "Loan") to MARRIOTT RESIDENCE INN LIMITED PARTNERSHIP, a
Delaware limited partnership ("Borrower") and the owner and holder of the
instruments and documents (collectively, the "Loan Documents") evidencing,
securing or otherwise relating to the Loan including, without limitation, (i) a
promissory note, from Borrower to Original Lender, in the aggregate original
principal amount of $30,000,000.00 made payable by Borrower to Original Lender
(the "Promissory Notes"), (ii) that certain Loan Agreement dated October 10,
1995 by and between Borrower and Starwood Mezzanine Investors, L.P. ("Original
Lender") (as so modified and amended, the "Loan Agreement"), and (iii) fifteen
separate security instruments from the Borrower to the Original Lender, dated as
of October 10, 1995, (the "Mortgages"), granting to Original Lender a lien on,
among other things, the Mortgaged Property (as defined below).

     B. iStar Asset Services, Inc. services the loan for Lender, as Primary
Servicer pursuant to a certain Primary Servicing Agreement dated as of May 17,
2000.

     C. Borrower, RIBM One LLC ("RIBM"), Apple Hospitality Two, Inc. ("AHT") and
AHT Res Acquisition, L.P. ("Merger Sub") have entered into an Agreement and Plan
of Merger dated November 28, 2001 pursuant to which Merger Sub has merged with
and into Borrower (with Borrower being the surviving entity), and Borrower has
become a wholly owned indirect subsidiary of AHT (said merger being hereinafter
referred to as the "Merger").

     D. In connection with the Merger, Borrower, among other things, entered
into a master lease agreement (the "Lease Agreement") with AHM Res I Limited
Partnership, a Virginia limited partnership ("Lessee") for each of the Marriott
Residence Inn hotels securing the Loan, which hotels are located on the property
described on Exhibit "A" attached hereto and made a part hereof (the hotels and
such property, collectively, the "Mortgaged Property"), assigned to Lessee all
of Borrower's right, title and interest under the Management Agreement dated
March 28, 1988 between Borrower and Residence Inn by Marriott, Inc. (the
"Management Agreement") and, in connection therewith, Lessee amended and
restated the Management

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Agreement in its entirety pursuant to an Amendment and Restatement of Management
Agreement by and between Lessee and Manager (the "Restated Management
Agreement").

     E. Borrower has requested that Lender consent to, among other things, the
Merger, the Lease Agreement, the assignment of the Management Agreement to
Lessee and the amendment and restatement of the Management Agreement pursuant to
the Restated Management Agreement, and Lender has agreed to consent to such
matters subject to and in accordance with the terms and conditions set forth in
that certain Consent to Merger dated of even date herewith by and among Lender,
Borrower, RIBM and AHT Res I GP, Inc., a Virginia corporation and Lessee,
including, without limitation, the condition that the parties hereto enter into
this Security Agreement.

                                   ARTICLE I
                       DEFINITIONS; RULES OF CONSTRUCTION

     Section 1.1 Defined Terms. As used in this Security Agreement, terms
                 -------------
defined in the Loan Agreement shall have their defined meanings when used
herein, and the following terms shall have the following meanings:

     "Business Day" means a day other than a Saturday, Sunday or other day on
      ------------
which commercial banks are authorized to close under the laws of the state of
New York.

     "Collateral" has the meaning assigned to it in Section 2.1 of this Security
      ----------
Agreement.

     "Inventory" means all inventory and equipment now owned or leased or
      ---------
hereafter acquired or leased by Lessee in connection with the leasehold
ownership, operation and/or maintenance of the Mortgaged Property, including (i)
all goods and other personal property which are held for sale or lease or are
furnished or are to be furnished under a contract of service or which constitute
raw materials, work in process or materials used or consumed or to be used or
consumed in Lessee's business, (ii) all inventory, wherever located, evidenced
by negotiable and non-negotiable documents of title, warehouse receipts and
bills of lading, (iii) all of Lessee's rights in, to and under all purchase
orders now owned or hereafter received or acquired by it for goods or services
and, (iv) all rights of Lessee as an unpaid seller, including rescission,
replevin, reclamation and stopping in transit.

     "Obligations" means (i) the indebtedness evidenced by the Promissory Notes
      -----------1
together with interest thereon and the other "Debt" (as defined in the Loan
Agreement), and (ii) all other obligations or liabilities now or hereafter
payable by Borrower and/or Lessee to Lender pursuant to, under, arising out of
or in connection with this Security Agreement or any other Loan Document.

     "UCC" means at any time the Uniform Commercial Code as the same may from
      ---
time to time be in effect in the state of the location of the Mortgaged
Property, provided that, if, by reason of mandatory provisions of law, the
validity or perfection of any security interest granted herein is governed by
the Uniform Commercial Code as in effect in a jurisdiction other such state
then, as to the validity or perfection of such security interest, "UCC" shall
mean the Uniform Commercial Code in effect in such other jurisdiction.

                                        2

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     Section 1.2 UCC Definitions. The uncapitalized terms "account," "chattel
                 ---------------
paper," "contract right," "document," "warehouse receipt," "bill of lading,"
"document of title," "instrument," "inventory," "equipment," "general
intangible," "money," "proceeds" and "purchase money security interest" as used
in this Security Agreement have the meanings of such terms as defined in the
UCC.

     Section 1.3 Rules of Construction.
                 ---------------------

          (a) Except as otherwise specified herein, all references in this
Security Agreement (i) to any person shall be deemed to include such person's
successors, transferees and assignees, but only, in the case of transferees and
assignees of the parties to this Security Agreement, to the extent the
applicable transfer or assignment complies with the provisions of this Security
Agreement, and (ii) to any applicable law defined or referred to herein shall be
deemed a reference to such applicable law as the same may have been or may be
amended or supplemented from time to time.

          (b) When used in this Security Agreement, the words "herein," "hereof"
and "hereunder" and words of similar import shall refer to this Security
Agreement as a whole and not to any provision of this Security Agreement, and
the words "Section" and "Exhibit" shall refer to Sections of and Exhibits to
this Security Agreement unless otherwise specified.

          (c) Whenever the context so requires, each gender includes the other
gender, and the singular number includes the plural, and vice versa.

