THIS INSTRUMENT WAS PREPARED BY:
PAULA MCDONALD RHODES, ESQUIRE
CARLTON, FIELDS, WARD, EMMANUEL,
         SMITH & CUTLER, P.A.
P.O. BOX 3239
TAMPA, FLORIDA  33601




                         MORTGAGE AND SECURITY AGREEMENT

         THIS MORTGAGE AND SECURITY AGREEMENT ("MORTGAGE"), is made effective as
of the 23rd day of June, 1997, from WEST BAY CLUB DEVELOPMENT CORPORATION, a
Florida corporation, formerly known as Estero Pointe Development Corporation
("WEST BAY CLUB"), having an office at 2601 South Bayshore Drive, Miami, Florida
33133 ("MORTGAGOR"), to THE BANK OF NEW YORK, a New York banking corporation,
and its successors and assigns, having an office at Towermarc Plaza, 2nd Floor,
10161 Centurion Parkway, Jacksonville, Florida 32256 ("MORTGAGEE"), as
collateral agent for AP-AGC, LLC, a Delaware limited liability company
("OBLIGEE").

                              W I T N E S S E T H:
                              --------------------

         WHEREAS, Mortgagor owns the parcels of real property (the "LAND")
described in EXHIBIT A attached hereto and hereby made a part hereof, together
with all buildings and improvements presently located thereon;

THIS  MORTGAGE IS ONE OF SEVERAL  MORTGAGES  SECURING  THE  OBLIGATIONS  SECURED
HEREBY,  WHICH SECURED OBLIGATIONS ARE THE JOINT AND SEVERAL PRIMARY OBLIGATIONS
OF THE MORTGAGORS  HEREUNDER AND UNDER THAT CERTAIN JUNIOR MORTGAGE AND SECURITY
AGREEMENT GIVEN BY ATLANTIC GULF COMMUNITIES CORPORATION,  ENVIRONMENTAL QUALITY
LABORATORY,  INCORPORATED, GENERAL DEVELOPMENT UTILITIES, INC., FIVE STAR HOMES,
INC., AND ATLANTIC GULF OF TAMPA, INC. IN FAVOR OF FOOTHILL CAPITAL CORPORATION,
AS COLLATERAL AGENT FOR OBLIGEE ("AG AGENT"),  BEING RECORDED  CONTEMPORANEOUSLY
HEREWITH IN THE FLORIDA COUNTIES OF BREVARD, BROWARD, CHARLOTTE, CITRUS, DESOTO,
GLADES, HENDRY,  HILLSBOROUGH,  INDIAN RIVER, LEE, MARION, PALM BEACH, ST. LUCIE
AND SARASOTA  ("COMPANION  MORTGAGE").  DOCUMENTARY STAMP TAXES IN THE AMOUNT OF
$87,500.00 DUE ON THE OBLIGATIONS  SECURED HEREBY AND BY THE COMPANION  MORTGAGE
ARE BEING PAID UPON  RECORDATION  OF THIS  MORTGAGE IN LEE COUNTY,  FLORIDA.  NO
INTANGIBLE  PERSONAL PROPERTY TAXES ARE DUE UPON RECORDATION OF THIS MORTGAGE OR
THE  COMPANION  MORTGAGE  AS THE  OBLIGATIONS  SECURED  HEREBY AND  THEREBY  ARE
CONTINGENT IN NATURE.


<PAGE>


         WHEREAS, pursuant to that certain Investment Agreement dated as of
February 7, 1997, amended as of March 20, 1997, and amended and restated as of
May 15, 1997 (together with any and all modifications, amendments, replacements,
renewals and extensions thereof, the "INVESTMENT AGREEMENT") among Obligee,
Atlantic Gulf Communities Corporation, a Delaware corporation ("COMPANY"), and
the subsidiaries of the Company, Obligee has agreed to purchase up to
$25,000,000 in the aggregate of preferred stock to be issued by the Company;

         WHEREAS, Obligee, the Company, and the Mortgagor, among others, are
parties to that certain Secured Agreement dated February 7, 1997, and amended
and restated as of May 15, 1997 (together with any and all modifications,
amendments, replacements, renewals and extensions thereof, the "SECURED
AGREEMENT");

         WHEREAS, all capitalized terms used herein and not otherwise defined
shall have the meaning given such terms in the Secured Agreement;

         WHEREAS, pursuant to the Secured Agreement and the Investment
Agreement, the Company, the Mortgagor, and the other subsidiaries of the Company
have executed and delivered to the Obligee that certain Secured Evidence of
Joint and Several Repurchase Obligations (together with any and all additions,
modifications, amendments, renewals, extensions thereof, the "INSTRUMENT"),
evidencing (a) after the issuance of the Preferred Stock, the joint and several
obligations of the Company, the Mortgagor and other subsidiaries of the Company
pursuant to Section 8 of the Certificate of Designation to repurchase Preferred
Stock on the happening of certain conditions set forth in the Certificate of
Designation at a repurchase price equal to the Liquidation Preference in respect
thereof, as defined in the Certificate of Designation, consisting of, at any
time, $10.00 per share of Preferred Stock, plus accumulated and unpaid dividends
thereon through the date of such determination, whether or not funds are legally
available therefor, the aggregate amount of which, upon issuance of the
2,500,000 shares of Preferred Stock to be issued pursuant to the Investment
Agreement, shall be $25,000,000, plus accumulated and unpaid dividends, and (b)
after the occurrence of an Event of Default, as defined in the Certificate of
Designation, the joint and several obligations of the Company, Mortgagor and
other subsidiaries of the Company to indemnify Obligee from and against any and
all losses, claims, damages, expenses (including reasonable fees, disbursements
and other charges of counsel) or other liabilities resulting from any breach of
any covenant, agreement, representation or warranty of the Company in this
Mortgage or in any other Secured Instrument Document pursuant to Section 7.2 of
the Investment Agreement (collectively, the "OBLIGATIONS");

         WHEREAS, it is a condition precedent to Obligee making the investment
contemplated by the Investment Agreement that the Mortgagor provide, as
collateral security for the payment of the Obligations, a mortgage lien upon the
Mortgaged Property (as such term is hereinafter defined).

         NOW, THEREFORE, in order to induce Obligee to make the investment
contemplated by the Investment Agreement and for the purpose of securing payment
of the Secured Obligations, Mortgagor hereby agrees as follows:


                                        2
<PAGE>


         TO SECURE,

                  a.  the Obligations, whether or not from time to time
decreased or extinguished and later increased, created or incurred and all or
any portion of such obligations that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Obligee or
Mortgagee as a preference, fraudulent transfer or otherwise,

                  b.  all obligations of every nature (whether of payment, of
performance or otherwise) of the Company, the Mortgagor and other subsidiaries
of the Company from time to time owed to Obligee or Mortgagee or either of them
under the Secured Agreement or any other Secured Instrument Document other than
any Subsidiary Guaranty, whether for principal, interest (including interest
accruing after the commencement of a bankruptcy case, whether or not enforceable
in such case), repurchase or redemption obligations, dividend obligations, fees,
costs, expenses, indemnification liabilities or other obligations, of whatsoever
nature and whether now or hereafter made, incurred or created, whether absolute
or contingent, liquidated or unliquidated, regardless of class, whether due or
not due, and however arising,

                  c.  all future or additional  advances as described in Article
38 of this  Mortgage  as and when the same shall be made with the same force and
effect  as if such  future  or  additional  advances  had been  made on the date
hereof, and

                  d.  any amounts advanced by Mortgagee pursuant to paragraph 17
or any other paragraph of this Mortgage

(the foregoing being hereinafter collectively referred to as the "SECURED
OBLIGATIONS"), Mortgagor does hereby convey, grant, assign, transfer, mortgage
and set over to Mortgagee, all of Mortgagor's right, title and interest in and
to the following (collectively, the "MORTGAGED PROPERTY"):

         The Land;

         TOGETHER with the right, title and interest if any of Mortgagor, now
owned or hereafter acquired, in and to the streets, the land lying in the bed of
any streets, roads or avenues, opened or proposed, in front of, adjoining, or
abutting the Land to the center line thereof and strips and gores within or
adjoining the Land, the air space and right to use said air space above the
Land, all rights of way, privileges, liberties, hereditaments, all easements or
rights-of-way now or hereafter affecting the Land, all royalties and all rights
appertaining to the use and enjoyment of said Land, including, without
limitation, all alley, vault, drainage, mineral, water, oil and gas rights;

         TOGETHER with the buildings, structures and improvements now or
hereafter erected or located on the Land (the "IMPROVEMENTS") (the Land,
together with the Improvements are hereinafter collectively called the "REAL
ESTATE");


                                        3
<PAGE>


         TOGETHER with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the Real Estate, and the
reversion or reversions, remainder or remainders, rents, issues, profits and
revenue thereof; and also all the estate, right, title, interest, dower and
right of dower, curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both in law and equity, of Mortgagor, of, in and to the Real
Estate and of, in and to every part and parcel thereof, with the appurtenances,
at any time belonging or in anywise appertaining thereto;

         TOGETHER with all of the fixtures of every kind and nature whatsoever
currently owned or hereafter acquired by Mortgagor, and all appurtenances and
additions thereto and substitutions or replacements thereof, now or hereafter
attached to, the Real Estate (said fixtures of every kind and nature whatsoever,
and all appurtenances thereof, are hereinafter collectively referred to as the
"FIXTURES"), including, but without limiting the generality of the foregoing,
all plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, incinerating, and escalator, elevator, power, loading and
unloading equipment and systems, sprinkler systems and other fire prevention and
extinguishing apparatus and pipes, pumps, tanks, conduits, fittings and
fixtures; it being understood and agreed that all Fixtures are appropriated to
the use of the Real Estate and, whether affixed or annexed or not, for the
purposes of this Mortgage shall be deemed conclusively to be Real Estate and
mortgaged hereby; and Mortgagor hereby agrees to execute and deliver, from time
to time, such further instruments (including financing statements), as may be
requested by Mortgagee to confirm the lien of this Mortgage on the Fixtures;

