Document:

Prepared by and return to:

Connie B. Hyde, Esq.
Gorsuch Kirgis LLP
Tower I, Suite 1000
1515 Arapahoe Street
Denver, CO   80202

                          MORTGAGE, SECURITY AGREEMENT,
                        FINANCING STATEMENT AND ABSOLUTE
                        ASSIGNMENT OF RENTS AND REVENUES
                               (Florida Property)

         THIS MORTGAGE,  SECURITY AGREEMENT,  FINANCING STATEMENT,  AND ABSOLUTE
ASSIGNMENT OF RENTS AND REVENUES  (this  "Mortgage") is given as of the 7 day of
April, 2000, by the Mortgagor named below to the Mortgagee named below.

                                   ARTICLE I
                       PARTIES, PROPERTY, AND DEFINITIONS

         The following terms and references shall have the meanings indicated:

         1.1 Mortgagor: COMMUNITY SAVANNA CLUB JOINT VENTURE, a Delaware general
partnership, whose legal address is 3410 South Galena Street, Suite 210, Denver,
Colorado  80231,  together  with any future  owner of the  Property  or any part
thereof or interest therein.

         1.2 Mortgagee: U. S. BANK NATIONAL ASSOCIATION,  whose legal address is
918 Seventeenth Street, Fifth Floor, Denver,  Colorado 80202,  together with any
legal holder of the Note.

         1.3 Note:  The  Promissory  Note of even  date  herewith,  executed  by
Mortgagor,  Asset  Investors  Operating  Partnership,  L.P., a Delaware  limited
partnership ("Operating Partnership"), and AIOP Lost Dutchman Notes, L.L.C., a

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THIS  MORTGAGE  EVIDENCES A  MULTI-STATE  LOAN WHICH IS SECURED BY REAL PROPERTY
LOCATED  OUTSIDE THE STATE OF FLORIDA  AND REAL  PROPERTY  LOCATED IN ST.  LUCIE
COUNTY,  FLORIDA.  FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $32,200.00 AND
FLORIDA  NON-RECURRING  INTANGIBLE  PERSONAL  PROPERTY  TAX  IN  THE  AMOUNT  OF
$10,974.00 ARE BEING PAID UPON RECORDING OF THIS  MORTGAGE.  ATTACHED  HERETO AS
EXHIBIT C IS A DESCRIPTION OF THE CALCULATION OF LIABILITY FOR DOCUMENTARY STAMP
TAX AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY TAX.

<PAGE>

Delaware  limited  liability  company  ("AIOP  Notes"),  payable to the order of
Mortgagee in the principal face amount of $15,000,000.00, the last payment under
which is due on May 31, 2001,  unless such due date is extended or  accelerated,
together with all renewals, extensions, and modifications of the Note. All terms
and provisions of the Note are incorporated by this reference in this Mortgage.

         1.4 Loan Agreement:  The Line of Credit Agreement ("Loan Agreement") of
even date herewith  executed by Mortgagor,  Operating  Partnership,  AIOP Notes,
AIOP Florida  Properties I, L.L.C., a Delaware limited liability  company,  AIOP
Florida  Properties  II,  L.L.C.,  a Delaware  limited  liability  company,  the
Mortgagee,  and  all  renewals,   extensions,  and  modifications  of  the  Loan
Agreement.  All  capitalized  terms not otherwise  defined herein shall bear the
meaning given to them in the Loan Agreement.

         1.5 Real Property:  The real property  described in Exhibit A, attached
hereto and by this reference incorporated herein, together with all right, title
and interest of Mortgagor in the  following  with respect to the real  property,
whether now owned or hereafter acquired by Mortgagor:

             (a) All improvements now or hereafter located on such real property
(excluding  manufactured  homes  and  setups  owned  by third  parties)  and all
easements and appurtenances thereto;

             (b) The land lying within any street or roadway  adjoining the real
property;  any vacated or hereafter  vacated street or alley  adjoining the real
property; and any strips and gores adjoining the real property;

             (c) All and singular the passages,  waters,  water rights  (whether
tributary  or  non-tributary  or not  non-tributary),  water  courses,  riparian
rights, wells, well permits, water stock, other rights, liberties and privileges
thereof  or in any way  now or  hereafter  appertaining  to the  real  property,
including  homestead  and any other  claim at law or in  equity,  as well as any
after acquired title, franchise or license, and the reversion and reversions and
remainder and remainders thereof;

             (d)  All  of  the  rents,  royalties,  income  (including,  without
limitation,  operating income),  receipts,  revenues, issues, and profits of and
from the use,  operation,  or enjoyment of such real  property and  improvements
(collectively, the "Income"), whether such Income is attributable to the period,
or is collected, prior to or subsequent to any default by Mortgagor;

             (e)  All  machinery,   apparatus,   equipment,  fittings,  fixtures
(whether actually or constructively attached or incorporated,  and including all
trade,  domestic,  and ornamental fixtures, but excluding manufactured homes and
setups owned by third parties) now or hereafter  located in, upon, or under such
real property or improvements  and used or usable in connection with any present

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or future operation thereof, including but not limited to all lighting, utility,
and power equipment;  engines;  pipes; pumps; tanks; motors;  conduits;  utility
systems,  plumbing,  lifting,  cleaning,  fire prevention,  fire  extinguishing,
signage,  heating,  air-conditioning;  communication  apparatus;  water heaters;
ranges; furnaces; appliances,  refrigerators,  stoves; shades, awnings, screens,
storm doors and windows;  attached cabinets; rugs, carpets and draperies and all
additions thereto and replacements therefor;

             (f) All other and greater  rights and  interests of every nature in
such property and in the possession or use thereof and income therefrom, whether
now owned or subsequently acquired by Mortgagor.

         1.6 Tangible Personalty: All right, title and interest of the Mortgagor
in and to the  following  with respect to the Real  Property:  All goods,  trade
fixtures, fixtures,  inventory,  furnishings,  fittings,  machinery,  apparatus,
equipment,  building and other materials,  supplies, and other tangible personal
property of every nature now owned or hereafter  acquired by Mortgagor and used,
intended  for use,  or  reasonably  required in the  development,  construction,
reconstruction,  alteration,  repair,  or  operation  of the  Property  and  any
improvements or  infrastructure  located  thereon,  together with all accessions
thereto,   replacements  and  substitutions   therefor,  and  proceeds  thereof,
including,  without  limitation,  to the extent  not deemed to be real  property
under this Mortgage,  all apparatus,  machinery,  motors,  elevators,  fittings,
equipment, and other furnishings and all plumbing,  heating, lighting,  cooking,
laundry,   ventilating,   refrigerating,   incinerating,   air-conditioning  and
sprinkler  equipment and fixtures and appurtenances  thereto,  all clubhouse and
swimming pool  equipment,  lockers,  lifeguard  equipment,  lawn or deck chairs,
towels,  swimming  pool cleaning and  maintenance  equipment,  recreational  and
fitness  equipment,  including  but not limited to rowing  machines,  stationery
bikes, nautilus equipment and appurtenances thereto..

         1.7  Intangible  Personalty:  All  right,  title  and  interest  of the
Mortgagor in and to the following with respect to the Real Property:

             (a)  All  of  the  rents,  royalties,  income  (including,  without
limitation,  operating income),  receipts,  revenues, issues, and profits of and
from the use,  operation,  or enjoyment of such real  property and  improvements
(collectively, the "Income"), whether such Income is attributable to the period,
or is  collected,  prior to or  subsequent  to any default by Mortgagor  and all
causes of action associated with the collection of such Income;

             (b)  All  of  the   licenses,   permits,   franchises,   and  other
entitlements  to use and all rights  thereto  which have been issued by or which
are pending  before any  governmental  or  quasi-governmental  agency  which are
necessary or appropriate for the Property;

             (c) All accounts,  accounts  receivable,  deposit accounts,  escrow
accounts, monies, claims, causes of action, rights to payment, prepaid insurance

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and other  prepaid  items,  contracts,  contract  rights,  refunds and  rebates,
maintenance contracts,  maintenance warranties,  continuing agreements,  general
intangibles associated with the Property and insurance proceeds;

             (d) All water taps, sewer taps, building permits, curb cut permits,
storm water discharge permits, refunds, rebates or deposits due or to become due
from any utility companies or governmental  entity,  agency,  authority,  board,
commission,  or governing  body  authorized  by federal,  state or local laws or
regulations as having jurisdiction over the real property; and

             (e) The absolute  right to  Mortgagor's  interest in any trade name
used by Mortgagor in connection with the Property and all of Mortgagor's  rights
in and to contract rights, leases, concessions, trade names, trademarks, service
marks,  logos,  operating  systems,  trade  secrets,  technology  and  technical
information,  copyrights,  warranties, licenses, plans, drawings and other items
of intangible  personal  property  relating to the ownership or operation of the
Property.

             (f) All plans and  specifications  for the improvements on the real
property;  soil,  environmental,  engineering,  land planning maps,  surveys and
other  studies  and reports  concerning  the real  property or prepared  for the
orderly  planning and  development  of the real  property,  including all plans,
drawings and studies concerning the platting or replatting of the real property;
all  contracts  and  subcontracts  relating  to the  improvements  on  the  real
property, or any thereof;

             (g) All awards and payments,  including interest thereon, resulting
from the exercise of any right of eminent  domain or any other public or private
taking of,  casualty or injury to, or decrease in the value of, any of such real
property, including without limitation all property insurance payments, proceeds
and policies related to such real property.