                                   ARTICLE II
                               SECURITY INTERESTS

     Section 2.1 Grant of Security Interests. To secure the due and punctual
                 ---------------------------
payment of all Obligations and in order to induce Lender to consent to the
Merger, the lease of the Mortgaged Property by Borrower to Lessee and certain
other matters, Lessee hereby grants to Lender a security interest in all of
Lessee's right, title and interest in, to and under the following, whether now
existing or hereafter acquired (all of which are herein collectively called the
"Collateral"); provided, however, that this Security Agreement, and the security
interest granted by Lessee to Lender hereunder, is subject and subordinate to
the security interest and encumbrances on the Collateral granted to Senior
Lender pursuant to the Senior Loan Documents, in accordance with the
Intercreditor Agreement which governs the rights of such parties with respect to
certain matters:

          (a) Improvements. All buildings, structures, fixtures, additions,
              ------------
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Mortgaged Property, including, but
not limited to, all apparatus, equipment, and appliances used in the operation
or occupancy of the real property described above, it being intended by the
parties that all such items shall be conclusively considered to be a part of the
Mortgaged Property, whether or not attached or affixed to the Mortgaged Property
(the "Improvements"); together with all mineral, oil and gas and other
hydrocarbon substances in, on or under the Mortgaged Property; and

                                        3

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          (b) After Acquired Collateral. All property acquired by Lessee after
              -------------------------
the date of this Security Agreement which by the terms of this Security
Agreement shall be subject to the lien and/or the security interest created
hereby, shall immediately upon the acquisition thereof by Lessee and without any
further mortgage, conveyance or assignment become subject to the lien and
security interest created by this Security Agreement; and

          (c) Leases and Rents. All current and future leases, rental
              ----------------
agreements, occupancy agreements and other agreements of whatever form now or
hereafter affecting the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, all or any part of the Mortgaged Property or the
Improvements, including any guaranties, extensions, renewals, replacements or
modifications thereof, whether before or after the filing by or against Lessee
of any petition for relief under 11 U.S.C. Section 101 et seq. (the "Bankruptcy
Code"), as the same may be amended from time to time (the "Leases") and all
rents, rent equivalents, moneys payable as damages or in lieu of rent or rent
equivalents, royalties (including all oil and gas or other mineral royalties and
bonuses), income, receivables, receipts, revenues, deposits (including security,
utility and other deposits), accounts, cash, issues, fees, profits, charges for
services rendered, and other consideration of whatever form or nature received
by or paid to or for the account of or benefit of Lessee or its agents or
employees from any and all sources (including any warrants, stock options or
other rights granted to Lessee, any principal or their affiliates in connection
with any Lease) arising from or attributable to the Mortgaged Property and the
Improvements, and all right, title and interest of Lessee, its successors and
assigns therein and thereunder, including all guarantees, letters of credit and
any other credit support given by any guarantor in connection therewith, cash or
securities deposited under the Leases to secure the performance by the lessees
of their obligations thereunder and all rents, additional rents, revenues,
issues and profits (including all oil and gas or other mineral royalties and
bonuses) from the Mortgaged Property and the Improvements whether paid or
accruing before or after the filing by or against Lessee of any petition for
relief under the Bankruptcy Code (collectively, the "Rents") and all proceeds
from the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Loan; and

          (d) Non-Personalty Below. All items referred to below in Subsections
              --------------------
(e)(ii) through (e)(ix) of this Section 2.1 which are other than personal
property subject to the provisions of Article 9 of the Uniform Commercial Code;
and

          (e) Personal Collateral. All assets of Lessee now owned or hereafter
              -------------------
acquired related to the leasing, ownership or operation of the Mortgaged
Property or Improvements, including, without limitation, accounts (including,
without limitation, health-care receivables), chattel paper (whether tangible or
electronic) deposit accounts, documents, general intangibles (including, without
limitation, payment intangibles and software), goods (including, without
limitation, inventory, equipment, fixtures and accessions), instruments,
(including, without limitation, promissory notes), investment property,
letter-of-credit rights, letters of credit, money, supporting obligations,
as-extracted collateral, timber to be cut and all proceeds and products of
anything described or referred to above in this Subsection 2.1(e), in each case
as such terms are defined under the Uniform Commercial Code from time to time,
including, without limitation, all of the following:

                                        4

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               (i) Certain Personalty. Any and all items referred to in the
                   ------------------
foregoing Subsections 2.1(a) through 2.1(c) which are described generally in the
foregoing portion of this Subsection 2.1(e); and

               (ii) Fixtures and Personal Collateral. All goods, furnishings,
                    --------------------------------
work in progress, machinery, equipment, fixtures (including all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature whatsoever leased or owned by Lessee, or
in which Lessee has or shall have an interest, now or hereafter located upon the
Mortgaged Property or the Improvements, or appurtenant thereto, and used in
connection with the present or future operation and occupancy of the Mortgaged
Property and the Improvements and all building equipment, materials and supplies
of any nature whatsoever leased or owned by Lessee, or in which Lessee has or
shall have an interest, now or hereafter located upon the Mortgaged Property and
the Improvements, or appurtenant thereto, or used in connection with the present
or future operation and occupancy of the Mortgaged Property and the
Improvements, including, but without limiting the generality of the foregoing,
all engines, furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting and
ventilating apparatus, air-cooling and air-conditioning apparatus, gas and
electric fixtures, elevators, escalators, fittings, machinery, furniture,
furnishings, items of personal property located within or adjacent to the
Improvements and included within the definition of "Property and Equipment" and
"Inventories" under the Uniform System of Accounts for Hotels as published by
the American Hotel Association of the United States and Canada, and further
including without limitation all china, glassware, tableware, uniforms, linen,
guest ledgers, books, vehicles, telephone systems, televisions and television
systems, computer systems, and all other equipment of every kind and
description, used or procured for use in the operation of any building,
structure or other improvement now or hereafter standing on the Mortgaged
Property (except apparatus, fixtures or articles of personal property belonging
to lessees or other occupants of any such building or to persons other than
Lessee unless the same be abandoned by any such lessee or other occupant or
person and shall become Lessee's property by reason of such abandonment or title
to the same shall by contract or operation of law otherwise pass to Lessee),
together with any and all replacements thereof and additions thereto
(collectively, the "Tangible Personal Collateral"), and the right, title and
interest of Lessee in and to any of the Tangible Personal Collateral which may
be subject to any security interests, as defined in the Uniform Commercial Code,
in effect in the state or states where any of the Mortgaged Property is located
or in another jurisdiction the Uniform Commercial Code of which is applicable
hereto (the "Uniform Commercial Code"), superior in lien to the lien of this
Security Agreement and all proceeds and products of the above; and