         TOGETHER with all unearned premiums, accrued, accruing or to accrue
under insurance policies now or hereafter obtained by Mortgagor and Mortgagor's
interest in and to all proceeds of the conversion and the interest payable
thereon, voluntary or involuntary, of the Mortgaged Property, or any part
thereof, into cash or liquidated claims, including, without limiting the
generality of the foregoing, proceeds of casualty insurance, title insurance or
any other insurance maintained on the Real Estate and the Fixtures, and the
right to collect and receive the same, and all awards and/or other compensation
including the interest payable thereon and the right to collect and receive the
same (in the alternative and collectively, "AWARDS"), heretofore and hereafter
made to the present and all subsequent owners of the Real Estate and the
Fixtures by the United States, the State of Florida or any political subdivision
thereof, or any agency, department, bureau, board, commission, or
instrumentality of any of them, now existing or hereafter created (collectively,
"GOVERNMENTAL AUTHORITY") for the taking by eminent domain, condemnation or
otherwise, of all or any part of the Real Estate and Fixtures or any easement or
other right therein, including, without limiting the generality of the
foregoing, Awards for any change or changes of grade or the widening of streets,
roads or avenues affecting the Real Estate, to the extent of all amounts which
may be secured by this Mortgage as of the date of receipt, notwithstanding the
fact that the amount thereof may not then be due and payable, and to the extent
of reasonable attorneys' fees, costs and disbursements incurred by Mortgagee in
connection with the collection of such Awards. Mortgagor hereby assigns to
Mortgagee, and Mortgagee is hereby authorized to collect and receive such Awards
(subject to any Mortgagor's right to be paid directly and apply certain Awards
as expressly provided by this Mortgage), and to give proper receipts and
acquittances therefor and, subject to the other provisions hereof, to apply the
same toward the Secured Obligations, notwithstanding the fact


                                        4
<PAGE>


that the full amount thereof may not then be due and payable; Mortgagor hereby
agrees, upon demand of Mortgagee, to make, execute and deliver, from time to
time, such further instruments as may be reasonably requested by Mortgagee to
confirm such assignment of said Awards to Mortgagee, free and clear and
discharged of any encumbrances of any kind or nature whatsoever;

         TOGETHER with all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and appurtenances to, the
Real Estate and the Fixtures, hereafter acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor on the Real Estate, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further mortgage, conveyance,
assignment or other act by Mortgagor, shall become subject to the lien of this
Mortgage as fully and completely, and with the same effect, as though now owned
by Mortgagor and specifically described herein;

         TOGETHER with all of the rights and interest of Mortgagor as the
declarant and as the developer under any document affecting the Land including,
but not limited to, any condominium documents or property association documents.
Notwithstanding the foregoing, Mortgagee shall not have any obligation as the
developer or declarant unless Mortgagee executes an agreement expressly assuming
such obligation;

         TOGETHER with all proceeds, both cash and noncash, of the foregoing
which may be sold or otherwise be disposed of;

         TOGETHER with any and all monies now or hereafter on deposit for the
payment of real estate taxes or special assessments against the Real Estate or
for the payment of premiums on policies of fire and other hazard insurance
covering the Mortgaged Property.

         TO HAVE AND TO HOLD the Mortgaged Property, together with all and
singular of the rights, privileges, tenements, hereditaments and appurtenances
thereto in any way incident or belonging unto Mortgagee and to its successors
and assigns forever, subject to the terms and conditions herein:

         PROVIDED, HOWEVER, that this Mortgage shall be void upon the payment,
when the same shall become due, of the Secured Obligations and the payment and
performance of all other covenants, agreements, obligations and liabilities
secured hereby.

         Mortgagor represents, warrants, covenants and agrees as follows:

         1.       WARRANTIES OF TITLE.
                  -------------------

                  Mortgagor warrants that Mortgagor has and owns good and
marketable fee simple title in and to the Land and the Improvements thereon and
has the right to mortgage the same; that Mortgagor owns the Fixtures on the Land
free and clear of all liens, claims or other encumbrances except as set forth in
Schedule B, Section 2 of the title insurance commitment issued by Lawyers Title
Insurance Corporation in connection with this Mortgage


                                        5
<PAGE>


(the "TITLE COMMITMENT"); and that this Mortgage is a valid and enforceable lien
on the Mortgaged Property of the Mortgagor, the covenants, restrictions,
reservations, conditions, and easements approved by the Mortgagee. Mortgagor
covenants that it shall (a) preserve such title and the validity and priority of
the lien hereof and shall forever warrant and defend the same to Mortgagee
against the claims of all and every person or persons, corporation or
corporations and parties whomsoever claiming or threatening to claim the same or
any part thereof, and (b) make, execute, acknowledge, and deliver all such
further or other mortgages, documents, instruments or assurances, and cause
other mortgages, documents, instruments or assurances, and cause to be done all
such further acts and things as may at any time hereafter be reasonably desired
or required by Mortgagee to fully protect the lien of this Mortgage.

         2.       PAYMENT OF SECURED OBLIGATIONS. Mortgagor shall pay the
Secured Obligations at the times and places and in the manner specified in the
relevant Secured Instrument Documents.

          3.      PROPER CARE AND USE.
                  -------------------

                  a.  Mortgagor shall:

                      (i)      not abandon the Mortgaged Property,

                      (ii)     maintain the Mortgaged Property and any future
abutting grounds, sidewalks, roads, parking and landscape areas in good repair,
order and condition, except as otherwise may be permitted pursuant to Subsection
3a(iii) hereof,

                      (iii)    keep all Improvements and all personal property
comprising the Mortgaged Property in good working order and condition, in the
ordinary course of business and in a manner consistent with the prior practice
of Mortgagor,

                      (iv)     not commit or suffer waste with respect to the
Mortgaged Property,

                      (v)      diligently pursue to completion, without
interruption (other than interruptions due to force majeure) and in a good and
workmanlike manner, any future Improvements constructed on the Land,

                      (vi)     not commit, suffer or permit any act to be done
in or upon the Mortgaged Property in violation of any law, ordinance or
regulation, PROVIDED, HOWEVER, that the Company may contest any such law,
ordinance or regulation in any reasonable manner which shall not, in the sole
opinion of the Mortgagee, adversely affect the Mortgagee's rights or the
priority of its lien on the Mortgaged Property,

                      (vii)    refrain from impairing or diminishing the value
or integrity of the Mortgaged Property or the security value of this Mortgage,


                                        6
<PAGE>


                      (viii)   not remove, demolish or in any material respect
alter any of the Improvements or Fixtures unless such Improvement or Fixture is
of a temporary nature (temporary meaning that it is an Improvement intended to
be removed within a year after its placement on the Land), the removal or
demolition would benefit the Mortgaged Property, the removal is of land fill
only for sale in the ordinary course of Mortgagor's business, or the removal or
demolition is not inconsistent with the Business Plan (as such term is defined
in the Secured Agreement), without the prior written consent of the Mortgagee,
which consent shall not be unreasonably withheld or delayed, PROVIDED, HOWEVER,
Mortgagor may without the necessity of any consent perform or cause to be
performed alterations to the Improvements and Fixtures which do not materially
impair the value of the Mortgaged Property and (a) are not inconsistent with the
Business Plan, or (b) do not cost more than $500,000 or, if the cost of such
alterations exceeds $500,000, the cost of which when added to the cost of other
alterations not requiring consent previously made during the calendar year in
which Mortgagor is making such alterations to the Mortgaged Property, does not
result in an aggregate cost in excess of $1,000,000. Failure by the Mortgagee to
deny any requested consent by Mortgagor pursuant to this clause (viii) within
thirty (30) days following the date such request is telecopied to and confirmed
received by Mortgagee shall be deemed to constitute a consent to such request by
the Mortgagee. For purposes of determining the cost of any alteration to the
Mortgaged Property, all aspects of the proposed alteration as a whole shall be
taken into account regardless of when made and by whom the work may be
performed,

                      (ix)     not make, install or permit to be made or
installed, any additions thereto if doing so will materially impair the value of
the Mortgaged Property, without the prior written consent of the Mortgagee, and

                      (x)      not make, suffer or permit any nuisance to exist
on any of the Real Estate.

                  b.  Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Mortgaged Property at reasonable times
upon written notice. When so requested by Mortgagor, Mortgagee and its
representatives shall be accompanied by Mortgagor or its representative. If an
Event of Default shall have occurred and be continuing, or in the event of an
emergency, Mortgagee and any persons authorized by Mortgagee, without any notice
and without escort (and without being obligated to do so) may enter or cause
entry to be made upon the Real Estate and repair and/or maintain the same as
Mortgagee may reasonably deem necessary or advisable, and may (without being
obligated to do so) make such expenditures and outlays of money as Mortgagee may
reasonably deem appropriate for the preservation of the Mortgaged Property. All
expenditures and outlays of money made by Mortgagee pursuant hereto shall be
secured hereby and shall be payable on demand together with interest at the
Default Rate (as such term is defined in the Secured Agreement).

         4.       HAZARDOUS MATERIALS. Except as otherwise disclosed in the
Secured Agreement or the Business Plan, Mortgagor represents, warrants and
covenants that to the best of its knowledge Mortgagor has not used Hazardous
Materials (as defined hereinafter) on, from, or affecting the Mortgaged Property
in any manner which violates Federal, state or local laws,


                                        7
<PAGE>


ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and that, to the best of Mortgagor's knowledge,
no prior owner of the Mortgaged Property or any tenant, subtenant, prior tenant
or prior subtenant have used Hazardous Materials on, from, affecting, or related
to the Mortgaged Property in any manner which violates Federal, state or local
laws, ordinances, rules, regulations or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials. Mortgagor shall use its best efforts to keep or
cause the Mortgaged Property to be kept free of Hazardous Materials. Without
limiting the foregoing, Mortgagor shall not cause or permit the Mortgaged
Property to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce or process Hazardous Materials, except in
compliance with all applicable Federal, state or local laws or regulations, nor
shall Mortgagor cause or permit, as a result of any intentional or unintentional
act or omission on the part of Mortgagor or any tenant or subtenant, a release
of Hazardous Materials onto the Mortgaged Property or onto any other property.
Mortgagor shall comply with and shall, by covenants in all future leases, seek
to ensure compliance by all tenants and subtenants with all applicable Federal,
state and local laws, ordinances, rules and regulations, whenever and by
whomever triggered, and shall obtain and comply with, and by covenants in all
future leases, seek to ensure that all tenants and subtenants obtain and comply
with, any and all approvals, registrations or permits required thereunder.
Mortgagor shall (a) conduct and complete all investigations, studies, sampling,
and testing, and all remedies, removal, and other actions necessary to clean up
and remove all Hazardous Materials on, from, or affecting the Mortgaged Property
(i) in accordance with all applicable Federal, state and local laws, ordinances,
rules, regulations and policies, and (ii) in accordance with the orders and
directives of all Federal, state, and local governmental authorities, and (b)
defend, indemnify, and hold harmless Mortgagee, Obligee and their respective
employees, agents, officers, and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses
of whatever kind or nature, known or unknown contingent or otherwise arising out
of, or in any way related to, (i) the presence, disposal, release, or threatened
release of any Hazardous Materials which are on, from, affecting, or related to
the soil, water, vegetation, buildings, personal property, persons, animals, of
or otherwise on, the Mortgaged Property; (ii) any personal injury (including
wrongful death) or property damage (real or personal arising out of or related
to such Hazardous Materials; (iii) any lawsuit brought or threatened, settlement
reached, or government order relating to such Hazardous Materials, and/or (iv)
any violation of any laws, orders, regulations, requirement, or demands of
Governmental Authorities, which are based upon or in any way related to such
Hazardous Materials including, without limitation, attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses;
provided, in any event, that the foregoing arises out of the Mortgaged Property.
In the event this Mortgage is foreclosed, or Mortgagor tenders a deed in lieu of
foreclosure, Mortgagor shall deliver the Mortgaged Property to Mortgagee free of
any and all Hazardous Materials so that the conditions of the Mortgaged Property
shall conform with all applicable Federal, state and local laws, ordinances,
rules or regulations affecting the Mortgaged Property. For purposes of this
Paragraph, "Hazardous Materials" includes, without limit, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
solvent mixtures, hazardous or toxic substances, or related materials defined in
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as


                                        8
<PAGE>


amended (42 U.S.C. Section 9601, et. seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1810 et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 9601, et seq.) and
in the regulations adopted and publications promulgated pursuant thereto, or any
other applicable Federal, state or local environmental law, ordinance, rule, or
regulation. The provisions of this paragraphs shall be in addition to any and
all other obligations and liabilities Mortgagor may have to Mortgagee and/or
Obligee, at common law, and shall survive the transactions contemplated herein.