         1.8  Property:  The Real  Property,  the  Tangible  Personalty  and the
Intangible  Personalty are sometimes  collectively  called the "Property." It is
specifically  understood  that the  enumeration of any specific  articles of the
Property,  including Tangible  Personalty and Intangible  Personalty shall in no
wise  exclude  or be held to  exclude  any items of  property  not  specifically
mentioned.  All  of  the  Real  Property,  Tangible  Personalty  and  Intangible
Personalty,  whether  affixed or annexed or not, and all rights hereby  conveyed
and mortgaged are intended to be as a unit and are hereby  understood and agreed
and declared to be appropriated to the use of the real estate, and shall for the
purposes of this Mortgage be deemed to be real estate and conveyed and mortgaged
hereby.

             (a)  all  of  Mortgagor's   rights  and  prerogatives   arising  in
connection  with or by  virtue  of  Mortgagor's  ownership  of lots in the  real
property including, without limitation, the right to vote as a member of any lot
owners'  association and all rights arising under any  declaration  described in
Exhibit  B  and  under  the  articles  of  incorporation   and  bylaws  of  such
association;

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             (b) all other and greater  rights and  interests of every nature in
such property and in the possession or use thereof and income therefrom, whether
now owned or subsequently acquired by Mortgagor.

         1.9 The Secured Obligations:  The Property is granted and shall be held
for the purpose of securing the following:

             (a) The payment of the indebtedness as evidenced in the Note;

             (b)  The  performance  and  observance  of  all  terms,  covenants,
conditions, and provisions to be performed or observed by the Mortgagor pursuant
to the terms of

                  (i) this Mortgage,

                  (ii) the Security Agreement, executed by Mortgagor,

                  (iii)  the  Environmental   Indemnity  Agreement  executed  by
Mortgagor in favor of Mortgagee (the "EIA");

                  (iv)  UCC-1  financing  statements  required  to  perfect  the
Mortgagee's   security  interest  in  the  Tangible  Personalty  and  Intangible
Personalty  as granted by this Mortgage and the Security  Agreement  ("Financing
Statement"),

                  (v) the Loan Agreement, and

                  (vi) any and all  pledge or other  security  agreements,  loan
agreements,  disbursement agreements, supplemental agreements, assignments (both
present and collateral),  side letters, as the same may be amended,  modified or
supplemented  from time to time,  being  referred  to  hereinafter  as  "Related
Agreements."

The Note, this Mortgage, Security Agreement, Financing Statement,  Environmental
Indemnity,  Related Agreements,  Loan Agreement, and any and all other documents
or instruments  executed in connection  with the foregoing to evidence or secure
the Note shall be hereinafter collectively called the "Loan Documents".

             (c) The  payment of all sums  expended  or  advanced  by  Mortgagee
pursuant to the terms hereof.

             (d)  Payment  and  performance  of all  Future  Advances  and other
obligations  that the then record owner of all or part of the Property may agree
to pay and/or  perform  (whether  as  principal,  surety or  guarantor)  for the
benefit of Mortgagee,  when such future  advance or obligation is evidenced by a
writing which recites that it is secured by this Mortgage.

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             (e)  All  modifications,  extensions  and  renewals  of  any of the
obligations secured hereby,  however evidenced,  including,  without limitation:
(i)  modifications of the required  principal  payment dates or interest payment
dates or both,  as the case may be,  deferring  or  accelerating  payment  dates
wholly or partly; or (ii)  modifications,  extensions or renewals at a different
rate  of  interest  whether  or not in the  case of a  note,  the  modification,
extension  or renewal is  evidenced by a new or  additional  promissory  note or
notes.

Any capitalized  terms not otherwise defined in Sections 1.5 through 1.7 of this
Mortgage and not defined in the Loan Agreement,  shall bear the meaning given to
them in Article 9 of the UCC.

         1.10 Future Advances. It is agreed that this Mortgage shall also secure
such future or additional advances as may be made by the Mortgagee at its option
to the Mortgagor, or its successor in title, for any purpose,  provided that all
those  advances  are to be  made  within  twenty  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 of actual notice or record notice of
the optional future or additional advances as against the rights of creditors or
subsequent   purchasers  for  valuable   consideration.   The  total  amount  of
indebtedness  secured by this  Mortgage  may  decrease or increase  from time to
time,  but the total unpaid  balance so secured at any one time shall not exceed
the  maximum  principal  amount  of  $30,000,000.00,   plus  interest,  and  any
disbursements made for the payment of taxes, levies or insurance on the Premises
with interest on those  disbursements.  If, pursuant to Florida Statutes Section
697.04, Mortgagor files a notice specifying the dollar limit beyond which future
advances made  pursuant to this  Mortgage will not be secured by this  Mortgage,
then Mortgagor shall, within one day of filing such notice,  notify Mortgagee by
certified  mail pursuant to Section 9.7. of this Mortgage.  In addition,  such a
filing shall constitute a default hereunder.

         1.11 Address:  The address of the Property (if known) is: 8630 South US
#1, Port St. Lucie, Florida 34852. However,  neither the failure to designate an
address nor any inaccuracy in the address  designated  shall affect the validity
or priority of the lien of this Mortgage on the Property as described in Exhibit
A.

         1.12 Obligations. The term "obligations" is used herein in its broadest
and most comprehensive sense and shall be deemed to include, without limitation,
all  interest and charges,  prepayment  charges (if any),  late charges and loan
fees at any time accruing or assessed on any of the Secured Obligations.

         1.13  Incorporation.  All  terms  of the  Secured  Obligations  and the
documents evidencing such obligations are incorporated herein by this reference.
All persons who may have or acquire an interest in the Property  shall be deemed
to have notice of the terms of the Secured  Obligations  and to have notice,  if
provided therein,  that: (a) the Note or the Loan Agreement permit advances from

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time to time;  and (b) the rate of interest on one or more  Secured  Obligations
may vary from time to time.

                                   ARTICLE II
                                GRANTING CLAUSE

         2.1  Grant to  Mortgagee.  As  security  for the  Secured  Obligations,
Mortgagor hereby grants, bargains, sells, conveys, warrants, assigns, transfers,
mortgages and pledges the Property to Mortgagee,  and subject to all  provisions
hereof,  TO HAVE AND TO HOLD the  Property  forever;  PROVIDED  ALWAYS,  that if
Mortgagor (A) shall pay or cause to be paid to Mortgagee all of the  obligations
arising out of, and  according to the tenor and effect of, the Note and the Loan
Agreement;  (B) shall fully perform or cause to be fully performed all covenants
and  agreements set forth in the Note and Loan  Documents;  and (C) shall in the
meantime keep and perform the covenants and agreements  herein  contained,  then
these presents shall have no further force and effect.

         2.2 Security  Interest to  Mortgagee.  As  additional  security for the
Secured Obligations, Mortgagor hereby grants to Mortgagee a security interest in
the Tangible Personalty and in the Intangible Personalty and in such of the Real
Property as may be deemed personalty  (collectively,  the "Collateral").  To the
extent any of the  Collateral may be or has been acquired with funds advanced by
Mortgagee under the Loan Documents,  this security  interest is a purchase money
security  interest.  This Mortgage  constitutes a Security  Agreement  under the
Uniform  Commercial  Code of Florida (the "UCC") with respect to any part of the
Property and Collateral that may or might now or hereafter be or be deemed to be
personal  property,  fixtures or  property  other than real  estate;  all of the
terms, provisions,  conditions and agreements contained in this Mortgage pertain
and  apply to the  Collateral  as fully  and to the same  extent as to any other
property comprising the Property,  and the following  provisions of this section
shall not limit the generality or  applicability  of any other provision of this
Mortgage but shall be in addition thereto:

             (a) The Collateral  shall be used by Mortgagor  solely for business
purposes,  being  installed  upon or owned in  connection  with the real  estate
comprising  part of the Property for Mortgagor's own use or as the equipment and
furnishings  furnished by Mortgagor,  as owner,  to occupants and tenants of the
Property;

             (b) The  Tangible  Personalty  shall  be kept  at the  real  estate
comprising a part of the Property,  and shall not be removed  therefrom  without
the consent of Mortgagee and the Tangible Personalty may be affixed to such real
estate but shall not be affixed to any other real estate;

             (c) No financing  statement  covering any of the  Collateral or any
proceeds  thereof is on file in any public  office;  and Mortgagor  will, at its
cost and expense, upon demand, furnish to Mortgagee such further information and

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will  execute and  deliver to  Mortgagee  such  financing  statements  and other
documents in form satisfactory to Mortgagee and will do all such acts and things
as Mortgagee may at any time or from time to time  reasonably  request or as may
be  necessary or  appropriate  to  establish  and maintain a perfected  security
interest in the Collateral as security for the Secured  Obligations,  subject to
no adverse liens or encumbrances;  and Mortgagor will pay the cost of filing the
same or filing or recording  such  financing  statements or other  documents and
this instrument in all public offices  wherever filing or recording is deemed by
Mortgagee to be necessary or desirable;

             (d) The terms  and  provisions  contained  in this  section  and in
Section 6.12 (Enforcement of Security  Interests) of this Mortgage shall, unless
the context otherwise  requires,  have the meanings and be construed as provided
in the UCC; and

             (e) This Mortgage  constitutes  a security  agreement and financing
statement under the UCC with respect to the  Collateral.  As such, this Mortgage
covers all items of the  Collateral  that are personal  property  including  all
items which are to become  fixtures.  Mortgagor is the "Debtor" and Mortgagee is
the "Secured  Party" (as those terms are defined and used in the UCC) insofar as
this Mortgage constitutes a financing statement.