               (iii) Tax Certiorari. All refunds, rebates or credits in
                     --------------
connection with a reduction in real estate taxes and assessments charged against
the Mortgaged Property as a result of tax certiorari or any applications or
proceedings for reduction; and

               (iv) Rights. The right, in the name and on behalf of Lessee, to
                    ------
commence any action or proceeding to protect the interest of Lender in the
Mortgaged Property and while an Event of Default (as defined in the Mortgages)
remains uncured, to appear in and defend any action or proceeding brought with
respect to the Mortgaged Property; and

                                        5

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               (v) Agreements. All agreements, contracts, certificates,
                   ----------
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Mortgaged Property and any part thereof and any Improvements or
respecting any business or activity conducted on the Collateral and any part
thereof and all agreements with management agents (including, without
limitation, that certain Amendment and Restatement of Management Agreement
between Lessee and Residence Inn by Marriott, Inc.), leasing agents, sales
agents, service and maintenance agents, contractors and other third parties,
whether now existing or hereafter arising, relating to the management,
operation, leasing, sale, maintenance or repair of the Collateral, including
equipment leases, personal property leases, purchase and sale agreements,
together with any amendments or modifications thereto and any replacements
thereof executed during the term of the Loan; any and all contract rights
(including any contract with any architect or engineer or with any other
provider of goods or services for or in connection with any construction, repair
or other work upon the Collateral) relating to the Collateral; and any and all
warranties and guaranties relating to the Collateral or any fixtures, equipment
or personal property leased or owned by Lessee and located on and/or used in
connection with the Collateral now existing or hereafter arising; any and all
plans, permits, licenses, certificates of use and occupancy (or their
equivalent), trade names, insurance policies, applications and approvals issued
by any governmental authority or agency relating to a leasehold interest in or
in the construction, ownership, operation and/or use of the Collateral, whether
now existing or hereafter arising; and any and all rights, powers, privileges,
claims, remedies and causes of action of every kind which Lessee now has or may
in the future have with respect to or by reason of its interest in the contracts
or any other items referenced above, and all right, title and interest of Lessee
therein and thereunder, including the right, while an Event of Default remains
uncured, to receive and collect any sums payable to Lessee thereunder; and

               (vi) Service Rights. Any agreements, contracts, rights, licenses
                    --------------
or other interests of any type (collectively, the "Service Rights") (whether
exclusive or non-exclusive) granted or given to any Person to provide any
products or services to or for or with respect to the Mortgaged Property, any
tenant or any occupants of the Mortgaged Property, including any of the same
related to telecommunications, internet products or services, including, but not
limited to, personal computer hardware and software, internet hardware and
software, internet access services, printers, video display systems, audio sound
systems and communication telephonic devices, as well as related and
complementary products and services and any substitutes for, and items that are
a technological evolution of, any of the foregoing products; and

               (vii) Intangibles. All escrows, documents, instruments, chattel
                     -----------
paper, claims, deposits and other general intangibles, as the foregoing terms
are defined in the Uniform Commercial Code of the state in which the Collateral
is located; all franchises, trade names, symbols, service marks, logos,
copyrights, goodwill, books, records, plans, specifications, designs, drawings,
permits, consents, licenses, all rights, interest and privileges that now or
hereafter relate to, are derived from or are used in connection with the
Mortgaged Property, the Improvements or the Tangible Personal Collateral, or the
use, operation, maintenance, occupancy or enjoyment thereof or the conduct of
any business or activities thereon, including without limitation, any rights
which Lessee or Lessee's affiliates now or may hereafter have as

                                        6

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developer or declarant under any covenants, conditions, restrictions or
declarations now or hereafter relating to the Mortgaged Property or the
Improvements; and all approvals, actions, refunds of real estate taxes and
assessments (and any other governmental impositions related to the Collateral),
and causes of action that now or hereafter relate to, are derived from or are
used in connection with the Mortgaged Property, the Improvements or the Personal
Collateral, or the use, operation, maintenance, occupancy or enjoyment thereof
or the conduct of any business or activities thereon including, without
limitation, to the extent not included in accounts, all rights to payment from
guests and customers, all customer and guest lists, federal and state tax
refunds, reversionary interests in pension plan assets, trademarks, patents,
licenses, copyrights and other rights in intellectual property, other than
Accounts, and, to the extent assignable, all permits, business licenses, liquor
licenses and franchise agreements (hereinafter collectively referred to as the
"Intangibles"); and

               (viii) Other Rights. Inventory, cash receipts, deposit accounts,
                      ------------
accounts receivable, contract rights, licenses, agreements, notes, drafts,
letters of credit, all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing including proceeds of insurance and condemnation awards,
into cash or liquidation claims; any other rights to the payment of money; all
permits consents, approvals, licenses, authorizations and other rights granted
by, given by or obtained from, any governmental authority with respect to the
Collateral; all deposits, bonds or other security now or hereafter made with or
given to utility companies governmental authorities or other persons by Lessee
with respect to the Collateral or held for the benefit of tenants; all plans,
drawings and specifications relating to the Collateral; all loan funds held by
Lender, whether or not disbursed; all funds deposited with Lender pursuant to
any loan agreement; all reserves, deferred payments, deposits, accounts,
refunds, cost savings and payments of any kind related to the Collateral or any
portion thereof (including, but not limited to all refunds, rebates or credits
in connection with a reduction in real estate taxes and assessments charged
against the Collateral as a result of tax certiorari or any applications or
proceedings for reduction of taxes); the right, in the name and on behalf of
Lessee, to commence any action or proceeding to protect the interest of Lender
in the Collateral and while an Event of Default remains uncured, to appear in
and defend any action or proceeding brought with respect to the Collateral; all
options to purchase and rights of first refusal to purchase or acquire a fee
estate, easement interest or other real property right to land, both vacant and
improved, adjoining the Mortgaged Property now or hereafter in effect; together
with any proceeds, products, offspring, rents and profits from any of the
foregoing, including those from sale, exchange, transfer, collection, loss,
damage, disposition, substitution or replacement of any of the foregoing;
together with all books, records and files relating to any of the foregoing; and