         5.       COMPLIANCE. Mortgagor shall comply with any and all material
obligations affecting its Mortgaged Property which could adversely affect title
to, or the value of, the Mortgaged Property including, but not limited to, all
agreements, covenants, and restrictions of record. Mortgagor shall have the
right, at Mortgagor's sole cost and expense, to contest or object to any such
obligations of Mortgagor affecting the Mortgaged Property by appropriate legal
proceedings, but such right shall not be deemed or construed in any way as
relieving, modifying or extending Mortgagor's covenant to comply with such
obligations on a timely basis unless Mortgagor has given prior written notice to
Mortgagee of Mortgagor's intent so to contest or object to such obligations, and
unless (i) non-compliance with such obligations shall not under any
circumstances potentially subject Mortgagor to any criminal liability or to any
fine or monetary liability exceeding $25,000 to which effect Mortgagor shall
certify to Mortgagee at the time of Mortgagor's notice, and (ii) the legal
proceedings shall operate conclusively to prevent, prior to final determination
of such proceedings, (y) any loss or forfeiture of title to, or the imposition
of any lien upon, the Mortgaged Property, or any part thereof and (z) the
impairment of the validity, priority and enforceability of this Mortgage.
Mortgagor shall and do hereby agree to defend, save and hold Mortgagee harmless
from any loss and/or liability (including reasonable attorneys' fees and
disbursements) by reason of such non-compliance or contest, and Mortgagor shall
keep Mortgagee regularly advised in writing as to the status of such
proceedings.

         6.       REQUIREMENTS. Mortgagor, at Mortgagor's sole cost and expense,
shall promptly comply with, or cause to be complied with, and conform to all
present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations and requirements pertaining to the
Mortgaged Property, including any applicable environmental, zoning or building,
use and land use laws, ordinances, rules or regulations and all covenants,
restrictions and conditions now or hereafter of record, and shall keep in full
force and effect all permits which may be applicable to it or to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property (collectively, the "LEGAL REQUIREMENTS"). Mortgagor shall
have the right, at Mortgagor's sole cost and expense, to contest or object to
any Legal Requirements affecting the Mortgaged Property by appropriate legal
proceedings, but such right shall not be deemed or construed in any way as
relieving, modifying or extending Mortgagor's covenant to comply with any Legal
Requirements on a timely basis unless Mortgagor has given prior written notice
to Mortgagee of Mortgagor's intent so to contest or object to such Legal
Requirements and unless (i) non-compliance with such Legal Requirements shall
not under any circumstances potentially subject Mortgagor to any criminal
liability or to any fine or liability exceeding $25,000 to which effect
Mortgagor shall certify to Mortgagee at the time of Mortgagor's notice, and (ii)
the legal proceedings shall operate conclusively to prevent, prior to final
determination of such proceedings,


                                        9
<PAGE>


(y) any loss or forfeiture of title to, the imposition of any lien upon, or the
condemnation of, the Mortgaged Property, or any part thereof and (z) the
impairment of the validity, priority and enforceability of this Mortgage.
Mortgagor shall and does hereby agree to defend, save and hold Mortgagee
harmless from any loss and/or liability (including reasonable attorney's fees
and disbursements) by reason of such non-compliance or contest, and Mortgagor
shall keep Mortgagee regularly advised in writing as to the status of such
proceedings.

         7.       PAYMENT OF IMPOSITIONS.
                  ----------------------

                  a.  Mortgagor shall pay and discharge prior to delinquency
all taxes of every kind and nature (including, without limitation, all real and
personal property, income, franchise, withholding, profits and gross receipts
taxes), all charges for any easement or agreement maintained for the benefit of
any of the Mortgaged Property, all general and special assessments, levies,
permits, inspection and license fees, all water and sewer rents and charges and
all other public charges whether of a like or different nature, even if
unforeseen or extraordinary, imposed upon or assessed of or against Mortgagor or
any of the Mortgaged Property, together with any penalties or interest on any of
the foregoing (all of the foregoing are hereinafter collectively referred to as
the "IMPOSITIONS"). Mortgagor shall have the right, at Mortgagor's sole cost and
expense, to contest or object to the amount or validity of any such Imposition
by appropriate legal proceedings, but such right shall not be deemed or
construed in any way as relieving, modifying or extending Mortgagor's covenant
to pay any such Imposition at the time and in the manner provided in this
Article 7, unless Mortgagor has given prior written notice to Mortgagee of
Mortgagor's intent so to contest or object to an Imposition, and unless, (i)
legal proceedings shall operate conclusively to prevent the sale of the
Mortgaged Property, or any part thereof, to satisfy such Impositions prior to
final determination of such proceedings; or (ii) Mortgagor shall furnish a good
and sufficient bond or surety or other security reasonably satisfactory to
Mortgagee in the amount of the Impositions which are being contested plus any
interest and penalty which may be imposed thereon and which could become a lien
against the Mortgaged Property; or (iii) Mortgagor shall have provided a good
and sufficient undertaking as may be required or permitted by law to accomplish
a stay of such proceedings. Subject to the foregoing, and if Mortgagee shall so
request, within ten (10) days after the date when an Imposition is due and
payable, Mortgagor shall deliver to Mortgagee evidence acceptable to Mortgagee
showing the payment of such Imposition.

                  b.  Mortgagee shall have the right, after demand to Mortgagor,
to pay any Impositions after the date such Imposition shall have become due
(subject to Mortgagor's right to contest such Impositions as hereinbefore
provided), and to add to the Secured Obligations the amount so paid, together
with interest thereon from the date of such payment at Default Rate and nothing
herein contained shall affect such right and such remedy. Any sums paid by
Mortgagee in discharge of any Impositions shall be (i) a lien on the Real Estate
secured hereby prior to any right or title to, interest in, or claim upon the
Real Estate subordinate to the lien of this Mortgage, and (ii) payable on
demand.

                  c.  Following the occurrence of an Event of Default specified
in subsection (a) of Article 20 of this Mortgage or upon any failure on the part
of Mortgagor to pay any Imposition as and when required to be paid pursuant to
this Mortgage (subject to


                                       10
<PAGE>


applicable grace periods), Mortgagor, upon Mortgagee's request, shall hereafter
pay to Mortgagee, on a monthly basis, an amount equal to one-twelfth of the
annual Impositions reasonably estimated by Mortgagee so that Mortgagee shall
have sufficient funds to pay the Impositions on the first day of the month
preceding the month in which they become due. In such event Mortgagor further
agrees to cause all bills, statements or other documents relating to Impositions
to be sent or mailed directly to Mortgagee. Upon receipt of such bills,
statements or other documents, and providing Mortgagor has deposited sufficient
funds with Mortgagee pursuant to this Article 7, Mortgagee shall pay such
amounts as may be due thereunder out of the funds so deposited with Mortgagee.
If at any time and for any reason the funds deposited with Mortgagee are or will
be insufficient to pay such amounts as may then or subsequently be due,
Mortgagee shall notify Mortgagor and Mortgagor shall immediately deposit an
amount equal to such deficiency with Mortgagee. Notwithstanding the foregoing,
nothing contained herein shall cause Mortgagee to be deemed a trustee of said
funds or to be obligated to pay any amounts in excess of the amount of funds
deposited with Mortgagee pursuant to this Article 7. If amounts collected by
Mortgagee under this paragraph (c) exceed amounts necessary in order to pay
Impositions, Mortgagee may impound or reserve for future payment of Impositions
such portion of such excess payments as Mortgagee in its absolute reasonable
discretion may deem proper. Should Mortgagor fail to deposit with Mortgagee sums
sufficient to pay such Impositions in full at least thirty (30) days before
delinquency thereof, Mortgagee may, at Mortgagee's election, but without any
obligation so to do, advance any amounts required to make up any deficiency,
which advances, if any, shall be added to the Secured Obligations and shall be
secured hereby and shall be repayable to Mortgagee with interest at Default
Rate, as herein elsewhere provided, or at the option of Mortgagee the latter
may, without making any advance whatever, apply any sums held by it upon any
obligation of Mortgagor secured hereby.

          8.      INSURANCE.
                  ---------

                  a.  As to any portion of the Land improved with Improvements
having a value in excess of $500,000 (an "IMPROVED PARCEL"), Mortgagor shall,
(i) keep such Improved Parcel (A) insured against loss or damage by fire,
lightning, windstorm, tornado and by such other further and additional risks and
hazards as now are or hereafter may be covered by extended coverage and "all
risk" endorsements (flood and earthquake excepted), (B) insured against loss or
damage by any other risk commonly insured against by persons occupying or using
like properties in the locality in which the Improved Parcel is situate, (C) if
appropriate, insured by a policy of business interruption and/or loss of rental
insurance in amounts which shall be subject to review annually, and (D) insured
by a policy of boiler and machinery insurance covering pressure vessels, air
tanks, boilers, machinery, pressure piping, heating, air conditioning and
elevator equipment, provided that the Improvements on the Improved Parcel
contain equipment of such nature, and insurance against loss of occupancy or use
arising from the breakdown of such machinery, (ii) keep the Fixtures on such
Improved Parcel insured against loss or damage by fire, lightning, vandalism,
windstorm, tornado, malicious mischief, and theft and by such other further and
additional risks as now or hereafter may be covered by extended coverage and
"all risk" endorsements (flood and earthquake' excepted) and (iii) to the extent
the Land lies within an area identified by the Secretary of Housing and Urban
Development as an area having special flood hazards, keep the Real Estate
insured under a policy of flood insurance in an amount no less than the