             (f) Upon its recording in the real property records,  this Mortgage
shall be  effective  as a  financing  statement  filed as a fixture  filing.  In
addition,  a carbon,  photographic  or other  reproduced  copy of this  Mortgage
and/or any financing  statement  relating  hereto shall be sufficient for filing
and/or  recording as a financing  statement.  The filing of any other  financing
statement  relating to any  personal  property,  rights or  interests  described
herein shall not be construed to diminish any right or priority hereunder.

                                  ARTICLE III
                         MORTGAGOR'S TITLE AND AUTHORITY

         3.1 Warranty of Title.  Mortgagor  represents and warrants to Mortgagee
that  Mortgagor  has good and  marketable  title to the  property  described  on
Exhibit A in fee simple absolute,  subject only to the lien of general taxes for
the current year, payable the following year, and those additional  matters,  if
any, set forth in Exhibit B, attached hereto and by this reference  incorporated
herein  ("Permitted  Exceptions").  Mortgagor further represents and warrants to
Mortgagee that Mortgagor is the absolute  owner of the  Collateral,  free of any
liens,  encumbrances,  security interests,  and other claims whatsoever,  except
insofar as the Collateral may be encumbered by the lien of general taxes for the
current  year,  payable  the  following  year.  Mortgagor,  for  itself  and its
successors  and assigns,  hereby agrees to warrant and forever  defend,  all and
singular,  all of the  property and  property  interest  granted and conveyed in
trust  pursuant to this  Mortgage,  against  every  person  whomsoever  lawfully
claiming,  or to claim,  the same or any part thereof,  subject to the Permitted
Exceptions.  The warranties  contained in this section shall survive foreclosure
of this  Mortgage,  and shall inure to the benefit of and be  enforceable by any

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person who may acquire title to the Property or the  Collateral  pursuant to any
such foreclosure.

         3.2 Waiver of Homestead and Other  Exemptions.  To the extent permitted
by law,  Mortgagor  hereby waives all rights to any homestead or other exemption
to which  Mortgagor  would  otherwise  be  entitled  under any present or future
constitutional,  statutory,  or other  provision of applicable  state or federal
law.

         3.3 Due  Authorization.  If Mortgagor  is other than a natural  person,
then  each  individual  who  executes  this  document  on  behalf  of  Mortgagor
represents  and  warrants  to  Mortgagee  that  such  execution  has  been  duly
authorized by all necessary corporate,  partnership, or other action on the part
of Mortgagor.

                                   ARTICLE IV
                        MORTGAGOR'S AFFIRMATIVE COVENANTS

         4.1 Payment of Note.  Mortgagor will pay all principal,  interest,  and
other sums payable  under the Note,  the Loan  Agreement or this Mortgage or the
Loan  Documents,  on the date  when such  payments  are due,  without  notice or
demand.

         4.2  Performance  of Other  Obligations.  Mortgagor  will  promptly and
strictly  perform  and  comply  with  all  other  covenants,   conditions,   and
prohibitions required of Mortgagor by the terms of the Loan Documents.

         4.3 Other  Encumbrances.  Mortgagor will promptly and strictly  perform
and  comply  with  all  covenants,  conditions,  and  prohibitions  required  of
Mortgagor in connection with any other encumbrance affecting the Property or the
Collateral, or any part thereof, or any interest therein,  regardless of whether
such other  encumbrance  is superior or  subordinate  to the lien  hereof.  This
paragraph does not authorize any lien or encumbrance against the Property or the
Collateral  except as permitted by Section 3.1 or with the prior written consent
of the Mortgagee as provided in this Mortgage.

         4.4 Payment of Taxes.

             (a) Property  Taxes.  Mortgagor will pay, before  delinquency,  all
taxes and  assessments,  including  without  limitation,  general,  special  and
metropolitan district taxes, water charges, sewer service charges (collectively,
the  "Impositions"),  which  may  be  levied  or  imposed  at any  time  against
Mortgagor's  interest and estate in the Property or the  Collateral.  Within ten
(10) days after  request by  Mortgagee,  Mortgagor  will deliver to Mortgagee an
official  receipt for such payment or other  evidence that such payment has been
made.

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<PAGE>

             (b) Deposit for Taxes.  If required by the Mortgagee,  concurrently
with the delivery of this  Mortgage,  Mortgagor has deposited  with Mortgagee an
amount equal to 1/12th of the amount which Mortgagee  estimates will be required
to make the next  annual  payment of  Impositions,  multiplied  by the number of
whole and partial  months which have elapsed since March 31 of the current year.
With each monthly payment under the Note,  Mortgagor will deposit with Mortgagee
an amount  equal to 1/12th  of the  amount  which  Mortgagee  estimates  will be
required to pay the next required  installment  or payment of  Impositions.  The
purpose of these  provisions is to provide  Mortgagee with  sufficient  funds on
hand to pay all such  Imposition  charges 30 days  before the date on which they
become past due. Provided no default exists hereunder,  Mortgagee will apply the
amounts so deposited to the payment of such Imposition when due, but in no event
will  Mortgagee be liable for any interest on any amount so  deposited,  and the
money so received may be held and commingled with  Mortgagee's own funds. If the
funds so deposited are  insufficient  to the  Impositions  for any year when the
same shall become due and payable,  the  Mortgagor  shall,  within ten (10) days
after  receipt  of demand  therefor,  deposit  such  additional  funds as may be
necessary to pay such Impositions in full.

             (c) Intangible  Taxes. It is  contemplated  that the Mortgagor will
pay  documentary  stamp taxes and  intangible  tax  applicable  to the full face
amount of the Note and this  Mortgage.  If any  additional  stamp or excise  tax
shall become  applicable  with respect to this  Mortgage,  the Note, any loan or
credit  extended  hereunder,  or any  security  agreement,  guaranty,  the  loan
agreement or other documents,  the Mortgagor shall promptly pay such tax in full
(including interest and penalties, if any) and shall hold the Mortgagee harmless
with respect thereto.  The Mortgagor's  liability under this Section 4.4(c) will
survive the repayment of indebtedness under the Note. Additionally, in the event
Mortgagor is unable to pay such taxes,  either for  economic  reasons or because
the legal provisions or decisions creating such tax, assessment or charge forbid
Mortgagor from doing so, then the Note will, at Mortgagee's  option,  become due
and payable in full upon thirty (30) days' prior written notice to Mortgagor.

             (d) Right to Contest.  Notwithstanding  any other provision of this
section,  Mortgagor  will not be  deemed  to be in  default  solely by reason of
Mortgagor's failure to pay any Impositions so long as, in Mortgagee's  judgment,
each of the following conditions is satisfied:

                  (i)  Mortgagor is engaged in and  diligently  pursuing in good
faith administrative or judicial proceedings appropriate to contest the validity
or amount of such Impositions; and

                  (ii)  Nonpayment  of such  Impositions  will not result in the
loss  or  forfeiture  of any  Property  encumbered  hereby  or any  interest  of
Mortgagee therein.

If Mortgagee determines that any one or more of such conditions is not satisfied
or is no longer  satisfied,  Mortgagor  will pay the  Impositions  in  question,
together  with any  interest  and  penalties  thereon,  within  ten  days  after
Mortgagee gives notice of such determination.

                                       10
<PAGE>

         4.5  Maintenance  of  Insurance.  Mortgagor  shall provide and maintain
policies of insurance on the Property in accordance with the Loan Agreement.

             (a) Deposit for Premiums.  If required by  Mortgagee,  concurrently
with the delivery of this  Mortgage,  Mortgagor has deposited  with Mortgagee an
amount equal to 1/12th of the amount which Mortgagee  estimates will be required
to make the next annual  payments of the premium for the  policies of  insurance
referred  to in this  section,  multiplied  by the  number of whole and  partial
months which have elapsed since the most recent policy anniversary date for each
such policy  ("Insurance  Premium").  With each monthly  payment under the Note,
Mortgagor  will deposit an amount equal to 1/12th of the amount which  Mortgagee
estimates  will be required  to pay the next  required  annual  premium for each
insurance policy referred to in this section. The purpose of these provisions is
to provide  Mortgagee  with  sufficient  funds on hand to pay all such Insurance
Premiums  thirty  (30)  days  before  the date on which  they  become  past due.
Mortgagor shall, within ten (10) days after receipt of demand therefor,  deposit
such  additional  funds as are necessary to make up any  deficiencies in amounts
necessary to pay such  Insurance  Premiums when due.  Provided no default exists
hereunder,  Mortgagee will apply the amounts so deposited to the payment of such
Insurance  Premiums  when due, but in no event will  Mortgagee be liable for any
interest on any amount so  deposited,  and the money so received may be held and
commingled with Mortgagee's own funds.