               (ix) Accounts. All accounts now or hereafter owing to Lessee, and
                    --------
all accounts receivable, contract rights, documents, instruments or chattel
paper representing amounts payable or monies due or to become due to Lessee in
connection with the leasehold ownership, operation and/or maintenance of the
Mortgaged Property, including, without limitation, all revenues and credit card
receipts collected from guest rooms, restaurants, bars, banquet rooms, meeting
rooms, and recreational facilities, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, sublease, license, concession or other grant
of the right of the use and occupancy of property or rendering of services by
Lessee or any operator or manager of the hotel or the commercial space located
on the Mortgaged Property or acquired from others (including, without

                                        7

<PAGE>

limitation, from the rental of any office space, retail space, guest rooms or
other space, halls, stores, and offices, and deposits securing reservations of
such space), license, sublease and concession fees and rentals, health club
membership fees, food and beverage wholesale and retail sales, service charges,
vending machine sales and proceeds, if any, from business interruption or other
loss of income insurance, or arising from the sale of Inventory or the rendition
of services in the ordinary course of business or otherwise (whether or not
earned by performance), together with all Inventory returned by or reclaimed
from customers wherever such Inventory is located, and all guaranties,
securities and liens held for the payment of any such account, account
receivable, contract right, document, instrument or chattel paper.

          (f) Condemnation Awards. All awards or payments, including interest
              -------------------
thereon, which may heretofore and hereafter be made with respect to the
Mortgaged Property, whether from the exercise of the right of eminent domain
(including any transfer made in lieu of or in anticipation of the exercise of
the right), or for a change of grade, or for any other injury to or decrease in
the value of the Mortgaged Property; and

          (g) Insurance Proceeds. All proceeds of and any unearned premiums on
              ------------------
any insurance policies covering the Mortgaged Property, including the right to
receive and apply the proceeds of any insurance judgments, or settlements made
in lieu thereof, for damage to the Collateral; and

          (h) Conversion. All proceeds of the conversion, voluntary or
              ----------
involuntary, of any of the foregoing including proceeds of insurance and
condemnation awards, into cash or liquidation claims; and

          (i) Proceeds. All proceeds, products, extensions, additions,
              --------
improvements, betterments, renewals, offspring, rents and profits from any of
the foregoing, including those from sale, exchange, transfer, collection, loss,
damage, disposition, substitution or replacement of any of the foregoing, and
all inventory, accounts, chattel paper, documents, instruments, equipment,
fixtures, farm products, consumer goods, general intangibles and other property
of any nature constituting proceeds acquired with proceeds of any of the
Collateral described hereinabove and including (i) whatever is received upon any
collection, exchange, sale or other disposition of any of the Collateral and any
property into which any of the Collateral is converted, whether cash or
non-cash, including without limitation all cash on hand, income and other
amounts now or hereafter generated from the operation, use or maintenance of the
Mortgaged Property and all cash or cash equivalents to cover pre-paid
reservations related to the Mortgaged Property, (ii) any and all payments or
other property (in any form whatsoever) made or due and payable on account of
any insurance, indemnity, warranty or guaranty payable to Lessee with respect to
any of the Collateral, (iii) any and all payments (in any form whatsoever) made
or due and payable in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person, corporation,
agency, authority or other entity acting under color of any governmental
authority), and (iv) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral; and

                                        8

<PAGE>

          (j) Greater Rights. All other or greater rights and interests of every
              --------------
nature in the Mortgaged Property or the Improvements and in the possession or
use thereof and income therefrom, whether now owned or leased or hereafter
acquired by Lessee.

     Section 2.2 Continuing Liability of Lessee. Anything herein to the contrary
                 ------------------------------
notwithstanding, Lessee shall remain liable to observe and perform all the terms
and conditions to be observed and performed by it under any contract, agreement,
warranty or other obligation with respect to the Collateral, and shall do
nothing to impair the security interests herein granted. Lender shall not have
any obligation or liability under any such contract, agreement, warranty or
obligation by reason of or arising out of this Security Agreement or the receipt
by Lender of any payment relating to any Collateral, nor shall Lender be
required to perform or fulfill any of the obligations of Lessee with respect to
the Collateral, to make any inquiry as to the nature or sufficiency of any
payment received by it or the sufficiency of the performance of any party's
obligations with respect to any Collateral. Furthermore, Lender shall not be
required to file any claim or demand to collect any amount due or to enforce the
performance of any party's obligations with respect to the Collateral.

     Section 2.3 Verification of Accounts. Lender shall have the right to make
                 ------------------------
test verifications of Accounts in any manner and through any medium that it
considers advisable, and Lessee agrees to furnish all such assistance and
information as Lender may require in connection therewith. Lessee shall provide
such information concerning the Accounts as Lender may hereafter from time to
time reasonably request.

     Section 2.4 Release of Collateral. Upon the payment in full of all of the
                 ---------------------
Obligations, Lender will (as soon as reasonably practicable after receipt of
notice from Lessee requesting the same but at the expense of Lessee) send
Lessee, for each jurisdiction in which a UCC financing statement is on file to
perfect the security interests granted to Lender hereunder, a termination
statement to the effect that Lender no longer claims a security interest under
such financing statement.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     Lessee represents and warrants that, except as otherwise disclosed to or
known by Lender as of the date of hereof:

     Section 3.1 Validity of Security Agreement; Consents. The execution,
                 ----------------------------------------
delivery and performance of this Security Agreement and the creation of the
security interests provided for herein (i) do not violate any law or regulation
or any order or decree of any court or governmental instrumentality applicable
to Lessee, (ii) do not conflict with or result in a breach of, or constitute a
default under, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Lessee is a party or by which it or any of its properties is
bound, (iii) do not result in the creation or imposition of any lien upon any
property of Lessee other than in favor of Lender, and (iv) do not require the
consent or approval of any governmental body, agency or official or other person
other than those that have been obtained. This Security Agreement has been duly
executed and delivered by Lessee and constitutes the legal, valid and binding
obligation of Lessee, enforceable against it in accordance with its terms,
except as such