                                       11
<PAGE>


maximum list of coverage available under the National Flood Insurance Act of
1968, as amended. In addition, Mortgagor shall obtain and maintain (A)
comprehensive public liability insurance on an occurrence basis (to the extent
available) against claims for personal injury including bodily injury, death or
property damage occurring on, in or about the Mortgaged Property and the
adjoining streets, sidewalks and passageways, such insurance to afford primary
coverage of not less than $10,000,000 combined single limit for personal injury
or death to one or more persons or damage to property and (B) workmen's
compensation insurance (including employer's liability insurance if requested by
Mortgagee) for all employees of Mortgagor engaged on or with respect to the
Mortgaged Property in such amounts as are required to be maintained by law, or
if no amounts are established by law, then in such amounts as are reasonably
satisfactory to Mortgagee. Each insurance policy (other than flood insurance
written under the National Flood Insurance Act of 1968, as amended, in which
case to the extent available) shall (i) be noncancelable (which term shall
include any reduction in the scope or limits of coverage) without at least
thirty days' prior written notice to Mortgagee or the maximum notice period then
available, whichever is shorter, (ii) except in the case of worker's
compensation and comprehensive public liability insurance, be endorsed to name
Mortgagee as its interest may appear, with loss payable to Mortgagee, without
contribution, under a standard mortgagee clause, (iii) in the case of public
liability insurance, provide for broad form coverage, including liquor liability
coverage, (iv) in the case of property insurance contain a satisfactory
"Replacement Cost Endorsement", (v) be written by Lloyds of London or by
companies having an Alfred M. Best Company, Inc. rating of A or higher and a
financial size category of not less than VII with respect to primary coverage
and (and A/XII with respect to excess coverage) unless waived in writing by
Mortgagee, and (vi) contain an endorsement or agreement by the insurer that any
loss shall be payable in accordance with the terms of such policy
notwithstanding any act or negligence of Mortgagor which might otherwise result
in forfeiture of said insurance and the further agreement of the insurer waiving
all rights of set-off, counterclaim, deduction or subrogation against Mortgagor.
If said insurance or any part thereof shall expire, be withdrawn, become void by
breach of any condition thereof by Mortgagor or otherwise, or if for any reason
said insurance shall become unsatisfactory, Mortgagor shall immediately obtain
new or additional insurance complying with the requirements of this Mortgage.
Mortgagor shall not take out any separate or additional insurance which is
contributing in the event of loss unless it is properly compatible with all
other insurance carried by it with respect to the Mortgaged Property.

                  b.  Mortgagor shall (i) pay as they become due all premiums
for such insurance, (ii) not later than twenty (20) days prior to the expiration
of each policy to be furnished pursuant to the provisions of this Article 7,
deliver a valid certificate of insurance, (or if such certificate is not then
available, a renewal binder) evidencing a renewed policy or policies marked
"premium paid," or accompanied by such other evidence of payment satisfactory to
Mortgagee with standard noncontributory mortgagee clauses in favor of, and
acceptable to, Mortgagee. Such certificate of insurance (or renewal binder)
shall be accompanied by a written statement of Mortgagor certifying that the
insurance coverage evidenced thereby complies with the requirements of this
Article 8.

                  c.  If Mortgagor shall be in default of its obligations to so
insure or deliver any such prepaid certificate or insurance or renewal binder
then Mortgagee, at Mortgagee's


                                       12
<PAGE>


option (without obligation to do so) and without prior notice, may effect such
insurance from year to year, and pay the premium or premiums therefor, and
following notice from Mortgagee that such insurance has been effected and paid
for, Mortgagor shall pay to Mortgagee such premium or premiums so paid by
Mortgagee with interest from the time of payment at Default Rate on demand, and
the same shall be deemed added to the Secured Obligations and shall be secured
by this Mortgage.

                  d.  Mortgagor promptly shall comply with and conform to (i)
all provisions of each such insurance policy and (ii) all requirements of the
insurers thereunder applicable to Mortgagor or to any of its Mortgaged Property
or to the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of any of this Mortgaged Property. If Mortgagor shall use
any of the Mortgaged Property in any manner which would permit the insurer to
cancel any insurance policy, Mortgagor immediately shall obtain a substitute
policy to be effective at or prior to the time of any such cancellation.

                  e.  If any Improvement on an Improved Parcel, or any portion
thereof, the value of which is $100,000 or less, shall be destroyed or damaged
by fire or any other casualty, whether insured or uninsured, and regardless of
any amount of proceeds of insurance which are available to Mortgagor, and
provided no Event of Default has occurred or is continuing, Mortgagor shall
elect whether to repair or replace such Improvement or any portion thereof;
provided, however, in the event Mortgagor elects not to repair or replace such
Improvement or portion thereof, the proceeds shall be applied by Mortgagee to
the Secured Obligations in whatever manner Mortgagee, in its sole discretion,
may determine. Mortgagor shall give immediate notice of any such destruction or
damage to Mortgagee who may make proof of loss if not promptly made by Mortgagor
and except as may otherwise be provided herein each insurance company concerned
is hereby authorized and directed to make payment for any loss directly to
Mortgagee. Mortgagee shall have the right, at its option, (but not the
obligation) to participate in the adjustment of any loss with any insurer or
insurers. The insurance proceeds or any part thereof received by Mortgagee, if
paid as a result of a damage or destruction in the amount of $100,000 or less,
shall be paid by Mortgagee to Mortgagor so long as no Event of Default has
occurred or is continuing. The insurance proceeds or any part thereof received
by Mortgagee, if paid as a result of a damage or destruction in an amount
greater than $100,000, may be applied by Mortgagee toward reimbursement of all
costs and expenses of Mortgagee in collecting such proceeds, and the balance
shall be applied in the following order: (i) first, to the payment of any
Secured Obligations or any other amount secured hereby which has become due
prior to the date application of the insurance proceeds has been made and
remains unpaid; (ii) next, to the restoration and repair of the affected
Improvement pursuant to the provisions of Article 9 of this Mortgage; and (iii)
finally, if conditions (i) and (ii) above have been satisfied and funds remain,
said balance shall be returned to Mortgagor.

                  f.  The property insurance required by this Mortgage may be
effected by blanket policies issued to Mortgagor covering the Mortgaged Property
and other properties (real and personal) owned or leased by Mortgagor, provided
that such policies otherwise comply with the provisions of this Mortgage and
allocate with respect to the Mortgaged Property the coverage specified form time
to time, without possibility of reduction or coinsurance by reason of, or damage
to, any other property (real or personal) named therein,


                                       13
<PAGE>


and if the insurance required by this Mortgage shall be effected by any such
blanket or umbrella policies, Mortgagor shall furnish to Mortgagee valid
certificates of insurance evidencing such policies, with schedules attached
thereto showing the amount of insurance afforded by such policies applicable to
the Mortgaged Property and a certification from Mortgagor to the effect that
such insurance coverage complies in all respects with the requirements of this
Mortgage.

                  g.  Any transfer of the Mortgaged Property by foreclosure or
deed in lieu of foreclosure shall transfer therewith all of Mortgagor's
interest, including any unearned premiums, in all insurance policies then in
force covering the Mortgaged Property, subject to all of the terms and
conditions of such policies.

                  h.  Following the occurrence of an Event of Default specified
in subsection (a) of Article 20 of this Mortgage or upon any failure on the part
of Mortgagor to pay any insurance premiums as and when required to be paid
pursuant to this Mortgage (subject to applicable grace periods), Mortgagor, upon
Mortgagee's request, shall thereafter pay to Mortgagee an amount equal to
one-twelfth of the estimated aggregate annual insurance premiums on all policies
of insurance required by this Mortgage on a specified date each month. Upon
Mortgagee's request, Mortgagor shall cause copies of all bills, statements or
other documents relating to the foregoing insurance premiums to be sent or
mailed directly to Mortgagee. Upon receipt of such bills, statements or other
documents by Mortgagee, and providing Mortgagor has deposited sufficient funds
with Mortgagee pursuant to this Article 8, Mortgagee shall pay such amounts as
may be due thereunder out of the funds so deposited with Mortgagee. If at any
time and for any reason the funds deposited with Mortgagee are or will be
insufficient to pay such amounts as may be or subsequently are due, Mortgagee
shall notify Mortgagor and Mortgagor shall immediately deposit an amount equal
to such deficiency with Mortgagee. Notwithstanding the foregoing, nothing
contained herein shall cause Mortgagee to be deemed a trustee of said funds or
to be obligated to pay any amounts in excess of the amount of funds deposited
with Mortgagee pursuant to this Article 8. Should Mortgagor fail to deposit with
Mortgagee sums sufficient to pay in full such insurance premiums at least thirty
(30) days before delinquency thereof, Mortgagee may, at Mortgagee's election,
but without any obligation so to do, advance any amounts required to make up the
deficiency, which advances, if any, with interest thereon at Default Rate, from
the date of advance thereof shall be secured hereby and shall be repaid to
Mortgagee on demand or at the option of Mortgagee the latter may, without making
any advance whatever, apply any sums held by it upon any obligation of Mortgagor
secured hereby.

                  i.  Any provision of this Article 8 to the contrary
notwithstanding, so long as no Event of Default shall have occurred and be
continuing, Mortgagor shall have the right to receive the proceeds from any
business interruption and/or loss of rentals insurance policy.

         9.       RESTORATION.
                  -----------

                  a.  Funds in excess of $100,000 made available by Mortgagee
to Mortgagor for restoration of any of the Mortgaged Property pursuant to the
provisions of


                                       14
<PAGE>


Article 8 hereof shall be disbursed by Mortgagor only in accordance with the
following conditions:

                      (i)      prior to the commencement of restoration, the
contracts, contractors, architects, plans and specifications for the restoration
shall have been approved by the Consulting Professional (as such term is defined
in subsection (c) of this Article 9), and the Consulting Professional shall have
the right to require an acceptable surety bond insuring satisfactory completion
of the restoration;

                      (ii)     at the time of any disbursement of the
restoration funds, (A) no Event of Default shall then exist, (B) no mechanics'
or materialmen's liens shall have been filed and remain undischarged, except
those bonded while being contested and those discharged by the disbursement of
the requested restoration funds and (C) a satisfactory continuation of title
insurance on the Real Estate shall be delivered to Mortgagee;

                      (iii)    disbursements shall be made monthly in an amount
not exceeding the cost of the work completed since the last disbursement, upon
receipt of a certificate from an architect approved to do the plans and
specifications;

                      (iv)     there shall, at all times, remain adequate funds
to complete the restoration so that the remaining amount of available proceeds
received from insurance and otherwise pursuant to paragraph (b) below equals or
exceeds the contracted cost of construction less the amount paid for work that
has been certified as having been completed;

                      (v)      such other reasonable conditions may be imposed
and as are customarily imposed by construction lenders for borrowers having a
similar financial position as then existing for the Mortgagor, including but not
limited to, the maintenance of a policy of builders risk insurance with
completed value and extended coverage endorsements and worker's compensation
coverage as shall be required by law; and

                      (vi)     any restoration funds remaining after the
application thereof in accordance with the provisions hereof shall be disbursed
to Mortgagor provided no Event of Default shall have occurred and then be
continuing.

                  b.  Mortgagor shall pay the cost of the restoration to the
extent that it exceeds the amount of insurance proceeds or condemnation proceeds
awarded. Mortgagor (i) shall evidence to Mortgagee a source of funds to pay for
such restoration, and (ii) agree to use said funds to complete restoration of
the Improvements. Any sum so added by Mortgagor which remains in the restoration
fund upon completion of restoration shall be refunded to Mortgagor.

                  c.  The administration of the restoration procedures set forth
in subsection (a) of this Article 9 shall be delegated by Mortgagee to, and
performed by, an independent bonded consulting professional experienced in the
administration of such procedures who shall be designated by Mortgagor and
approved by Mortgagee (the "CONSULTING PROFESSIONAL"). The failure by Mortgagee
to approve or disapprove any Consulting Professional proposed by Mortgagor
within fifteen (15) Business Days following


                                       15
<PAGE>


request for such a approval shall be deemed approved by Mortgagee. All fees,
costs and expenses of such Consulting Professional shall be borne and timely
paid by Mortgagor.

                  d.  In the event of any fire or casualty where the cost of
repair and restoration of the Mortgaged Property does not exceed $100,000 as
determined by Mortgagor's insurance carrier for the Improvements, the proceeds
of insurance shall be collected and applied by Mortgagor (rather than disbursed
by Mortgagee).

                  e.  In the event Mortgagor receives any condemnation award the
actual proceeds of which do not exceed $100,000, Mortgagor shall retain such
amount and use such amount to the extent necessary to repair and restore the
Mortgaged Property.