             (b) Renewal  Policies.  Not less than thirty (30) days prior to the
expiration  date  of  each  insurance  policy  required  pursuant  to  the  Loan
Agreement,  Mortgagor will deliver to Mortgagee a copy of an appropriate renewal
policy  certified by Mortgagor as complete and accurate,  together with evidence
satisfactory to Mortgagee that the applicable premium has been prepaid.

             (c)  Successor's  Rights.  Any  person  who  acquires  title to the
Property or the  Collateral  upon  foreclosure  hereunder will succeed to all of
Mortgagor's rights under all policies of insurance  maintained  pursuant to this
section, including,  without limitation, all rights to all claims under all such
insurance  policies  regardless  of the  nature of such claim or when such claim
arose.

         4.6 Damages; Insurance and Condemnation Proceeds.

             (a) The following  (whether now existing or hereafter  arising) are
all  absolutely and  irrevocably  assigned by Mortgagor to Mortgagee and, at the
request of Mortgagee,  shall be paid  directly to  Mortgagee:  (i) all awards of
damages and all other compensation payable directly or indirectly by reason of a
condemnation or proposed condemnation for public or private use affecting all or
any part of, or any interest in, the Property;  (ii) all other claims and awards
for damages to, or decrease in value of, all or any part of, or any interest in,
the Property;  (iii) all proceeds of any insurance policies payable by reason of
loss  sustained to all or any part of the Property;  and (iv) all interest which

                                       11
<PAGE>

may accrue on any of the  foregoing.  Subject to  applicable  law,  and  without
regard to any  requirement  contained  in Section  4.8(d)  Mortgagee  may at its
discretion  apply all or any of the  proceeds  it  receives  to its  expenses in
settling,  prosecuting  or defending  any claim and may apply the balance to the
Secured  Obligations in any order,  and/or Mortgagee may release all or any part
of the proceeds to Mortgagor upon any conditions Mortgagee may impose. Mortgagee
may commence,  appear in,  defend or prosecute any assigned  claim or action and
may adjust,  compromise,  settle and  collect all claims and awards  assigned to
Mortgagee; provided, however, in no event shall Mortgagee be responsible for any
failure to collect any claim or award,  unless such  failure is due to the gross
negligence of Mortgagee.

             (b) So long as no Default exists and is  continuing,  Mortgagee may
permit  insurance  or  condemnation  proceeds  held by  Mortgagee to be used for
repair  or  restoration  but may  condition  such  application  upon  reasonable
conditions,  including,  without  limitation:  (i) the deposit with Mortgagee of
such additional funds which Mortgagee  determines are needed to pay all costs of
the repair or restoration,  (including,  without  limitation,  taxes,  financing
charges, insurance and rent during the repair period); (ii) the establishment of
an  arrangement  for lien  releases  and  disbursement  of funds  acceptable  to
Mortgagee;  (iii) the delivery to Mortgagee of plans and  specifications for the
work, a contract for the work signed by a contractor acceptable to Mortgagee,  a
cost breakdown for the work and a payment and performance bond for the work, all
of which shall be acceptable to Mortgagee; and (iv) the delivery to Mortgagee of
evidence  acceptable to Mortgagee  (aa) that after  completion of the work,  and
sufficient  time has elapsed to re-lease  the  Property  (but in no event longer
than six months after completion of the work), the income from the Property will
be sufficient to pay all expenses and debt service for the Property; (bb) of the
continuation of Leases  acceptable to and required by Mortgagee;  (cc) that upon
completion of the work, the size,  capacity and total value of the Property will
be at least as great as it was before the damage or condemnation occurred;  (dd)
that there has been no material  adverse  change in the  financial  condition or
credit  of  Mortgagor  since  the  date  of  this  Mortgage;  and  (ee)  of  the
satisfaction  of  any  additional   conditions  that  Mortgagee  may  reasonably
establish  to protect  its  security.  Mortgagor  hereby  acknowledges  that the
conditions described above are reasonable, and, if such conditions have not been
satisfied  or  progress  satisfactory  to the  Mortgagee  made by  Mortgagor  in
achieving  satisfaction of the conditions  within ninety (90) days of receipt by
Mortgagee of such insurance or condemnation  proceeds,  then Mortgagee may apply
such  insurance or  condemnation  proceeds to pay down  principal of the Secured
Obligations  in such order and amounts as Mortgagee in its sole  discretion  may
choose.

         4.7 Maintenance  and Repair of Property and Collateral.  Mortgagor will
at all times  maintain the Property and the  Collateral  in good  condition  and
repair,  and will  diligently  prosecute the  completion of any  infrastructure,
building  or  other  improvement  which  is  at  any  time  in  the  process  of
construction  on the Property in substantial  compliance with all building codes
and other  governmental  requirements and in accordance with the Loan Agreement.
Mortgagor  shall  constantly  maintain and shall not diminish in any respect nor
materially  alter  the  Property  during  the term of this  Mortgage,  except as
required by law or municipal  ordinance,  without the prior  written  consent of

                                       12
<PAGE>

Mortgagee,  which consent shall not be  unreasonably  withheld,  conditioned  or
delayed.  Mortgagor will promptly repair, restore,  replace, or rebuild any part
of the Property or the  Collateral  which may be affected by any casualty or any
public  or  private  taking or injury to the  Property  or the  Collateral.  Any
repair,  restoration,  replacement,  or rebuilding  shall be consistent with all
applicable  laws and  regulations.  All costs and  expenses  arising  out of the
foregoing  shall  be paid  by  Mortgagor  whether  or not  the  proceeds  of any
insurance  or  eminent  domain  shall be  sufficient  therefor.  Mortgagor  will
substantially comply in all material respects with all statutes, ordinances, and
other  governmental or  quasi-governmental  requirements  and private  covenants
relating to the ownership,  construction,  use, or operation of the Property and
the  Collateral,  including but not limited to any  environmental  or ecological
requirements,  legislation  or  regulations  with respect to the Americans  With
Disabilities  Act;  provided,  that so long as  Mortgagor  is not  otherwise  in
default  hereunder,  Mortgagor  may,  upon  providing  Mortgagee  with  security
reasonably  satisfactory to Mortgagee,  proceed  diligently and in good faith to
contest  the  validity  or  applicability  of any such  statute,  ordinance,  or
requirement.  Mortgagee  and any person  authorized  by Mortgagee  may enter and
inspect the Property at all reasonable  times,  and may inspect the  Collateral,
wherever  located,  at all reasonable  times, upon no less than twenty-four (24)
hours prior written notice (except in the event of an emergency).

         4.8 Performance of Lease  Obligations.  Mortgagor will use commercially
reasonable  efforts to keep the Property fully leased at rental rates prevailing
in the market and to  perform,  in all  material  respects,  all of  Mortgagor's
obligations  under or in connection with each present and future lease of all or
any part of the Property ("Leases").

         4.9  Liens,  Encumbrances  and  Charges.  Mortgagor  shall  immediately
discharge  any lien not  approved by Mortgagee in writing that has or may attain
priority over this  Mortgage.  Subject to the  provisions of the Loan  Agreement
regarding mechanics' liens, Mortgagor shall pay when due all obligations secured
by or reducible to liens and encumbrances  which shall now or hereafter encumber
or appear to encumber all or any part of the  Property or any interest  therein,
whether senior or subordinate hereto.

         4.10  Management.  The  Mortgagor  will provide and  maintain  good and
efficient management of the Property satisfactory to Mortgagee.  Mortgagor shall
obtain Mortgagee's advance written approval of any management  provided,  and of
any contract therefor or assignment thereof, which written approval shall not be
unreasonably withheld, conditioned or delayed.

         4.11  Condemnation.  Mortgagor hereby assigns,  transfers and sets over
unto Mortgagee the entire proceeds of any award or any claim for damages for any
of the  Property  taken or  damaged  under  the  power of  eminent  domain or by
condemnation.  Mortgagee may elect, in its discretion,  to apply the proceeds of
the award upon or in reduction of the Secured Obligations, whether due or not.

                                       13
<PAGE>

         4.12 Mechanic's Liens.  Mortgagor will keep the Property free and clear
of all stop notices,  liens and claims of liens by contractors,  subcontractors,
mechanics, laborers,  materialmen, and other such persons in the manner provided
in the Loan Agreement.

         4.13 Defense of Actions.  At Mortgagor's sole expense,  Mortgagor shall
protect,  preserve and defend the Property and title to and right of  possession
of the  Property,  the  security  hereof and the rights and powers of  Mortgagee
hereunder  against all adverse  claims.  Mortgagor  shall give Mortgagee  prompt
notice in writing of the assertion of any claim,  of the filing of any action or
proceeding,  of  the  occurrence  of  any  damage  to  the  Property  and of any
condemnation offer or action.

         4.14 Inventories; Assembly of Tangible Personalty. Mortgagor will, from
time to time at the  request  of  Mortgagee,  supply  Mortgagee  with a  current
inventory of the Tangible  Personalty,  in such detail as Mortgagee may require.
Upon the  occurrence  of any Event of  Default  hereunder,  Mortgagor  will,  at
Mortgagee's  request  assemble  the  Tangible  Personalty  and make the Tangible
Personalty  available to Mortgagee at any place designated by Mortgagee which is
reasonably convenient to both parties.