                                        9

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enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforceability of creditors' rights generally and by general provisions of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

     Section 3.2 Title to Collateral. Except for the security interests granted
                 -------------------
to Lender pursuant to this Security Agreement and the other Loan Documents,
Lessee holds a leasehold interest in each item of the Collateral, having good
and marketable title thereto, free and clear of any and all liens, encumbrances,
security interests and claims of others. Lessee expressly acknowledges and
agrees that Lessee's interest in and to the Collateral is expressly subject to
the liens, security titles and security interests in favor of Lender pursuant to
the Loan Documents previously executed and delivered by Borrower and that this
Security Agreement is given to Lender in furtherance thereof. Lessee further
acknowledges and agrees that all revenues generated by the Mortgaged Property
shall be remitted by Residence Inn By Marriott, Inc. in accordance with the
terms of the Four Party Agreement.

     Section 3.3 Validity, Perfection and Priority of Security Interests.
                 -------------------------------------------------------

          (a) By complying with Section 4.1, Lessee will have created a valid
security interest in favor of Lender in Lessee's interest in all existing
Collateral and in all identifiable proceeds of such Collateral, which security
interest (except in respect of motor vehicles for which the exclusive manner of
perfecting a security interest therein is by noting such security interest on
the certificate of title in accordance with local law) would be prior to the
claims of a trustee in bankruptcy under Section 544(a) of the United States
Bankruptcy Code. Continuing compliance by Lessee with the provisions of Section
4.2 will also (i) create valid security interests in Lessee's interest in all
Collateral acquired after the date hereof and in all identifiable proceeds of
such Collateral and, (ii) cause such security interests in all Collateral and in
all proceeds which are (A) identifiable cash proceeds of Collateral covered by
financing statements required to be filed hereunder, and (B) identifiable
proceeds in which a security interest may be perfected by such filing under the
UCC.

          (b) Lessee has not granted a security interest in any of the
Collateral to any person other than Lender. Other than financing statements or
other similar documents perfecting the security interests or deed of trust liens
of Lender, no financing statements, deeds of trust, mortgages or similar
documents covering all or any part of the Collateral are on file or of record in
any government office in any jurisdiction in which such filing or recording
would be effective to perfect a security interest in such Collateral, nor is any
of the Collateral in the possession of any person (other than Lessee) asserting
any claim thereto or security interest therein.

     Section 3.4 Other Representations and Warranties.
                 ------------------------------------

          (a) AHM Res I Limited Partnership is the correct legal name of the
Lessee (including, without limitation, punctuation and spacing) indicated on the
public record of the Lessee's jurisdiction of organization which shows the
Lessee to be organized.

          (b) The Lessee is a limited partnership organized under the laws of
the State of Virginia and its organizational/control number is L017116-7.

                                       10

<PAGE>

          (c) The Lessee's mailing address is 10 South Third Street, Richmond,
Virginia 23219.

          (d) The federal tax identification number of Lessee is 54-2057515.

                                   ARTICLE IV
                                    COVENANTS

     Lessee covenants and agrees with Lender that until the payment in full of
all Obligations and until there is no commitment by Lender to make further
advances, incur obligations or otherwise give value, Lessee will comply with the
following.

     Section 4.1 Perfection of Security Interests. Lessee hereby authorizes
                 --------------------------------
Lender, its counsel or its representative, at any time and from time to time, to
file financing statements, amendments and continuations that describe or relate
to the Collateral or any portion thereof in such jurisdictions as Lender may
deem necessary or desirable in order to perfect the security interests granted
by Lessee under this Security Agreement or any other Loan Document, and such
financing statements may contain, among other items as Lender may deem advisable
to include therein, the federal tax identification number of Lessee, and may
describe the property covered by such financing statements as "all assets of
Lessee," "all personal property of Lessee" or words of similar effect.

     Section 4.2 Further Actions.
                 ---------------

          (a) Lessee will, from time to time and at its expense, execute,
deliver, file or record such financing statements pursuant to the Uniform
Commercial Code, applications for certificates of title and such other
statements, assignments, instruments, documents, agreements or other papers and
take any other action that Lender may reasonably request, in order to create,
preserve, perfect, confirm or validate the security interests, to enable Lender
to obtain the full benefits of this Security Agreement or to enable it to
exercise and enforce any of its rights, powers and remedies hereunder,
including, without limitation, its right to take possession of the Collateral,
and will use its best efforts to obtain such waivers from landlords and
mortgagees as Lender may request.

          (b) Lessee will not merge or consolidate into, or transfer of any of
the Collateral to, any other person or entity without the prior written consent
of Lender.

          (c) Lessee shall not change its name unless it has given Lender thirty
(30) days' prior written notice thereof

          (d) Lessee shall, at any time and from time to time, whether or not
the Official Text of Revised Article 9, 2000 Revision, of the Uniform Commercial
Code promulgated by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws or a version thereof ("UCC Revised Article
9") is in effect in any particular jurisdiction, take such steps as Lender may
reasonably request for Lender (A) to obtain an acknowledgment, in form and
substance reasonably satisfactory to Lender, of any bailee having possession of
any of the Mortgaged Property, stating that the bailee holds possession of such
Mortgaged Property on behalf of Lender, (B) to obtain "control" of any
investment property, deposit accounts, letter-of-

                                       11

<PAGE>

credit rights, or electronic chattel paper (as such terms are defined by UCC
Revised Article 9 with corresponding provisions thereof defining what
constitutes "control" for such items of collateral), with any agreements
establishing control to be in form and substance reasonably satisfactory to
Lender, and (C) otherwise to insure the continued perfection and priority of the
Lender's security interest in any of the Collateral and of the preservation of
its rights therein, whether in anticipation of or following the effectiveness of
UCC Revised Article 9 in any jurisdiction. If Lessee shall at any time, whether
or not UCC Revised Article 9 is in effect in any particular jurisdiction,
acquire a "commercial tort claim" (as such term is defined in UCC Revised
Article 9 with respect to the Collateral or any portion thereof) Lessee shall
promptly notify Lender thereof in writing, providing a reasonable description
and summary thereof, and shall execute a supplement to this Security Agreement
in form and substance acceptable to Lender granting a security interest in such
commercial tort claim to Lender.