         10.      CONDEMNATION/EMINENT DOMAIN.
                  ---------------------------

                  a.  Immediately upon obtaining knowledge of the institution of
any proceedings of the condemnation of the Mortgaged Property, or any portion
thereof, Mortgagor will notify Mortgagee of the pendency of such proceedings.
Mortgagee may (but shall not be obligated to) participate in any such
proceedings and Mortgagor shall from time to time deliver to Mortgagee all
instruments requested by it to permit such participation. Mortgagor shall, at
its expense, diligently prosecute any such proceeding and shall consult with
Mortgagee, its attorneys and experts and cooperate with it in any defense of any
such proceedings. Except as otherwise expressly provided in paragraph (e) of
Article 9 above, all awards and proceeds of condemnation shall be assigned to
Mortgagee to be applied in the same manner as insurance proceeds, and Mortgagor
agrees to execute any such assignments of all such awards as Mortgagee may
request.

                  b.  After application of all awards and proceeds of
condemnation toward all practical repair and restoration of the Mortgaged
Property as directed by the Consulting Professional, any remaining funds shall
be applied as follows: (i) in the event that value and utility of the Mortgaged
Property shall have been substantially restored as determined by the Consulting
Professional, any remaining funds shall be returned to Mortgagor, or (ii) in the
event the value and utility of the Mortgaged Property shall not have been
substantially restored as determined by the Consulting Professional, any
remaining funds shall, at the option of Mortgagee, be applied in reduction of
the Secured Obligations.

         11.      HOMESTEAD EXEMPTIONS. Mortgagor hereby represents and declares
that the Mortgaged Property forms no part of any property owned, used or claimed
by Mortgagor as exempted from forced sale under the laws of the State of
Florida, and disclaims, waives and renounces all and every claim to exemption
under any homestead exemption law or other similar laws.

         12.      DISCHARGE OF LIENS, UTILITIES.
                  -----------------------------

                  a.  Mortgagor shall not, without the prior written consent of
the Obligee, create, consent to or suffer the creation of any liens, charges or
encumbrances, on any of the Mortgaged Property (each, a "PROHIBITED LIEN"),
whether or not such Prohibited Lien is subordinate to this Mortgage, except for
the Junior Mortgages as described in Article 41


                                       16
<PAGE>


hereof, and except as permitted by the Secured Agreement and those liens arising
by operation of law which secure obligations not yet due and payable, nor shall
Mortgagor fail to have any Prohibited Lien which may be imposed without
Mortgagor's consent discharged and satisfied of record within 10 days after it
is imposed, except those liens bonded while being contested. Mortgagor shall pay
prior to delinquency all lawful claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in, or permit the creation of
a Prohibited Lien, except that Mortgagor shall have the right to contest such
claims or demands, provided that Mortgagor shall furnish a good and sufficient
bond, surety or other security as requested by, and found satisfactory to,
Mortgagee.

                  b.  Mortgagor shall pay prior to delinquency all utility
charges which are incurred by it for gas, electricity, water or sewer services
to its Mortgaged Property and all other assessments or charges of a similar
nature, whether public or private and whether or not such taxes, assessments or
charges are liens on the Mortgaged Property.

         13.      BOOKS AND RECORDS. Mortgagor shall at all times keep and
maintain or cause to be kept and maintained records and books of account with
respect to its Mortgaged Property.

         14.      ESTOPPEL CERTIFICATES. Mortgagee and Mortgagor within 10 days
following written request, shall deliver to the requesting party, a written
statement, duly acknowledged, setting forth (i) the amount of the Obligations,
and (ii) that there exist no offsets, claims, counterclaims or defenses against
the Obligations or describe in detail the nature of any such offset, claim,
counterclaim or defense.

         15.      EXPENSES. Mortgagor shall pay, together with any interest or
penalties imposed in connection therewith, all expenses incident to the
preparation, execution, acknowledgement, delivery and/or recording of this
Mortgage, including all filing registration or recording fees and all federal,
state, county and municipal, internal revenue or other stamp taxes and other
taxes duties, imposts, assessments and charges now or hereafter required by the
federal, state, county or municipal government.

         16.      MORTGAGEE'S COSTS AND EXPENSES. Upon the occurrence of any
Event of Default or the exercise by Mortgagee of any of Mortgagee's rights
hereunder, or if any action or proceeding be commenced, to which action or
proceeding Mortgagee is or becomes party or in which it becomes necessary to
defend or uphold the lien of this Mortgage, or if the taking, holding or
servicing of this Mortgage by Mortgagee is alleged to subject Mortgagee to any
civil fine, or if Mortgagee's review and approval of any document is requested
by Mortgagor or required by Mortgagee, all reasonable costs, out-of-pocket
expenses and fees incurred by Mortgagee in connection therewith (including any
civil fines and reasonable attorneys' fees and disbursements) shall, on notice
and demand, be paid by Mortgagor, together with interest thereon from the date
of disbursement until paid at the Default Rate and shall be a lien on the
Mortgaged Property and shall be secured by this Mortgage; and, in any action to
foreclose this Mortgage, or to recover or collect the Secured Obligations, the
provisions of this Article 16 with respect to the recovery of costs,
disbursements and allowances shall prevail unaffected by the provisions of any
law with


                                       17
<PAGE>


respect to the same to the extent that the provisions of this Article 16 are not
inconsistent therewith or violative thereof.

         17.      MORTGAGEE'S RIGHT TO PERFORM. If any Event of Default shall
have occurred hereunder and be continuing, Mortgagee, without waiving or
releasing Mortgagor from any obligation or default under this Mortgage, may (but
shall be under no obligation to), at any time perform the same, and the cost
thereof, with interest at Default Rate, shall immediately be due from Mortgagor
to Mortgagee, and the same shall be a lien on the Mortgaged Property prior to
any right, title to, interest in, or claim upon, the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money by Mortgagee under this Article 17 shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee hereunder.

         18.      FURTHER ASSURANCES. Mortgagor and Mortgagee agree, upon demand
of the other, to promptly correct any defect, error or omission which may be
discovered in the contents of this Mortgage or in the execution or
acknowledgment hereof or in any other instrument executed in connection herewith
or in the execution or acknowledgment of such instrument, or do any act or
execute any additional documents (including, but not limited to, security
agreements on any Fixtures or personal property included or to be included in
the Mortgaged Property) as may be reasonably required by Mortgagee to confirm
the lien of this Mortgage.

         19.      ASSIGNMENT OF RENTS. All of the rents, royalties, issues,
profits, revenue, income and other benefits of the Mortgaged Property arising
from the use and enjoyment of all or any portion thereof or from any lease or
agreement pertaining thereto (the "RENTS AND PROFITS") are hereby absolutely and
unconditionally assigned, transferred, conveyed and set over to Mortgagee to be
applied by Mortgagee in payment of the principal and interest and all other sums
payable on the Obligations, and of all other sums payable under this Mortgage.
Until such time as an Event of Default shall have occurred, Mortgagor shall
collect and receive all Rents and Profits.

         20.      EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default by Mortgagor hereunder:

                  a.  the occurrence of any Event of Default under the
Instrument or the Secured Agreement (whether or not any Obligations or other
Secured Obligations shall be at the time outstanding under the Secured
Agreement, or the Instrument or the Secured Agreement shall have terminated for
other purposes) or the occurrence of any Event of Default under the Certificate
of Designation; or

                  b.  a failure to make payment of any sums required to be paid
to Mortgagee other than the Obligations pursuant to the terms of this Mortgage
within five days after the same shall become due hereunder; or

                  c.  if any default shall occur in the performance of any
covenant contained in this Mortgage not elsewhere specified in this Article 20
which shall continue for thirty (30) days after notice from Mortgagee or if such
default cannot be cured in such 30-day


                                       18
<PAGE>


period, such longer period as shall be necessary to cure such default, provided
that Mortgagor shall commence curing such default within such 30-day period and
thereafter shall prosecute such cure diligently to completion; or

                  d.  (i) if Mortgagor shall commence any case, proceeding or
other action (a) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (b) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or Mortgagor shall make a general assignment for
the benefit of its creditors, (ii) if there shall be commenced against Mortgagor
any case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days, (iii) if there shall be commenced against Mortgagor any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof, (iv) if Mortgagor shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii) or (iii) above, (v) if
Mortgagor shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due (provided that Mortgagor may
admit in writing that it is "insolvent" as such term is defined in, and for
purposes of, Section 108(a)(1)(8) of the Code); or (vi) Mortgagor shall cause to
be reinstated the Reorganization Proceedings, as such term is defined in the
Secured Agreement; or

                  e.  the occurrence of any default or event of default (and the
expiration of applicable grace periods) pursuant to any mortgage encumbering the
Mortgaged Property or any portion thereof, or pursuant to any note or other
evidence of indebtedness secured thereby.

         21.      DUE ON SALE. Except as otherwise expressly provided in the
Secured Agreement or Article 35 hereof, in the event that, without the prior
written consent of the Mortgagee, Mortgagor shall, either directly or
indirectly, convey, grant, assign or transfer all or any portion of its right,
title or interest in the Mortgaged Property, whether legal or equitable, by
outright sale, deed, installment sale contract, land contract, contract for
deed, option, lease option, leasehold interest, contract, or any other method of
conveyance of real property interests, to any person or entity, then in any such
event, Mortgagee shall have the right, at its sole option, to declare the entire
Secured Obligations, immediately due and payable. The foregoing notwithstanding,
Mortgagor shall have the right without Mortgagee's consent to sell worn and
obsolete Fixtures in conjunction with the replacement thereof in the ordinary
course of Mortgagor's business where (x) such replacements are in quantity and
of quality not less than that of the Fixtures being sold when originally new and
(y) title to the replacement Fixtures is owned by Mortgagor at the time of such
sale.