         4.15 Further Assurances; Estoppel Certificates.  Mortgagor will execute
and deliver to  Mortgagee  upon  demand,  and pay the costs of  preparation  and
recording thereof,  any further documents which Mortgagee may reasonably request
to confirm or perfect the liens and security interests created or intended to be
created  hereby,   or  to  confirm  or  perfect  any  evidence  of  the  Secured
Obligations.  Mortgagor  will also,  within  ten (10) days after any  request by
Mortgagee,  deliver to Mortgagee a signed and acknowledged  statement certifying
to Mortgagee, or to any proposed transferee of the Secured Obligations,  (a) the
balance of principal,  interest, and other sums then outstanding under the Note,
and (b) whether Mortgagor claims to have any offsets or defenses with respect to
the Secured Obligations and, if so, the nature of such offsets or defenses.

         4.16  Parking  Requirements.  Mortgagor  shall  maintain  at all  times
sufficient parking spaces to comply with the parking requirements of all Leases,
zoning and other regulations affecting the Property.

         4.17  Financial  Statements and  Inspection of Records.  Mortgagor,  at
Mortgagor's expense,  shall furnish to Mortgagee the financial and other reports
required by the Loan Agreement.

         4.18 Security Deposits.  Upon the occurrence of an Event of Default and
during its  continuance,  required by the  Mortgagee,  Mortgagor  shall keep and
maintain in a separate  Mortgagee account with Mortgagee,  any security deposits
or advance payments received from tenants in lieu of security deposits. Upon the
Mortgagee's  request,  the Mortgagee shall be named on the Mortgagee account and
no funds shall be withdrawn  therefrom  without the prior written consent of the
Mortgagee.

                                       14
<PAGE>

         4.19  Environmental  Representations  and  Warranties.   Mortgagor  and
Guarantor   have  executed  for  the  benefit  of  the  Mortgagee  that  certain
Environmental  Indemnity Agreement of even date herewith ("EIA"), the provisions
of which are included herein by reference. Mortgagor shall comply with the terms
and provisions of the EIA.

                                   ARTICLE V
                         MORTGAGOR'S NEGATIVE COVENANTS

         5.1 Waste.  Mortgagor  will not commit or permit any waste with respect
to the Property or the Collateral.

         5.2 Zoning and Private  Covenants.  Except as specifically  provided in
the Loan Agreement,  if at all, Mortgagor will not initiate, join in, or consent
to any change in any development  order or development of regional impact,  land
use plan  designation,  zoning  ordinance or  classification,  any change in the
"zone lot" or "zone lots" (or similar zoning unit or units) presently comprising
the Property,  any change in any private restrictive  covenant, or any change in
any other public or private restriction  limiting or defining the uses which may
be made of the Property or any part thereof, without the express written consent
of Mortgagee.  If under applicable  zoning provisions the use of all or any part
of the Property is or becomes a nonconforming use, Mortgagor will not cause such
use to be  discontinued  or  abandoned  without the express  written  consent of
Mortgagee.

         5.3  Due On  Sale  Or  Encumbrance.  Except  as  provided  in the  Loan
Agreement,  if the Property or any interest  therein shall be sold,  transferred
(including,  without  limitation,  through  sale or  transfer  of a majority  or
controlling interest of the corporate stock or general partnership  interests or
limited liability company interests of Mortgagor),  mortgaged, assigned, further
encumbered  or leased,  whether  directly or  indirectly,  whether  voluntarily,
involuntarily  or by  operation  of law,  without the prior  written  consent of
Mortgagee,  then  Mortgagee,  in its sole  discretion,  may  declare all Secured
Obligations immediately due and payable.

         5.4  Transfer or Removal of  Tangible  Personalty.  Mortgagor  will not
sell,  transfer  or remove from the  Property  all or any  material  part of the
Tangible  Personalty,  unless  the  items  sold,  transferred,  or  removed  are
simultaneously replaced with similar items of equal or greater value.

         5.5 Further  Encumbrance  of  Collateral.  Mortgagor  will not make any
purchase or conditional  sale,  lease or agreement under which title is reserved
in the vendor of any  Collateral to be placed in or upon any of the buildings or
improvements  on the said  Property;  nor  create or  permit  any  junior  lien,
security interest or other encumbrance  against the Collateral without the prior
written consent of Mortgagee.

                                       15
<PAGE>

         5.6 Change of Name.  Mortgagor  will not  change  the name under  which
Mortgagor does  business,  or adopt or begin doing business under any other name
or assumed or trade name,  without  first  notifying  Mortgagee  of  Mortgagor's
intention to do so and  delivering to Mortgagee such executed  modifications  or
supplements of this Mortgage (and to any financing  statement which may be filed
in  connection  herewith)  as  Mortgagee  may  require,  except as  specifically
permitted in the Loan Agreement.

         5.7 Improper Use of Property or Collateral.  Mortgagor will not use the
Property or the Collateral for any purpose or in any manner,  or take any action
with respect to the Property which violates any applicable  law,  ordinance,  or
other governmental requirement,  the requirements or conditions of any insurance
policy, or any private covenant.

         5.8 Right Of Inspection. Mortgagee, its agents and employees, may enter
the Property at any  reasonable  time for the purpose of inspecting the Property
and ascertaining Mortgagor's compliance with the terms hereof.

                                   ARTICLE VI
                               DEFAULT PROVISIONS

         Each of the  following  events will  constitute a default (an "Event of
Default") under this Mortgage and under each of the other Loan Documents:

         6.1  Failure  to Pay.  Default  shall  be made  in the  payment  of any
installment of principal or interest on the Note or any other sum under the Loan
Documents when due (after giving consideration to (a) any grace period which may
be applicable under such document and (b) any notice which may be required under
such document).

         6.2 Loan  Agreement.  The  occurrence  of an Event of Default under the
Loan Agreement.

         6.3 Cross Default. A default under that certain Deed of Trust, Security
Agreement,  Financing  Statement and Assignment of Rents and Revenues,  dated of
even date herewith,  executed by AIOP Lost Dutchman Notes, L.L.C., which secures
the Note and  encumbers  property  situated in the County of Maricopa,  State of
Arizona,  and such default is not cured within the applicable  cure periods,  if
any.

         6.4 Voluntary  Bankruptcy.  Mortgagor,  or Mortgagor's  general partner
shall  file a  voluntary  petition  in  bankruptcy  or  shall be  adjudicated  a
bankruptcy  or  insolvent,  or shall  file any  petition  or answer  seeking  or
acquiescing  in  any  reorganization,  arrangement,  composition,  readjustment,
liquidation,  dissolution,  or similar  relief for itself  under any  present or
future  federal,  state,  or other  statute,  law,  or  regulation  relating  to
bankruptcy,  insolvency, or other relief for debtors or shall seek or consent to
or acquiesce in the  appointment  of any trustee,  receiver,  or  liquidator  of

                                       16
<PAGE>

Mortgagor or Mortgagor's general partner, or of all or any part of the Property,
or of any or all of the royalties,  revenues, rents, issues, or profits thereof,
or shall make any  general  assignment  for the benefit of  creditors,  or shall
admit in writing its inability to pay its debts generally as they become due.

         6.5 Involuntary  Bankruptcy.  A court of competent  jurisdiction  shall
enter  an  order,  judgment,  or  decree  approving  a  petition  filed  against
Mortgagor, Mortgagor's general partner seeking any reorganization,  dissolution,
or similar relief under any present or future federal,  state, or other statute,
law, or  regulation  relating to  bankruptcy,  insolvency,  or other  relief for
debtors, and such order, judgment, or decree shall remain unvacated and unstayed
for an aggregate of 60 days (whether or not consecutive)  from the first date of
entry thereof; or any trustee, receiver, or liquidator of Mortgagor, Mortgagor's
general  partner or of all or any part of the Property,  or of any or all of the
royalties,  revenues,  rents,  issues,  or profits  thereof,  shall be appointed
without the consent or acquiescence of Mortgagor,  Mortgagor's  general partner,
and such appointment  shall remain unvacated and unstayed for an aggregate of 60
days (whether or not consecutive).

         6.6 Judgment.  A writ of execution or attachment or any similar process
shall be issued or levied against all or any part of or interest in the Property
or a material part of the Collateral, or any judgment involving monetary damages
shall be entered against  Mortgagor  Mortgagor's  general  partner,  which shall
become a lien on the  Property  or any portion  thereof or interest  therein and
such  execution,  attachment,  or similar  process or judgment is not  released,
bonded, satisfied, vacated, or stayed within 60 days after its entry or levy.

         6.7 Superior Lien Against the  Property.  The assertion of any claim of
priority  over this  Mortgage,  by  title,  lien,  or  otherwise  in any  legal,
administrative,  or equitable proceeding, unless such assertion be withdrawn, or
effective action satisfactory to Mortgagee commenced (and thereafter  diligently
prosecuted)  and  Mortgagee  is secured  against  any loss or damage  therefrom,
within 30 days of the assertion of such claim.