     Section 4.3 Change of Name, Identity or Structure. Lessee will not change
                 -------------------------------------
its name, will not conduct its business under any trade, assumed or fictitious
name unless it shall have given Lender at least thirty (30) days' prior written
notice thereof and executed or authorized, at the request of Lender, such
additional financing statements to be filed in such jurisdictions as Lender may
deem necessary or desirable in its sole discretion.

     Section 4.4 Maintenance of Records. Lessee will keep and maintain at its
                 ----------------------
own cost and expense complete books and records relating to the Collateral which
are satisfactory to Lender including, without limitation, a record of all
payments received and all credits granted with respect to the Collateral and all
of its other dealings with the Collateral. Lessee will mark its books and
records pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby. For Lender's further security, Lessee agrees
that Lender shall have a special property interest in all of Lessee's books and
records pertaining to the Collateral and Lessee shall deliver and turn over any
such books and records, or copies thereof, to Lender or to its representatives
at any time on demand of the Lender.

     Section 4.5 Compliance with Laws, etc. Lessee will comply, in all material
                 -------------------------
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental body, agency or official applicable to the Collateral or any
part thereof or to the operation of the Mortgaged Property except to the extent
that the failure to comply would not have a material adverse effect on the
financial or other condition of the Mortgaged Property; provided, however, that
Lessee may contest any act, regulation, order, decree or direction in any
reasonable manner which shall not in the sole opinion of Lender adversely affect
Lender's rights or the first priority of its security interest in the
Collateral.

     Section 4.6 Payment of Taxes, etc. Lessee will pay promptly when due, all
                 ---------------------
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including claims for labor, materials and supplies), except
that no such charge need be paid if (i) the validity thereof is being contested
in good faith by appropriate proceedings, and (ii) such charge is adequately
reserved against in accordance with generally accepted accounting principals,
consistently applied.

                                       12

<PAGE>

     Section 4.7 Compliance with Terms of Accounts, Contracts and Licenses.
                 ---------------------------------------------------------
Lessee will perform and comply in all material respects with all of its
obligations under and, all agreements relating to the Collateral to which it is
a party or by which it is bound.

     Section 4.8 Limitation on Liens on Collateral. Except as to any liens now
                 ---------------------------------
in existence and known to Lender, Lessee will not create, permit or suffer to
exist, and will defend the Collateral and Lessee's rights with respect thereto
against and take such other action as is necessary to remove, any Lien, security
interest, encumbrance, or claim in or to the Collateral other than the security
interests created hereunder.

     Section 4.9 Limitations on Modifications of Accounts and Intangibles; No
                 ------------------------------------------------------------
Waivers or Extensions. Lessee will not amend, modify, terminate or waive any
---------------------
provision of any material receivable or other intangible in any manner which
might have a materially adverse effect on the value of such receivable or other
intangible as Collateral other than in the ordinary course of business. Lessee
will not, without Lender's prior written consent, grant any extension of the
time of payment of any material receivable or amounts due under any material
other intangible, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any person liable for the payment
thereof or allow any credit or discount whatsoever thereon other than trade
discounts granted in the normal course of business, except such as in the
reasonable judgment of Lessee are advisable to enhance the collectability
thereof.

     Section 4.10 Limitations on Dispositions of Collateral. Lessee will not
                  -----------------------------------------
directly or indirectly (through the sale of stock, merger or otherwise) without
the prior written consent of Lender sell, transfer, lease or otherwise dispose
of any of the Collateral, or attempt, offer or contract to do so except for
sales of Inventory in the ordinary course of its business for fair value in
arm's-length transactions. The inclusion of proceeds of the Collateral under the
security interests granted hereby shall not be deemed a consent by Lender to any
sale or disposition of any Collateral other than as permitted by this Section
4.10.

     Section 4.11 Right of Inspection. Lender shall at all times have full and
                  -------------------
free access during normal business hours to all the books, correspondence and
records of Lessee related to the Mortgaged Property, and Lender or its
representatives may examine the same, take extracts therefrom, make photocopies
thereof and have such discussions with officers, employees and public
accountants of Lessee as Lender may deem necessary, and Lessee agrees to render
to Lender, at Lessee's cost and expense, such clerical and other assistance as
may be reasonably requested with regard thereto. Lender and its representatives
shall at all times also have the right to enter into and upon any premises where
any of the Inventory is located for the purpose of inspecting the same,
observing its use or protecting interests of Lender therein.

                                   ARTICLE V
                          REMEDIES; RIGHTS UPON DEFAULT

     Section 5.1 UCC Rights. If any Event of Default shall have occurred, Lender
                 ----------
may in addition to all other rights and remedies granted to it in this Security
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, exercise all rights and remedies of a secured party
under the UCC and all other rights available to Lender at law or in equity.

                                       13

<PAGE>

     Section 5.2 Payments on Collateral. Without limiting the rights of Lender
                 ----------------------
under any other provision of the Security Agreement, if an Event of Default
shall occur and be continuing:

          (a) all payments received by Lessee under or in connection with any of
the Collateral shall be held by Lessee in trust for Lender, shall be segregated
from other funds of Lessee and shall forthwith upon receipt by Lessee be turned
over to Lender, in the same form as received by Lessee (duly indorsed by Lessee
to Lender, if required to permit collection thereof by Lender); and

          (b) all such payments received by Lender (whether from Lessee or
otherwise) shall be applied in accordance with the terms and provisions of the
Loan Documents.

     Section 5.3 Possession of Collateral. In furtherance of the foregoing,
                 ------------------------
Lessee expressly agrees that, if an Event of Default shall occur and be
continuing, Lender may (i) by judicial powers, or without judicial process if it
can be done without breach of the peace, enter any premises where any of such
Collateral is or may be located, and without charge or liability to Lender seize
and remove such Collateral from such premises and (ii) have access to and use of
Lessee's books and records relating to such Collateral.