                                       19
<PAGE>


         22.      REMEDIES. Upon the occurrence of an Event of Default
hereunder, (y) if such event is an Event of Default specified in paragraph (d)
of Article 20 above, automatically the Secured Obligations and all amounts owing
under this Mortgage shall immediately become due and payable, and (z) if such
event is an Event of Default other than those specified in paragraph (d) of
Article 20 above, Mortgagee may in Mortgagee's sole discretion declare the
Secured Obligations and all amounts owing under this Mortgage to be immediately
due and payable without presentment, demand, protest or notice of any kind, and
Mortgagee may take such action, without notice or demand, as it deems advisable
to protect and enforce Mortgagee's rights in and to the Mortgaged Property,
including, but not limited to, the following actions:

                  a.  (i) To the extent permitted by law, the Mortgagee itself,
or by such officers or agents as it may appoint, may enter and take possession
of all 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; and Mortgagor will pay monthly in
advance to Mortgagee, on Mortgagee's entry into possession, or to any receiver
appointed to collect the rents, income and other benefits of the Mortgaged
Property and the businesses conducted thereon or thereat, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be in possession of Mortgagor, and upon default in any such
payment will vacate and surrender possession of such part of the Mortgaged
Property to Mortgagee or to such receiver and, in default thereof, Mortgagor may
be evicted by summary proceedings or otherwise.

                      (ii)     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, be secured by the lien of this Mortgage.

                      (iii)    Upon every such entering upon or taking of
possession, Mortgagee may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to time:

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

                               (B)   insure or keep the Mortgaged Property
insured;

                               (C)   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; and


                                       20
<PAGE>


                               (D)   enter into agreements with others to
exercise the powers herein granted Mortgagee, all as Mortgagee from time to time
may determine; and Mortgagee may collect and receive all the rents, income and
other benefits thereof, 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 interest, principal, and other
payments due and payable on the Obligations, or pursuant to this Mortgage, (2)
the deposits for taxes and assessments and insurance premiums due, (3) the cost
of insurance, taxes, assessments and other proper charges upon the Mortgaged
Property or any part thereof, (4) any sums due and payable on any approved prior
encumbrance; and (5) the compensation, expenses and disbursements of the agents,
attorneys and other representatives of Mortgagee.

                  b.  Institute an action of mortgage foreclosure, or take
action as the law may allow, at law or in equity, for enforcement of this
mortgage, and proceed there onto final judgment and execution of the entire
unpaid balance of the Obligations including costs of suit, interest and
reasonable attorneys' fees. In case of any sale of the Mortgaged Property by
virtue of judicial proceedings, the Mortgaged Property may be sold in one parcel
and as an entirety or in such parcels, manner or order as the Mortgagee, in its
sole discretion, may elect.

                  c.  Institute partial foreclosure proceedings with respect to
the portion of the Secured Obligations so in default, as if under a full
foreclosure, and without declaring the entire Secured Obligations due, PROVIDED
that if foreclosure sale is made because of default of a part of the Secured
Obligations, such sale may be made subject to the continuing lien of this
Mortgage for the unmatured part of the Secured Obligations; and it is agreed
that such sale pursuant to a partial foreclosure, if so made, shall not in any
manner affect the unmatured part of this Mortgage and the lien thereof shall
remain in full force and effect just as though no foreclosure sale had been made
under the provisions of this subsection. Notwithstanding the filing of any
partial foreclosure or entry of a decree of a sale therein, Mortgagee may elect
at any time prior to a foreclosure sale pursuant to such decree, to discontinue
such partial foreclosure and to accelerate the Secured Obligations by reason of
any uncured default or defaults upon which such partial foreclosure was
predicated or by reason of any other defaults, and proceed with full foreclosure
proceedings. It is further agreed that several foreclosure sales may be made
pursuant to partial foreclosures without exhausting the right of full or partial
foreclosure sale for any unmatured part of the Secured Obligations, it being the
purpose to provide for a partial foreclosure sale of any matured portion of the
Secured Obligations without exhausting the power to foreclose and to sell the
Mortgaged Property pursuant to any such partial foreclosure for any other part
of the Secured Obligations whether matured at the time or subsequently maturing;
and without exhausting any right of acceleration and full foreclosure.

                  d.  Appoint a receiver of the rents, issues and profits of the
Mortgaged Property and of the businesses conducted thereon and therefrom,
without the necessity of proving the depreciation or the inadequacy of the value
of the security or the insolvency of Mortgagor or any person who may be legally
or equitably liable to pay moneys secured hereby, and Mortgagor and each such
person waive such proof and hereby consent to the appointment of a receiver, to
enter upon and take possession of the Mortgaged Property and


                                       21
<PAGE>


to collect all rents, income and other benefits thereof and apply the same as
the court may direct and any such receiver shall be entitled to hold, store,
use, operate, manage and control the Mortgaged Property and conduct the business
thereof as would Mortgagee pursuant to paragraph a above. The expenses,
including receiver's fees, attorneys' fees, costs and agent's compensation,
incurred pursuant to the powers herein contained shall be secured by this
Mortgage. The right to enter and take possession of, and to manage and operate,
the Mortgaged Property and to collect all rents, income and other benefits
thereof, whether by a receiver or otherwise, shall be cumulative to any other
right or remedy hereunder or afforded by law and may be exercised concurrently
therewith or independently thereof. Mortgagee shall be liable to account only
for such rents, income and other benefits actually received by the Mortgagee,
whether received pursuant to this paragraph or paragraph a above.
Notwithstanding the appointment of any receiver or other custodian, Mortgagee
shall be entitled as pledgee to the possession and control of any cash,
deposits, or instruments at the time held by, or payable or deliverable under
the terms of this Mortgage to, Mortgagee.

                  e.  Institute an action for specific performance of any
covenant contained herein or in aid of the execution of any power herein
granted.

                  f.  Apply on account of the unpaid Secured Obligations and the
interest thereon or on account of any arrearages of interest thereon, or on
account of any balance due to the Mortgagee after a foreclosure sale of the
Mortgaged Property, or any part thereof, any unexpended moneys still retained by
the Mortgagee that were paid by Mortgagor to the Mortgagee pursuant to Article
7(c) or Article 8(h) hereof.

                  g.  Exercise any and all other rights and remedies granted
under this Mortgage or now or hereafter existing in equity, at law, by virtue of
statute or otherwise.

         23.      DISCONTINUANCE OF PROCEEDINGS. If Mortgagee has proceeded to
enforce any right under the Obligations or this Mortgage and such proceedings
have been discontinued or abandoned for any reason, then in every such case,
Mortgagor and Mortgagee will be restored to their former positions and the
rights, remedies and powers of Mortgagee will continue as if no such proceedings
had been taken.

         24.      SALE OF THE PROPERTIES; APPLICATION OF PROCEEDS. Subject to
the requirements of applicable law, the proceeds or avails of foreclosure sale
and all moneys received by Mortgagee pursuant to any right given or action taken
under the provisions of Article 22 of this Mortgage shall be applied as follows:

                  First:  To the payment of the costs and expenses of any such
sale or other enforcement proceedings in accordance with the terms hereof and of
any judicial proceeding wherein the same may be made, and in addition thereto,
all actual out-of-pocket expenses, advances, liabilities and sums made or
furnished or incurred by Mortgagee or the holder of the Obligations under this
Mortgage including, without limitation, attorneys fees and costs, and fees and
costs incurred by other professionals and consultants retained by Mortgagee,
together with interest at the Default Rate (or such lesser amount as may be the
maximum amount permitted by law), and all taxes, assessments or other charges in
connection with


                                       22
<PAGE>


such foreclosure, except any taxes, assessments or other charges subject to
which the Mortgaged Property shall have been sold;

                  Second: To the payment of the amount then due, owing or unpaid
upon the Obligations for principal and interest on such amount; and in case such
proceeds shall be insufficient to pay in full the whole amount so due and
unpaid, then first, to the payment of all amounts of interest at the time due
and payable on the Obligations, without preference or priority of any
installment of interest over any other installment of interest, and second, to
the payment of all amounts of principal without preference or priority of any
amount of principal over any other amount of principal, or any part of the
Secured Obligations over any other part of the Secured Obligations;

                  Third:  To the payment of any other sums required to be paid
by Mortgagor pursuant to any provision of this Mortgage; and

                  Fourth: To the payment of all other Secured Obligations; and

                  Fifth:  With payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same.

         25.      REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to enforce
payment and performance of the Secured Obligations or any obligations secured
hereby and to exercise all rights and powers under this Mortgage or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Secured Obligations and obligations may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, lien, assignment or
otherwise. Neither the acceptance of this Mortgage nor its enforcement, whether
by court action or pursuant to the power of sale or the powers herein contained,
shall prejudice or in any manner affect Mortgagee's right to realize upon or
enforce any other security now or hereafter held by Mortgagee it being agreed
that Mortgagee shall be entitled to enforce this Mortgage and any other security
now or hereafter held by Mortgagee in such order as it may in its absolute
discretion determine. No remedy herein conferred upon or reserved to Mortgagee
is intended to be exclusive of any other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. Every power or remedy
given to Mortgagee or to which Mortgagee may be otherwise entitled, may be
exercised concurrently or independently, from time to time and as often as may
be deemed expedient by Mortgagee.

         26.      EXTENSION, RELEASE, ETC. Without affecting the lien or charge
of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of all unpaid obligations,
Mortgagee may, subject to the Secured Agreement, from time to time and without
notice, agree to (i) extend the maturity or alter any of the terms of any such
obligation, (ii) grant other indulgences, (iii) release or reconvey, or cause to
be released or reconveyed at any time at Mortgagee's option any parcel, portion
or all of the Mortgaged Property, (iv) take or release any other or additional
security for any obligation herein mentioned, or (v) make compositions or other
arrangements with debtors in relation thereto.


                                       23
<PAGE>


         27.      WAIVER OF APPRAISEMENT, VALUATION. Mortgagor hereby waives, to
the full extent that it may lawfully do so, the benefit of all appraisement,
valuation, stay and extension laws now or hereafter in force and all rights of
marshalling of assets in the event of any sale of the Mortgaged Property, any
part thereof or any interest therein, and any court having jurisdiction to
foreclose the lien hereof may sell the Mortgaged Property (real or personal, or
both) as an entirety or in such parcels, lots, manner or order as the Mortgagee
in its sole discretion may elect.

         28.      SUCCESSOR MORTGAGOR. In the event ownership of the Mortgaged
Property or any portion thereof becomes vested in a person other than Mortgagor,
except as permitted by the Secured Agreement or Section 35 of this Mortgage,
Mortgagee may, without notice to the Mortgagor herein named, whether or not
Mortgagee has given written consent to such change in ownership, deal with such
successor or successors in interest with reference to this Mortgage and the
Secured Obligations, and in the same manner as with the Mortgagor herein named,
without in any way vitiating or discharging Mortgagor's liability hereunder or
under the Secured Obligations.