         6.8  Abandonment.  The actual or  constructive  abandonment of all or a
substantial  portion  of  the  Property  or  the  Collateral  (such  abandonment
constituting an assignment to Mortgagee,  at Mortgagee's  option, of Mortgagor's
interest in any lease or  contract  now or  hereafter  affecting  the  abandoned
property).

         6.9 Valid First Lien.  The failure of  Mortgagee  to have a valid first
lien against the entire  Property and  Collateral as to all advances made now or
at any time in the future pursuant to the Note, this Mortgage, or any other Loan
Documents.

         6.10 Breach of Covenant. Mortgagor's failure to keep, observe, perform,
carry  out,  and  execute  in  every   particular  the  covenants,   agreements,
obligations,  and  conditions  (other than those set out in Sections 6.1 through
6.9,  above) set out in this  Mortgage,  the Note, the Loan  Agreement,  and any

                                       17
<PAGE>

other Loan Document  executed by Mortgagor in connection with or as security for
the Note,  unless such failure is cured to  Mortgagee's  satisfaction  following
written  notice by Mortgagee to Mortgagor of such failure.  Such notice shall be
titled  "Notice of Default" and shall  specify the default and, if curable,  the
time for cure of such  default set forth in the Loan  Documents,  and if no time
for cure is specified in the Loan Documents, the time for cure shall be 30 days;
provided,  however,  an Event of Default shall not be deemed to have occurred if
the  Default is not  curable  within the  applicable  cure period so long as the
Mortgagor  promptly  gives  written  notice  to  the  Mortgagee  describing  the
Mortgagor's  plan of cure and  schedule to cure and  commences  such cure within
thirty  (30) days of notice  of  Default,  and  diligently  pursues  the cure to
completion  within  ninety  (90) days of the  notice of  Default.  The Notice of
Default may be sent  simultaneously  with or in lieu of any other default notice
necessary  to initiate a grace or cure period  under this  Mortgage or any other
Loan Document.

         6.11  Rights  and  Remedies.  At any time  after  an Event of  Default,
Mortgagee shall each have all the following rights and remedies:

             (a) With or without  notice,  to declare  all  Secured  Obligations
immediately due and payable;

             (b) With or without notice,  and without  releasing  Mortgagor from
any Secured Obligation,  and without becoming a mortgagee in possession, to cure
any breach or Default of Mortgagor and, in connection  therewith,  to enter upon
the  Property  and do such  acts and  things as  Mortgagee  deems  necessary  or
desirable to protect the security hereof, including,  without limitation: (i) to
appear in and defend any action or proceeding  purporting to affect the security
of this Mortgage or the rights or powers of Mortgagee under this Mortgage;  (ii)
to pay, purchase,  contest or compromise any encumbrance,  charge, lien or claim
of lien which, in the sole judgment of either Mortgagee,  is or may be senior in
priority to this Mortgage, the judgment of Mortgagee being conclusive as between
the  parties  hereto;  (iii) to obtain  insurance;  (iv) to pay any  premiums or
charges with respect to insurance required to be carried under this Mortgage; or
(v) to employ counsel, accountants, contractors and other appropriate persons.

             (c) To commence  and  maintain an action or actions in any court of
competent  jurisdiction  to foreclose this instrument as a mortgage or to obtain
specific  enforcement  of the  covenants of Mortgagor  hereunder,  and Mortgagor
agrees that such covenants shall be specifically enforceable;

             (d) To apply to a court of  competent  jurisdiction  for and obtain
appointment  of a  receiver  of the  Property  as a matter of  strict  right and
without  regard to the adequacy of the security for the repayment of the Secured
Obligations,  the existence of a declaration  that the Secured  Obligations  are
immediately due and payable, or the filing of a notice of default, and Mortgagor
hereby consents to such appointment;

                                       18
<PAGE>

             (e) To enter upon, possess,  manage and operate the Property or any
part thereof,  to take and possess all  documents,  books,  records,  papers and
accounts of Mortgagor  or the then owner of the  Property,  to make,  terminate,
enforce  or modify  Leases of the  Property  upon such terms and  conditions  as
Mortgagee deems proper,  to make repairs,  alterations  and  improvements to the
Property as necessary,  in Mortgagee's sole judgment,  to protect or enhance the
security hereof;

             (f) To execute a written notice of such Event of Default and of its
election to cause the Property to be sold to satisfy the Secured Obligations. As
a condition  precedent  to any such sale,  Mortgagee  shall give and record such
notice as the law then  requires  and shall comply with the laws of the State of
Florida  regarding  foreclosure of the liens and security interest created under
this Mortgage and the Loan  Documents.  To the extent and in the manner provided
by law, Mortgagee shall be entitled to cause the Property to be sold at the time
and place of sale  fixed by it in the notice of sale,  at one or several  sales,
either as a whole or in separate  parcels  and in such manner and order,  all as
Mortgagee in its sole discretion may determine, at public auction to the highest
bidder for cash, in lawful money of the United States,  payable at time of sale.
Neither Mortgagor nor any other person or entity other than Mortgagee shall have
the  right to  direct  the  order in which  the  Property  is sold.  Subject  to
requirements and limits imposed by law, Mortgagee may from time to time postpone
or cause the  postponement  of the sale of all or any portion of the Property by
public  announcement  at such time and place of sale.  At the  conclusion of any
foreclosure  sale, the officer  conducting the sale shall execute and deliver to
the purchaser at the sale a  certificate  of purchase  which shall  describe the
property sold to such  purchaser and shall state that upon the expiration of the
applicable  periods  for  redemption,  the  holder of such  certificate  will be
entitled  to a deed to the  property  described  in the  certificate.  After the
expiration of all applicable periods of redemption, unless the property sold has
been redeemed by  Mortgagor,  the officer who  conducted  such sale shall,  upon
request,  execute  and  deliver  an  appropriate  deed  to  the  holder  of  the
certificate of purchase or the last  certificate of redemption,  as the case may
be. The recitals in the deed of any matters or facts shall be  conclusive  proof
of the truthfulness thereof. Any person,  including Mortgagor or Mortgagee,  may
purchase at the sale.  Nothing  contained in this Mortgage shall be construed to
limit or  enlarge  the  rights of  Mortgagee  to cause the  foreclosure  of this
Mortgage under the laws of the State of Florida;

             (g) To resort to and realize  upon the security  hereunder  and any
other security now or later held by Mortgagee  concurrently or successively  and
in one or several consolidated or independent judicial actions or lawfully taken
non-judicial  proceedings,  or both, and to apply the proceeds received upon the
Secured Obligations all in such order and manner as Mortgagee  determines in its
sole discretion.

             (h) Upon  sale of the  Property  at any  judicial  or  non-judicial
foreclosure,  Mortgagee  may credit bid (as  determined by Mortgagee in its sole
and  absolute  discretion)  all or any  portion of the Secured  Obligations.  In
determining  such credit bid,  Mortgagee may, but is not obligated to, take into

                                       19
<PAGE>

account all or any of the  following:  (i)  appraisals  of the  Property as such
appraisals  may be  discounted or adjusted by Mortgagee in its sole and absolute
underwriting  discretion;  (ii)  expenses and costs  incurred by Mortgagee  with
respect to the Property  prior to  foreclosure;  (iii)  expenses and costs which
Mortgagee  anticipates  will be  incurred  with  respect to the  Property  after
foreclosure,  but  prior to  resale,  including,  without  limitation,  costs of
structural reports and other due diligence, costs to carry the Property prior to
resale, costs of resale (e.g. commissions, attorneys' fees, and taxes), costs of
any hazardous materials clean-up and monitoring,  costs of deferred maintenance,
repair,  refurbishment and retrofit,  costs of defending or settling  litigation
affecting the Property,  and lost opportunity costs (if any), including the time
value  of money  during  any  anticipated  holding  period  by  Mortgagee;  (iv)
declining  trends  in  real  property  values  generally  and  with  respect  to
properties similar to the Property; (v) anticipated discounts upon resale of the
Property as a distressed  or  foreclosed  property;  (vi) the fact of additional
collateral (if any), for the Secured  Obligations;  and (vii) such other factors
or  matters  that  Mortgagee  (in  its  sole  and  absolute   discretion)  deems
appropriate. In regard to the above, Mortgagor acknowledges and agrees that: (w)
Mortgagee  is not  required  to use  any or  all  of the  foregoing  factors  to
determine  the amount of its credit bid;  (x) this  Section does not impose upon
Mortgagee any additional obligations that are not imposed by law at the time the
credit bid is made; (y) the amount of  Mortgagee's  credit bid need not have any
relation  to any  loan-to-value  ratios  specified  in  the  Loan  Documents  or
previously discussed between Mortgagor and Mortgagee; and (z) Mortgagee's credit
bid may be (at Mortgagee's  sole and absolute  discretion)  higher or lower than
any appraised value of the Property.

         6.12  Enforcement  of Security  Interests.  Mortgagee  may exercise all
rights of a secured party under the Uniform  Commercial Code with respect to the
Collateral,  including but not limited to taking  possession  of,  holding,  and
selling the  Collateral  and enforcing or otherwise  realizing upon any accounts
and general  intangibles.  Any requirement for reasonable notice of the time and
place of any public  sale,  or of the time after which any private sale or other
disposition  is to be made,  will be  satisfied  by  Mortgagee's  giving of such
notice to Mortgagor at least 15 days prior to the time of any public sale or the
time after which any private sale or other  intended  disposition is to be made.
If permitted by statute or court  decision,  the  Collateral  may be sold by the
Mortgagee as part of the foreclosure sale of the Property.