     Section 5.4 Sale of Collateral.
                 ------------------

          (a) Lessee expressly agrees that if an Event of Default shall occur
and be continuing, Lender, without demand of performance or other demand or
notice of any kind (except the notice specified below of the time and place of
any public or private sale) to Lessee or any other person (all of which demands
and/or notices are hereby waived by Lessee), may forthwith collect, receive,
appropriate and realize upon the Collateral and/or forthwith sell, lease,
assign, give an option or options to purchase or otherwise dispose of and
deliver the Collateral (or contract to do so) or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any
office of Lender or elsewhere in such manner as is commercially reasonable and
as Lender may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Lender shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold. Lessee further agrees,
at Lender's request, to assemble the Collateral, and to make it available to
Lender at places which Lender may reasonably select. To the extent permitted by
applicable law, Lessee waives all claims, damages and demands against Lender
arising out of the foreclosure, repossession, retention or sale of the
Collateral.

          (b) Unless the Collateral threatens to decline speedily in value or is
of a type customarily sold in a recognized market, Lender shall give Lessee ten
days written notice of its intention to make any such public or private sale or
sale at a broker's board or on a securities exchange. Such notice shall (i) in
the case of a public sale, state the time and place fixed for such sale, (ii) in
the case of a sale at a broker's board or on a securities exchange, state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or any portion thereof being sold, will first be offered for sale,
and (iii) in the case of a private sale, state the day after which such sale may
be consummated. Lender shall not be required or obligated to make any such sale
pursuant to any such notice. Lender may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed

                                       14

<PAGE>

for the sale, and such sale may be made at any time or place to which the same
may be so adjourned. In the case of any sale of all or any part of the
Collateral for credit or for future delivery, the Collateral so sold may be
retained by Lender until the selling price is paid by the purchaser thereof, but
Lender shall not incur any liability in case of failure of such purchaser to pay
for the Collateral so sold and, in the case of such failure, such Collateral may
again be sold upon like notice.

     Section 5.5 Rights of Purchasers. Upon any sale of the Collateral (whether
                 --------------------
public or private), Lender shall have the right to deliver, assign and transfer
to the purchaser thereof the Collateral so sold. Each purchaser (including
Lender) at any such sale shall hold the Collateral so sold free from any claim
or right of whatever kind, including any equity or right of redemption of
Lessee, and Lessee, to the extent permitted by law, hereby specifically waives
all rights of redemption, including, without limitation, the right to redeem the
Collateral under Section 9-506 of the UCC, and any right to a judicial or other
stay or approval which it has or may have under any law now existing or
hereafter adopted.

     Section 5.6 Additional Rights of Lender.
                 ---------------------------

          (a) Lender shall have the right and power to institute and maintain
such suits and proceedings as it may deem appropriate to protect and enforce the
rights vested in it by this Security Agreement and may proceed by suit or suits
at law or in equity to enforce such rights and to foreclose upon and sell the
Collateral or any part thereof pursuant to the judgment or decree of a court of
competent jurisdiction.

          (b) Lender shall, to the extent permitted by law and without regard to
the solvency or insolvency at the time of any person then liable for the payment
of any of the Obligations or the then value of the Collateral, and without
requiring any bond from any party to such proceedings, be entitled to the
appointment of a special receiver or receivers (who may be Lender) for the
Collateral or any part thereof and for the rents, issues, tolls, profits,
royalties, revenues and other income therefrom, which receiver shall have such
powers as the court making such appointment shall confer, and to the entry of an
order directing that the rents, issues, tolls, profits, royalties, revenues and
other income of the property constituting the whole or any part of the
Collateral be segregated, sequestered and impounded for the benefit of Lender,
and Lessee irrevocably consents to the appointment of such receiver or receivers
and to the entry of such order.

     Section 5.7 Remedies Not Exclusive.
                 ----------------------

          (a) No remedy conferred upon or reserved to Lender in this Security
Agreement is intended to be exclusive of any other remedy or remedies, but every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law, in equity or by statute.

          (b) If Lender shall have proceeded to enforce any right, remedy or
power under this Security Agreement and the proceeding for the enforcement
thereof shall have been discontinued or abandoned for any reason or shall have
been determined adversely to Lender, Lessee and Lender shall, subject to any
determination in such proceeding, severally and

                                       15

<PAGE>

respectively be restored to their former positions and rights under this
Security Agreement, and thereafter all rights, remedies and powers of Lender
shall continue as though no such proceedings had been taken.

          (c) All rights of action under this Security Agreement may be enforced
by Lender without the possession of any instrument evidencing any Obligation or
the production thereof at any trial or other proceeding relative thereto, and
any suit or proceeding instituted by Lender shall be brought in its name and any
judgment shall be held as part of the Collateral.

     Section 5.8 Waiver and Estoppel.
                 -------------------

          (a) Lessee, to the extent it may lawfully do so, agrees that it will
not at any time in any manner whatsoever claim or take the benefit or advantage
of any appraisement, valuation, stay, extension, moratorium, turnover or
redemption law, or any law now or hereafter in force permitting it to direct the
order in which the Collateral shall be sold which may delay, prevent or
otherwise affect the performance or enforcement of this Security Agreement and
Lessee hereby waives the benefits or advantage of all such laws, and covenants
that it will not hinder, delay or impede the execution of any power granted to
Lender in this Security Agreement but will permit the execution of every such
power as though no such law were in force; provided that nothing contained in
this Section 5.8 shall be construed as a waiver of any rights of Lessee under
any applicable federal bankruptcy law.

          (b) Lessee, to the extent it may lawfully do so, on behalf of itself
and all who may claim through or under it, including without limitation any and
all subsequent creditors, vendees, assignees and lienors, waives and releases
all rights to demand or to have any marshaling of the Collateral upon any sale,
whether made under any power of sale granted herein or pursuant to judicial
proceedings or upon any foreclosure or any enforcement of this Security
Agreement and consents and agrees that all the Collateral may at any such sale
be offered and sold as an entirety.

          (c) Lessee, to the extent it may lawfully do so, waives presentment,
demand, protest and any notice of any kind (except notices explicitly required
hereunder) in connection with this Security Agreement and any action taken by
Lender with respect to the Collateral.