         29.      SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code. Notwithstanding the
filing of a financing statement covering any of the Mortgaged Property in the
records normally pertaining to personal property, all of the Mortgaged Property,
for all purposes and in all proceedings, legal or equitable, shall be regarded,
at Mortgagee's option (to the extent permitted by law), as part of the Real
Estate whether or not such item is physically attached to the Real Estate or
serial numbers are used for the better identification of certain items. The
mention in any such financing statement of any of the Mortgaged Property shall
never be construed as in any way derogating from or impairing this declaration
and hereby stated intention of the parties that such mention in the financing
statement is hereby declared to be for the protection of Mortgagee in the event
any court shall at any time hold that notice of Mortgagee's priority of interest
to be effective against any third party, including the federal government and
any authority or agency thereof, must be filed in the Uniform Commercial Code
records. Pursuant to the provision of the Uniform Commercial Code, Mortgagor
hereby authorizes Mortgagee, without the signature of Mortgagor, to execute and
file financing and continuation statements if Mortgagee shall determine, in its
sole discretion, that such are necessary or advisable in order to perfect its
security interest in the Fixtures covered by this Mortgage, and Mortgagor shall
pay to Mortgagee, on demand, any reasonable out-of-pocket expenses incurred by
Mortgagee in connection with the preparation, execution, and filing of such
statements that may be filed by Mortgagee.

         30.      INDEMNIFICATION; WAIVER OF CLAIM.
                  --------------------------------

                  a.  If Mortgagee is made a party defendant to any litigation,
mediation, arbitration, administrative or bankruptcy proceedings and any appeals
therefrom, concerning this Mortgage or the Mortgaged Property or any part
thereof or interest therein, or the occupancy thereof by Mortgagor, then
Mortgagor shall indemnify, defend and hold Mortgagee harmless from all liability
by reason of said action other than that arising solely from Mortgagee's own
willful misconduct or gross negligence, including reasonable


                                       24
<PAGE>


attorneys' fees and paralegals' fees and reasonable out-of-pocket expenses
incurred by Mortgagee in any such action, whether or not any such action is
prosecuted to judgment, including, without limitation reasonable attorneys' fees
and paralegals' fees and reasonable out-of-pocket expenses incurred in
connection with any such action. If Mortgagee commences an action against
Mortgagor to enforce any of the terms hereof or because of the breach by
Mortgagor of any of the terms hereof, or for the recovery of any sum secured
hereby, Mortgagor shall pay to Mortgagee reasonable attorneys' fees and
paralegals' fees and reasonable out-of-pocket expenses, including, without
limitation reasonable attorneys' fees and paralegals' fees and reasonable
out-of-pocket expenses incurred in connection with any litigation, mediation,
arbitration, administrative or bankruptcy proceedings and any appeals therefrom,
together with interest thereon at the rate provided in the Secured Agreement
from the date the same are paid by Mortgagee to the date of reimbursement by
Mortgagor, and the right to such reasonable attorneys' fees and paralegals' fees
and reasonable out-of-pocket expenses shall be deemed to have accrued on the
commencement of such action, and shall be enforceable whether or not such action
is prosecuted to judgment. If an Event of Default shall have occurred, Mortgagee
may engage an attorney or attorneys to protect its rights hereunder, and in the
event of such engagement, Mortgagor shall pay Mortgagee reasonable attorneys'
fees and paralegals' fees and reasonable out-of-pocket expenses incurred by
Mortgagee, whether or not an action is actually commenced against Mortgagor by
reason of breach, including, without limitation reasonable attorneys' and
paralegals' fees and reasonable out-of-pocket expenses incurred in connection
with any litigation, mediation, arbitration, administrative or bankruptcy
proceedings and any appeals therefrom.

                  b.  Mortgagor waives any and all right to claim or recover
against Mortgagee, its officers, employees, agents and representative, for loss
of or damage to Mortgagor, the Mortgaged Property, Mortgagor's property or the
property of others under Mortgagor's control from any cause whatsoever, except
for the willful misconduct or gross negligence of Mortgagee, its officers,
employees, agent or representatives.

                  c.  The obligations of Mortgagor in this Article 30 hereof
shall survive satisfaction of this Mortgage and the discharge of Mortgagor's
other obligations under this Mortgage, the Secured Agreement and the other
Secured Instrument Documents.

         31.      NO WAIVERS, ETC. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor;
Mortgagee may release, regardless of consideration and without the necessity for
any notice to, or consent by, the holder of any subordinate lien on the
Mortgaged Property, any part of the security held for the obligations secured by
this Mortgage without, as to the remainder of the security, in anywise impairing
or affecting the lien of this Mortgage or the priority of such a lien over any
subordinate lien. Mortgagee may resort for the payment of the Secured
Obligations secured by this Mortgage to any other security therefor held by
Mortgagee in such order and manner as Mortgagee may elect.


                                       25
<PAGE>


         32.      WAIVERS BY MORTGAGOR. Upon the happening and continuation of
an Event of Default hereunder, Mortgagor hereby waives, to the extent permitted
by applicable law, all errors and imperfections in any proceedings instituted by
Mortgagee under this Mortgage and all notices of any Event of Default (except as
may be provided for under the terms hereof or of the Secured Agreement) or of
Mortgagee's election to exercise or its actual exercise of any right, remedy or
recourse provided for under this Mortgage and Mortgagor shall not at any time
insist upon or plead, or in any manner whatever claim or take any benefit or
advantage of, any present or future statute, law, regulation or judicial
decision which (a) exempts any of the Mortgaged Property or any other property,
real or personal, or any part of the proceeds arising from any sale thereof from
attachment, levy or sale under execution, (b) provides for any stay of
execution, moratorium, marshalling of assets, exemption from civil process,
redemption, extension of time for payment or valuation or appraisement of any of
the Mortgaged Property, or (c) conflicts with any provision, covenant or term of
this Mortgage.

         33.      SURRENDER. Upon the occurrence of any Event of Default and
pending the exercise by Mortgagee or its agents or attorneys of its right to
exclude Mortgagor from all or any part of the Mortgaged Property, Mortgagor
agrees to vacate and surrender possession of the Mortgaged Property to Mortgagee
or to a receiver, if any, and in default thereof may be evicted by any summary
action or proceeding for the recovery of possession of premises for nonpayment
of rent, however designated.

         34.      NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing, and unless
otherwise expressly provided herein, shall be considered to have been duly given
or made when received by receipted hand delivery, or by facsimile or telecopy
transmission, receipt confirmed, addressed as follows, or to such other address
as may be hereafter notified by the respective parties thereto:

         The Mortgagor:        Atlantic Gulf Communities Corporation
                               2601 South Bayshore Drive
                               Miami, Florida 33133-5461
                               Attention:  John H. Fischer
                               Vice President
                               Telecopy: (305) 859-4623

                               Copy to:   Greenberg, Traurig, Hoffman,
                                          Lipoff, Rosen & Quentel, P.A.
                                          1221 Brickell Avenue
                                          Miami, Florida 33131
                                          Attn:  Matthew B. Gorson, Esq.

         The Mortgagee:        The Bank of New York
                               Towermarc Plaza, 2nd Floor
                               10161 Centurion Parkway
                               Jacksonville, Florida  32256
                               Attn:  Janalee R. Scott
                               Telecopy: (904) 645-1998


                                       26
<PAGE>


                               Copy to:   Apollo Real Estate Advisors II, L.P.
                                          1301 Avenue of the Americas
                                          New York, New York 10019
                                          Attn: Rick Koenigsberger
                                          Telecopy:  (212) 459-3301

                               Copy to:   Wachtell, Lipton, Rosen & Katz
                                          51 West 52nd Street
                                          New York, New York  10019
                                          Attn: Philip Mindlin, Esq.
                                          Telecopy:  (212) 403-2000

                               Copy to:   Carlton, Fields, Ward, Emmanuel, Smith
                                          & Cutler, P.A.
                                          Post Office Box 3239
                                          Tampa, Florida  33601
                                          Attn:  Paula McDonald Rhodes, Esq.
                                          Telecopy:  (813) 229-4133


provided, that any notice, request or demand to or upon Mortgagor pursuant to
Article 20 shall be effective two (2) days after being deposited in the mail,
postage prepaid, PROVIDED FURTHER, that in the case at any such notice, request
or demand to or upon Mortgagor pursuant to Article 20, Mortgagee shall use its
best efforts to notify Mortgagor concurrently with any notice by mail, by
telecopy transmission or hand delivery, it being agreed that the failure to give
any such notice, request or demand by telecopy transmission shall not have any
adverse effect upon the effectiveness of any such notice, request or demand
given by mail.

         35.      PARTIAL RELEASES. Mortgagee shall release parcels of the
Mortgaged Property or otherwise subordinate this Mortgage upon the terms and
conditions set forth in the Secured Agreement and whenever required pursuant to
the Intercreditor Agreement (as defined in Article 51). The Mortgagee shall
execute such partial releases, in form and substance satisfactory to Mortgagee,
prepared by Mortgagor at its expense. Parcels to be released need not be
contiguous to any of the parcels previously released from this Mortgage.
Mortgagee agrees that notwithstanding anything to the contrary contained herein,
the lien of this Mortgage is subordinate and inferior to the contract rights of
any purchaser of any lot in which the subject property has been platted, and
Mortgagee shall release any such lot from the lien and operation of this
Mortgage upon the sole condition that such purchaser has complied with the terms
and provisions of his purchase agreement with Mortgagor. Mortgagee further
agrees that in the event of default by Mortgagor, the aforesaid provisions of
this Article 35 shall survive the final judgment in the event this Mortgage is
foreclosed and shall be binding on any purchaser in a foreclosure sale. Such
releases from the lien hereof shall not affect the lien hereby granted as to the
remainder of the Mortgaged Property.

         36.      REACQUISITION OF RELEASED LOTS. The lien of this Mortgage
shall encumber, and the Mortgaged Property shall include, any and all portions
of the Mortgaged Property which may hereafter be released from the lien hereof
in connection with the sale of lots by


                                       27
<PAGE>


Mortgagor ("RELEASED LOTS") if such Released Lots are reacquired by Mortgagor at
any time prior to the satisfaction of this Mortgage in full.

         37.      DEVELOPMENT MATTERS. To the extent required by applicable law,
the Mortgagee, without incurring any obligation to file or record any
documentation and at Mortgagor's cost and expense, shall join in the execution
of subdivision plats, easements and declarations covering all or any part of the
Mortgaged Property and other documents with respect to which Mortgagee's joinder
is necessary for the development of the Mortgaged Property as contemplated in
the Business Plan, PROVIDED that such subdivision plats, easements, declarations
and other documents are in form and substance reasonably satisfactory to
Mortgagee and Mortgagor shall have complied in all respects with all applicable
provisions of law with respect thereto.