         6.13  Application of Foreclosure  Sale  Proceeds.  After  deducting all
reasonable  costs,  fees  and  expenses  of any  receiver,  and of  this  trust,
including,  without limitation, cost of evidence of title and attorneys' fees in
connection  with  sale  and  costs  and  expenses  of sale  and of any  judicial
proceeding wherein such sale may be made,  Mortgagee shall apply all proceeds of
any foreclosure sale: (a) to payment of all sums expended by Mortgagee under the
terms hereof and not then repaid,  with accrued interest at the rate of interest
specified in the Note to be applicable on or after maturity or  acceleration  of
the  Note;  (b) to  payment  of all  other  Secured  Obligations;  and  (c)  the
remainder, if any, to the person or persons legally entitled thereto.

                                       20
<PAGE>

         6.14 Foreclosure Laws. Nothing in this section dealing with foreclosure
procedures  or  specifying  particular  actions to be taken by  Mortgagee or any
officer  conducting the foreclosure sale shall be deemed to contradict or add to
the requirements  and procedures now or hereafter  specified by Florida law, and
any such  inconsistency  shall be resolved in favor of Florida law applicable at
the time of foreclosure.

         6.15  Application of Other Sums.  All sums received by Mortgagee  under
Section 6.11 or Section 6.12, less all reasonable costs and expenses incurred by
Mortgagee or any receiver under Section 6.13 or Section 7.2, including,  without
limitation,  attorneys'  fees,  shall  be  applied  in  payment  of the  Secured
Obligations in such order as Mortgagee shall  determine in its sole  discretion;
provided,  however,  Mortgagee  shall have no  liability  for funds not actually
received by Mortgagee.

         6.16 No Cure or Waiver.  Neither  Mortgagee's nor any receiver's  entry
upon  and  taking  possession  of all or any  part  of  the  Property,  nor  any
collection of rents, issues, profits, insurance proceeds,  condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation,  nor the exercise or
failure to exercise of any other right or remedy by  Mortgagee  or any  receiver
shall  cure or waive  any  breach,  Default  or  notice of  default  under  this
Mortgage,  or nullify  the effect of any notice of default or sale  (unless  all
Secured  Obligations  then due have been paid and  performed  and  Mortgagor has
cured all other  defaults),  or impair the status of the security,  or prejudice
Mortgagee  in the  exercise  of any  right  or  remedy,  or be  construed  as an
affirmation by Mortgagee of any tenancy,  lease or option or a subordination  of
the lien of this Mortgage.

         6.17 Payment of Costs,  Expenses and Attorneys' Fees.  Mortgagor agrees
to pay to Mortgagee  upon thirty (30) days' written notice from  Mortgagee,  all
reasonable  costs and expenses  incurred by  Mortgagee  pursuant to Section 6.2,
including,  without  limitation  the  costs of any  appraisals,  engineering  or
environmental testing and evaluations of the Property obtained by Mortgagee, all
costs of any  receivership  for the  Property  advanced  by  Mortgagee,  and all
attorneys',   legal  assistants'  and  consultants'  fees,   expert's  evidence,
stenographer's  charges,  publication costs, (which may be estimated as to items
to be expended after foreclosure sale or entry of the decree) costs of procuring
all such abstracts of title,  title  searches,  title  insurance  policies,  and
similar data with respect to title as Mortgagee  may deem  reasonably  necessary
either to  prosecute  such suit or to  evidence  to bidders at any sale the true
condition of title to or value of the  Property,  incurred by  Mortgagee,  shall
constitute a part of the Secured  Obligations and may be included as part of the
amount owing from Mortgagor to Mortgagee at any foreclosure  sale, with interest
from the date of  expenditure  until  said  sums  have  been paid at the rate of
interest  then  applicable  to the  principal  balance of the Note as  specified
therein.

         6.18 Power to File Notices and Cure Defaults. Upon the occurrence of an
Event of  Default,  Mortgagor  hereby  irrevocably  appoints  Mortgagee  and its
successors and assigns, as its attorney-in-fact, which agency is coupled with an
interest,  (a) to execute and/or record any notices of completion,  cessation of

                                       21
<PAGE>

labor,  or any  other  notices  that  Mortgagee  deems  appropriate  to  protect
Mortgagee's  interest,  (b)  upon  the  issuance  of  a  deed  pursuant  to  the
foreclosure  of this Mortgage or the delivery of a deed in lieu of  foreclosure,
to execute all  instruments  of assignment or further  assurance with respect to
the  Leases  and  Income in favor of the  grantee  of any such  deed,  as may be
necessary or desirable  for such  purpose,  (c) to prepare,  execute and file or
record  financing   statements,   continuation   statements,   applications  for
registration  and  like  papers   necessary  to  create,   perfect  or  preserve
Mortgagee's  security  interests and rights in or to any of the Collateral,  and
(d) upon the  occurrence  of an event,  act or  omission  which,  with notice or
passage of time or both, would  constitute a Default,  Mortgagee may perform any
obligation of Mortgagor  hereunder;  provided,  however,  that: (i) Mortgagee as
such  attorney-in-fact  shall only be accountable for such funds as are actually
received by Mortgagee;  and (ii)  Mortgagee  shall not be liable to Mortgagor or
any other person or entity for any failure to act under this Section.

                                  ARTICLE VII
                                    RECEIVER

         7.1 Appointment of Receiver.  To the extent  permitted by law, upon the
occurrence of a Default,  Mortgagee  shall be entitled,  as a matter of absolute
right  and  without  regard  to  the  value  of any  security  for  the  Secured
Obligations or the solvency of any person liable therefor, to the appointment of
a  receiver  for the  Property,  the  Leases,  and  the  Income  upon  ex  parte
application to any court of competent  jurisdiction.  Mortgagor waives any right
to any hearing or notice of hearing prior to the appointment of a receiver.

         7.2  Right  to  Make  Repairs,  Improvements.  Should  any  part of the
Property come into the possession of Mortgagee or a receiver,  whether before or
after an Event of Default, Mortgagee or the receiver and receiver's agents shall
be empowered:

             (a) To take  possession  of the  Property,  Leases,  Income and any
business  conducted by  Mortgagor  or any other person  thereon and any business
assets used in connection  therewith  and any Property in which  Mortgagee has a
security   interest   granted  by  Mortgagor  and,  if  the  receiver  deems  it
appropriate, to operate the same;

             (b) To exclude  Mortgagor and  Mortgagor's  agents,  servants,  and
employees from the Property;

             (c) With or without taking  possession of the Property,  to collect
the Income, including those past due and unpaid and security deposits;

             (d) To rent, lease or let all or any portion of the Property to any
party or parties at such rental and upon such terms as the Mortgagee  shall, and
to pay any leasing or rental commissions associated therewith in its discretion,
determine;

                                       22
<PAGE>

             (e) To continue the development, marketing and sale of the Property
or any portion thereof;

             (f) To complete any  construction  or  development  which may be in
progress;

             (g) To do such maintenance and make such repairs and alterations as
the receiver deems necessary;

             (h) To use  all  stores  of  materials,  supplies  and  maintenance
equipment on the Property and to replace and replenish such items at the expense
of the receivership estate;

             (i) To pay the operating expenses of the Property,  including costs
of  management  and leasing or  marketing  thereof  (which shall  include  lease
commissions,  sale  commissions),  payments  under  contracts and agreements for
development and construction;

             (j) To pay all taxes and  assessments  against the Property and any
property  which is  collateral  for the Secured  Obligations,  all  premiums for
insurance thereon,  all utility and other operating  expenses,  and all sums due
under any prior or subsequent encumbrance;

             (k) To borrow from the  Mortgagee  such funds as may be  reasonably
necessary to the effective  exercise of the receiver's  powers, on such terms as
may be agreed upon by the receiver and the Mortgagee; and

             (l)  Generally  do anything  which  Mortgagor  could  legally do if
Mortgagor were in possession of the Property.

All expenses  incurred by the receiver or the receiver's  agent shall constitute
part of the Secured Obligations. Any revenues collected by the receiver shall be
applied first to the expenses of the  receivership  (including  attorneys'  fees
incurred by the receiver and by Mortgagee),  to expenses of the Property, and to
preserve,  protect,  maintain and operate the Property and any other  collateral
which is security for the Secured Obligations,  and the balance shall be applied
toward the  Secured  Obligations  or any  deficiency  which may result  from any
foreclosure sale, and then in such other manner as the court may direct.  Unless
sooner  terminated  with  the  express  consent  of  the  Mortgagee,   any  such
receivership  will continue until all amounts  remaining due under the Note have
been  discharged  in full,  or until  title to the  Property  has  passed  after
foreclosure sale and all applicable  periods of redemption have expired,  and in
either case,  the court has  discharged  the  receiver.  Mortgagor  covenants to
promptly reimburse and pay to Mortgagee or such receiver, at the place where the
Note is payable,  or at such other place as may be  designated  in writing,  the
amount of all reasonable expenses  (including the cost of any insurance,  taxes,
or other charges)  incurred by Mortgagee or such receiver in connection with its
custody,  preservation, use or operation of the Property, together with interest
thereon  from  the date  incurred  by  Mortgagee  or such  receiver  at the then

                                       23
<PAGE>

applicable  interest  rate,  as set  forth in the Note,  and all such  expenses,
costs,  taxes,  interest,  and  other  charges  shall  be  part  of the  Secured
Obligations.  It is agreed,  however, that the risk of accidental loss or damage
to the Property is undertaken by Mortgagor and,  except for  Mortgagee's or such
receiver's  willful  misconduct or gross negligence,  Mortgagee or such receiver
shall have no liability  whatsoever  for decline in value of the  Property,  for
failure to obtain or maintain insurance, or for failure to determine whether any
insurance ever in force is adequate as to amount or as to the risks insured,  or
to complete development.