     Section 5.9 Power of Attorney. Lessee hereby irrevocably constitutes and
                 -----------------
appoints Lender, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Lessee and in the name of Lessee or in its own name, from time to time
in Lender's reasonable discretion for the purpose of carrying out the terms of
this Security Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement and, without limiting the
generality of the foregoing, hereby gives Lender the power and right, on behalf
of Lessee, without notice to or assent by Lessee to do the following:

          (a) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral;

                                       16

<PAGE>

          (b) upon the occurrence and continuance of any Event of Default and
otherwise to the extent provided in this Security Agreement, (i) to direct any
party liable for any payment under any of the Collateral to make payment of any
and all moneys due and to come due thereunder directly to Lender or as Lender
shall direct; (ii) to receive payment of and receipt for any and all moneys,
claims and other amounts due and to become due at any time in respect of or
arising out of any Collateral; (iii) to sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts and
other documents relating to the Collateral; (iv) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (v) to defend any suit, action or proceeding
brought against Lessee with respect to any Collateral; (vi) to settle,
compromise and adjust any suit, action or proceeding described above and, in
connection therewith, to give such discharges or releases as Lender may deem
appropriate; and (vii) generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Lender were the absolute owner thereof for all purposes,
and to do, at Lender's option and Lessee's expense, at any time, or from time to
time, all acts and things which Lender deems necessary to protect, preserve or
realize upon the Collateral and Lender's security interest therein, in order to
effect the intent of this Security Agreement, all as fully and effectively as
Lessee might do.

     Lessee hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.

     Section 5.10 Application of Proceeds. Lender shall retain the net proceeds
                  -----------------------
of any collection, recovery, receipt, appropriation, realization or sale of the
Collateral and, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care and safekeeping of any or all of the
Collateral or in any way relating to the rights of Lender hereunder, including
reasonable attorneys' fees and legal expenses, apply such net proceeds to the
payment in whole or in part of the Obligations in such order as Lender may
elect. Only after applying such net proceeds and after the payment by Lender of
any other amount required by any provision of law, including Section 9-504(1)(c)
of the UCC, need Lender account for the surplus, if any, to Lessee or to
whomsoever may be lawfully entitled to the same.

                                   ARTICLE VI
                                  MISCELLANEOUS

     Section 6.1 Notices. Any notice, demand, statement, request or consent made
                 -------
hereunder shall be in writing and shall be deemed appropriately given if given
in accordance with the requirements of the Loan Agreement.

     Section 6.2 No Waivers. No failure on the part of Lender to exercise, no
                 ----------
course of dealing with respect to, and no delay in exercising any right, power
or privilege under this Security Agreement or any document or agreement
contemplated hereby shall operate as a waiver thereof or shall any single or
partial exercise of any such right, power or privilege

                                       17

<PAGE>

preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

     Section 6.3 Compensation and Expenses of Lender. Lessee shall pay to Lender
                 -----------------------------------
from time to time upon demand, all of the fees, costs and expenses incurred by
Lender (including, without limitation, the reasonable fees and disbursements of
counsel and any amounts payable by Lender to any of its agents, whether on
account of fees, indemnities or otherwise) (i) arising in connection with the
administration, modification, amendment, waiver or termination of this Security
Agreement or any document or agreement contemplated hereby or any consent or
waiver hereunder or thereunder or (ii) incurred in connection with the
administration of this Security Agreement, or any document or agreement
contemplated hereby, or in connection with the administration, sale or other
disposition of Collateral hereunder or under any document or agreement
contemplated hereby or the preservation, protection or defense of the rights of
Lender in and to the Collateral.

     Section 6.4 Amendments, Supplements and Waivers. The parties hereto may,
                 -----------------------------------
from time to time, enter into written agreements supplemental hereto for the
purpose of adding any provisions to this Security Agreement, waiving any
provisions hereof or changing in any manner the rights of the parties.

     Section 6.5 Successors and Assigns. This Security Agreement shall be
                 ----------------------
binding upon and inure to the benefit of each of the parties hereto and shall
inure to the benefit of Lender's successors and assigns. Nothing herein is
intended or shall be construed to give any other person any right, remedy or
claim under, to or in respect of this Security Agreement or any Collateral.

     Section 6.6 Limitation of Law; Severability.
                 -------------------------------

          (a) All rights, remedies and powers provided in this Security
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of this Security
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render this Security Agreement invalid, unenforceable in whole or
in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.

          (b) If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provisions in any other jurisdiction.

     Section 6.7 Governing Law. This Security Agreement shall be governed by and
                 -------------
construed in accordance with the laws of the state of New York. (other than
those conflicts of laws provisions that would defer to the substantive laws of
another jurisdiction). Without in any way limiting the preceding choice of law,
the parties elect to be governed by New York law in

                                       18

<PAGE>

accordance with, and are relying (at least in part) on, Section 5-1401 of the
General Obligations Law of the State of New York

     Section 6.8 Counterparts; Effectiveness. This Security Agreement may be
                 ---------------------------
signed in any number of counterparts with the same effect as if the signatures
thereto and hereto were upon the same instrument.

     Section 6.9 Termination; Survival. This Security Agreement shall terminate
                 ---------------------
when the security interests granted hereunder have terminated and the Collateral
has been released as provided in Section 2.4, provided that the obligations of
Lessee under any of Section 6.3 shall survive any such termination.

     IN WITNESS WHEREOF, Lessee has duly executed this Security Agreement to be
effective the day and year first above written.

                                       19

<PAGE>

                                  LESSEE:
                                  ------

                                  AHM RES I LIMITED PARTNERSHIP, a
                                  Virginia limited partnership

                                  By: AHM Res I GP, Inc., a Virginia corporation


                                  By:    /s/ Glade M. Knight
                                      ------------------------------------------
                                  Name:  Glade M. Knight
                                        ----------------------------------------
                                  Title: President
                                         ---------------------------------------

                                  LENDER:
                                  ------

                                  LASALLE BANK NATIONAL ASSOCIATION,
                                  as Indenture Trustee for the benefit of the
                                  Holders of iStar Asset Receivables Trust
                                  Collateralized Mortgage Bonds Series 2000-1

                                  By: iStar Assets Services, Inc., as duly
                                      authorized primary servicer


                                      By:  /s/ Barbara Rubin
                                          --------------------------------------
                                      Name: Barbara Rubin
                                      Title: President

                                       20