         38.      COUNTERPARTS. This Mortgage is being executed in multiple
counterparts, all of which shall for all purposes constitute one agreement
binding on all the parties hereto, in order to permit its being recorded
concurrently in all of the counties in which the Mortgaged Property is located.

         39.      FUTURE ADVANCES. This Mortgage shall secure not only the
Secured Obligations described hereinabove, but also such future or additional
advances as may be made by Obligee (including its successors and assigns) from
time to time, whether obligatory or at its option, for any purpose, provided
that all those advances are to be made within 20 years from the date of this
Mortgage or within such lesser period of time as may be provided hereafter by
law as a prerequisite for the sufficiency and actual notice or record notice of
the optional future or additional advances as against the rights of creditors or
subsequent purchases for valuable consideration. The total amount of the Secured
Obligations secured by this Mortgage may decrease or increase from time to time
but the total unpaid indebtedness (exclusive of any interest and expenses
included as part of the Secured Obligations) as secured at any one time by this
Mortgage shall not exceed the maximum principal amount of ONE HUNDRED MILLION
AND NO/100 DOLLARS ($100,000,000.00), plus interest, and any disbursements made
for the payment of taxes, levies, or insurance on the property covered by the
lien of this Mortgage with interest on those disbursements. It shall be a
default hereunder if Mortgagor shall file for record a notice limiting the
maximum principal amount which may be secured by this Mortgage if the effect of
the filing of such notice would in any way prohibit Mortgagee from making future
advances to be secured by this Mortgage in the full amount hereinabove set
forth.

         40.      TAXES ON MORTGAGEE.
                  ------------------

                  a.  If any Governmental Authority shall levy, assess, or
charge any tax, assessment or imposition upon this Mortgage, the Secured
Obligations, the interest of Mortgagee in the Mortgaged Property, or Mortgagee
by reason of or as holder of any of the foregoing, Mortgagor shall pay (or
provide funds to Mortgagee for such payment), to the extent required in the
Secured Agreement, all such taxes, assessment and impositions to, for, or on
account of Mortgagee (other than federal, state or local income taxes of
Mortgagee or franchise taxes imposed on the Mortgagee or the holder of the
Obligations assessed other than on the basis of Mortgagee's or such holder's
holding this Mortgage) as they become due


                                       28
<PAGE>


and payable and on demand shall furnish proof of such payment to Mortgagee. In
the event of passage of any law or regulation permitting, authorizing or
requiring the tax, assessment or imposition to be levied, assessed or charged,
which law or regulation prohibits Mortgagor from paying the tax, assessment or
imposition to or for Mortgagee (and from providing funds to the Mortgagee to pay
any such tax, assessment or imposition), or which shall make such payment by
Mortgagor result in the imposition of interest exceeding the maximum permitted
by law, then, unless the affected portion of the Mortgaged Property is released
from the lien of this Mortgage pursuant to the terms hereof and of the Secured
Agreement, Mortgagee may declare the Secured Obligations secured hereby
immediately due and payable.

                  b.  In the event of the passage after the date of this
Mortgage of any law of the jurisdiction in which the Real Estate is located
deducting from the value of the Real Estate for the purposes of taxation any
lien thereon or changing in any way the laws for the taxation of mortgages or
debts secured by mortgages for state or local purposes or the manner of the
collection of any such taxes and imposing a tax, either directly or indirectly,
on this Mortgage or any Secured Instrument Document, as defined in the Secured
Agreement, Mortgagee shall have the right to declare all sums outstanding
secured by this Mortgage immediately due and payable, provided, however, that
such election shall be ineffective if (i) Mortgagor is exempt from such tax or,
if not exempt from such tax, is permitted by law to pay the whole of such tax
(or to provide funds to Mortgagee to pay such taxes) in addition to all other
payments required hereunder and if Mortgagor pays such tax (or provides funds to
Mortgagee to pay such tax) when the same is due and payable and agrees in
writing to pay such tax when the same is due and payable and agrees in writing
to pay such tax when thereafter levied or assessed against the Real Estate; or
(ii) the affected portion of the Mortgaged Property is released from the lien of
this Mortgage in accordance with the terms hereof and of the Secured Agreement.

         41.      JUNIOR MORTGAGES; NOTICES. Mortgagor agrees to forward to
Mortgagee copies of all correspondence to or from the holder of all junior
mortgages promptly after mailing or receiving same, either constituting notices
of a material default thereunder or relating to payment of principal and/or
interest in respect of all junior mortgages.

         42.      NO MODIFICATION; BINDING OBLIGATIONS. This Mortgage may not be
modified, amended, discharged or waived in whole or in part except by an
agreement in writing signed by the party against whom enforcement of any such
modification, amendment, discharge or waiver is sought. The covenants of this
Mortgage shall run with the land and bind Mortgagor, the heirs, distributees,
personal representatives, successors and assigns of Mortgagor, and all present
and subsequent encumbrancers, lessees and sublessees of any of the Mortgaged
Property, and shall inure to the benefit of Mortgagee and its successors,
assigns and endorsees.

         43.      MISCELLANEOUS. As used in this Mortgage, the singular shall
include the plural as the context requires and the following words and phrases
shall have the following meanings: (a) "including" shall mean "including but not
limited to"; (b) "provisions" shall mean "provisions, terms, covenants and/or
conditions"; (c) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage and/or deed of trust"; (d) "obligation" shall mean
"obligation, duty, covenant and/or condition"; and (e) "any of the Mortgaged
Property" shall


                                       29
<PAGE>


mean "the Mortgaged Property or any part thereof or interest therein."
Capitalized terms not defined herein shall have the meanings give them in the
Secured Agreement. Any act which Mortgagee is permitted to perform hereunder may
be performed at any time and from time to time by Mortgagee or any person or
entity designated by Mortgagee. Any act which is prohibited to Mortgagor
hereunder is also prohibited to all lessees of any of the Mortgaged Property.
Each appointment of Mortgagee as attorney-in-fact for Mortgagor under the
Mortgage is irrevocable and coupled with an interest.

         44.      CAPTIONS. The captions or headings at the beginning of each
Article hereof are for the convenience of the parties and are not a part of this
Mortgage.

         45.      SUCCESSORS AND ASSIGNS. The covenants contained herein shall
run with the land and bind Mortgagor, its successors and assigns, and all
subsequent owners, encumbrances and tenants of the Mortgaged Property, and shall
inure to the benefit of the Mortgagee.

         46.      ENFORCEABILITY. The validity and enforceability of this
Mortgage shall be construed and interpreted according to the laws of the State
of Florida; provided, however, that nothing in this Section shall be construed
to affect in any way the intent of the parties that the Instrument and the
Secured Agreement, and the rights and obligations of the parties thereto and
thereunder, shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York where the Instrument, this Mortgage, the
Secured Agreement and the other Secured Instrument Documents were negotiated and
the payment of amounts due in respect of the Secured Obligations shall be made
and rendered to Mortgagee.

         47.      SEVERABILITY. Whenever possible, each provision of this
Mortgage shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Mortgage shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remaining provisions
of this Mortgage.

         48.      AUTHORITY OF MORTGAGEE. The rights and responsibilities of
Mortgagee under this Mortgage with respect to any action taken by Mortgagee or
the exercise or non-exercise by Mortgagee of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Mortgage shall, as among Mortgagee and Obligee, be governed by the
Secured Agreement, and by such other agreements with respect thereto as may
exist from time to time among them, but, as among Mortgagee and Mortgagor,
Mortgagee shall be conclusively presumed to be acting as agent for the holder of
the Obligations with full and valid authority so to act or refrain from acting,
and Mortgagor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.

         49.      RECEIPT OF COPY. Mortgagor acknowledges that it has received a
true copy of this Mortgage.

         50.      SUBORDINATION AND ADDITIONAL PARTIAL RELEASE OF MORTGAGE
LIENS. Mortgagee shall release or subordinate parcels of the Mortgaged Property
from the lien of this Mortgage upon the terms and conditions set forth in the
Secured Agreement pursuant to partial releases


                                       30
<PAGE>


or subordinations, in form and substance satisfactory to Mortgagee, prepared by
Mortgagor at its expense.

         51.      INTERCREDITOR AGREEMENT. All of the Mortgaged Property is
subject to other mortgages given to other lenders and more particularly
identified in Schedule 1 attached hereto (the "JUNIOR MORTGAGES"). The relative
priority of the mortgages is governed by the terms and provisions of that
certain Intercreditor Agreement ("INTERCREDITOR AGREEMENT"), pursuant to the
terms of which Obligee has agreed to permit, and consents to, the placing of
mortgage liens upon the Land and all Improvements, Fixtures and tangible
personal property located thereon or used in connection therewith to secure
certain obligations of the Company as more particularly described in, and
subject to the terms and conditions of, the Intercreditor Agreement. The terms
of this Mortgage are subject to the terms and provisions of the Intercreditor
Agreement.

         IN WITNESS WHEREOF, Mortgagor has executed this Mortgage and Security
Agreement effective as of the date first set forth above.

Witnesses:                                MORTGAGOR:

                                          WEST BAY CLUB DEVELOPMENT CORPORATION,
                                          a Florida corporation,
                                          formerly known as Estero Pointe
                                          Development Corporation

------------------------------------
Signature                                      (Corporate Seal)

------------------------------------
Printed Name
                                      By:
                                         ---------------------------------------
                                               John H. Fischer
------------------------------------           Vice President
Signature

------------------------------------
Printed Name                         Address:
                                              2601 South Bayshore Drive
                                              Miami, Florida 33133-5461


                                       31
<PAGE>


STATE OF FLORIDA
COUNTY OF HILLSBOROUGH

         The foregoing instrument was acknowledged before me this ___ day of
June, 1997, by John H. Fischer, as Vice President of WEST BAY CLUB DEVELOPMENT
CORPORATION, a Florida corporation, formerly known as Estero Pointe Development
Corporation, behalf of the corporation, who is personally known to me or has
produced a Florida driver's license number F260-468-57-430-0 as identification.




                                               ---------------------------------
                                               NOTARY PUBLIC
                                               Name:
                                                    ----------------------------
                                               Serial #:
                                                        ------------------------
                                               My Commission Expires:


                                       32

<PAGE>


                                    EXHIBIT A

                                     (Land)




<PAGE>


                                   SCHEDULE 1
                                   ----------


         1.       That certain Junior Mortgage and Security Agreement (Revolving
Loan) dated of even date herewith, executed by Mortgagors to and for the benefit
of The Bank of New York, as collateral agent for the Banks, as defined therein,
and

         2.       That certain Junior Mortgage and Security Agreement (Secured
Floating Rate) dated of even date herewith, executed by Mortgagors to and for
the benefit of The Bank of New York, as collateral agent for the Banks, as
defined therein, both of which are recorded immediately subsequent to this
Mortgage.