                                  ARTICLE VIII
                        ASSIGNMENT OF RENTS AND REVENUES

         8.1  Assignment  of Rents and Revenues.  To further  secure the Secured
Obligations,  Mortgagor does hereby sell, assign and transfer unto the Mortgagee
(a) all rental and tenancy  agreements  now or hereafter  affecting the Property
("Leases"), (b) all rents, common area charges, tax payments, insurance premiums
and any  other  payments  due to  Landlord  as a  consequence  of the use of the
Property,  now due or which may  hereafter  become due under of by virtue of any
Leases,  (c) all Income,  and (d) any and all future Leases,  whether written or
oral,  with all security  therefor,  including all  guaranties  thereof,  now or
hereafter   affecting  the  possession,   use  and  enjoyment  of  the  Property
(collectively   "Rents  and  Revenues").   The  Mortgagor  does  hereby  appoint
irrevocably  the  Mortgagee  its true and lawful  attorney in its name and stead
(with or without  taking  possession of the Property) to rent,  lease or let any
improvements  located on the  Property  upon the  occurrence  of, and during the
continuation of, a Default,  and upon such terms as said Mortgagee shall, in its
discretion,  determine,  and to collect all of said Rents and  Revenues  arising
from or accruing at any time  hereafter,  and all now due or that may  hereafter
become due under each and every of the Leases, or other  agreements,  written or
verbal,  or which may  hereafter  exist on the Property,  on the condition  that
Mortgagee  hereby grants to Mortgagor a license to collect and retain such Rents
and  Revenues  prior to the  occurrence  of any Event of Default  under the Loan
Documents.  Mortgagor  expressly  covenants  to apply  the  Rents  and  Revenues
received,  after  application for operating  expenses  permitted  hereunder,  to
payment  of the  Secured  Obligations  as and when the  same  become  due and in
compliance with the Loan Documents. Such license shall be revocable by Mortgagee
upon written notice to Mortgagor at any time after an Event of Default under the
Loan Documents,  and immediately  upon any such  revocation,  Mortgagee shall be
entitled to receive, and Mortgagor shall deliver to Mortgagee, any and all Rents
and Revenues  theretofore  collected by Mortgagor which remain in the possession
or control of Mortgagor and all Leases,  and other such agreements.  In addition
(and not as an  election  of  remedies),  at any time after an Event of Default,
Mortgagee  may exercise all rights  permitted  under  Florida  Statutes  Section
697.07,  including applying for a court order requiring Mortgagor to deposit all
rents in the court  registry,  and  Mortgagor  consents  to the entry of such an
order upon the sworn ex parte  motion of  Mortgagee  that a Default has occurred
hereunder.  It is the intention of the Mortgagor to create and grant,  and it is
the  intention  of  Mortgagee  to create and  receive,  a present  and  absolute
assignment of all of the Leases, similar agreements,  Rents and Revenues now due

                                       24
<PAGE>

or which may hereafter  become due, but it is agreed that the Mortgagee's  right
to collect the Rents and Revenues is conditioned  upon the existence of an Event
of Default  under the Loan  Documents.  Failure of Mortgagee at any time or from
time to time to enforce its rights  under this ARTICLE 8 shall not in any manner
prevent its  subsequent  enforcement,  and Mortgagee is not obligated to collect
anything  hereunder,  but  is  accountable  only  for  sums  collected.  Nothing
contained herein shall be construed as constituting the Mortgagee a mortgagee in
possession in the absence of the taking of actual  possession of the Property by
the Mortgagee  pursuant to Section 8.7 (Mortgagee's  Right of Possession In Case
of  Default)  hereof.  In the  exercise  of the  powers  herein  granted  to the
Mortgagee, no liability shall be asserted or enforced against the Mortgagee, all
such liability being expressly waived and released by Mortgagor.

         8.2 Covenants Regarding Leases. Mortgagor agrees:

             (a) Not to execute any Leases which  affect the Property  except on
the form  approved  by the  Mortgagee,  without  the prior  written  consent  of
Mortgagee.

             (b) Not to  execute  any other  assignments  of said  Leases or any
interest therein or any of the Rents and Revenues thereunder;

             (c) That notwithstanding any variation of the terms of the Mortgage
or any extension of time for payment  thereunder or any release of part or parts
of the Property, the Leases, Rents and Revenues hereby assigned, insofar as they
relate to the  unreleased  Property,  shall  continue as additional  security in
accordance with the terms hereof; and

             (d) To hold and  account  for all  security  deposits in the manner
provided  for under  any state or local  laws or  ordinances  applicable  to the
Property or under the Loan Documents;  and (e) To perform all of the Mortgagor's
covenants and  agreements  under the Leases and not to suffer or permit to occur
any release of liability  of the lessees  except in the exercise of its business
judgment as a prudent landlord.

         8.3 Representations Regarding Leases. Mortgagor represents and warrants
(a) that, the Leases, if any, are in full force and effect;  (b) that the Leases
and the Rents and Revenues  thereunder have not been heretofore sold,  assigned,
transferred,  or set over by Mortgagor  or by any person or persons  whatsoever;
(c) that no material  default exists on the part of the lessees  thereunder,  or
the Mortgagor as lessor; (d) that the payment of none of the Rents have been or,
except to the extent  otherwise  prudent under  customary  commercial  standards
exercised in the ordinary course of business will be waived, released,  reduced,
discounted or otherwise  discharged or compromised by the Mortgagor  directly or
indirectly by assuming any lessee's  obligations with respect to other premises;
(e) Mortgagor has good right to sell,  assign,  transfer,  and set over the same

                                       25
<PAGE>

and to grant to and confer upon  Mortgagee the rights,  interests,  powers,  and
authorities herein granted and conferred.

         8.4 Further  Assignments.  Mortgagor  shall give  Mortgagee at any time
upon demand any further or  additional  forms of  assignment of transfer of such
Rents and  Revenues,  Leases,  and  security as may be  reasonably  requested by
Mortgagee, and shall deliver to Mortgagee executed copies of all such leases and
security.

         8.5 Authority of Mortgagee. Any tenants or occupants of any part of the
Property are hereby  authorized to recognize  the claims of Mortgagee  hereunder
without  investigating  the  reason for any action  taken by  Mortgagee,  or the
validity or the amount of indebtedness owing to Mortgagee, or the existence of a
Default or Event of Default under any Loan  Document,  or the  application to be
made by Mortgagee of any amounts to be paid to Mortgagee.  The sole signature of
Mortgagee or a receiver shall be sufficient for the exercise of any rights under
this  ARTICLE 8 and the sole  receipt of  Mortgagee  or a receiver  for any sums
received  shall be a full  discharge and release  therefor to any such tenant or
occupant of the  Property;  and Mortgagor  hereby  releases each such tenant and
occupant or purchaser  which makes  payments to  Mortgagee  under this ARTICLE 8
from any  liability  under  the  applicable  Lease  or  occupancy  agreement  or
Contract. Checks for all or any part of the rentals collected under this ARTICLE
8 shall be drawn to the exclusive order of Mortgagee or such receiver.

         8.6  Indemnification  of Mortgagee.  Nothing herein  contained shall be
deemed to obligate  Mortgagee to perform or discharge any  obligation,  duty, or
liability of lessor under any Lease of the  Property,  and  Mortgagor  shall and
does hereby  indemnify and hold  Mortgagee  harmless from any and all liability,
loss,  or  damage  which  Mortgagee  may or might  incur  under any Lease of the
Property or by reason of this assignment;  and any and all such liability, loss,
or damage incurred by Mortgagee, together with the costs and expenses, including
reasonable  attorneys'  fees,  incurred by Mortgagee in defense of any claims or
demands  therefor  (whether  successful  or not),  shall be  additional  Secured
Obligations, and Mortgagor shall reimburse Mortgagee therefor on demand.

         8.7 Mortgagee's Right of Possession in Case of an Event of Default.  In
any case in which under the  provision of this  Mortgage,  the  Mortgagee  has a
right to institute  foreclosure  proceedings,  whether before or after the whole
principal  sum  secured  hereby is declared  to be  immediately  due, or whether
before or after the  institution  of legal  proceedings  to  foreclose  the lien
hereof or before or after sale  thereunder,  promptly  upon demand of Mortgagee,
Mortgagor  shall  surrender to Mortgagee and Mortgagee shall be entitled to take
actual  possession  of the  Property or any part thereof  personally,  or by its
agents or attorneys,  as for condition  broken,  and Mortgagee in its discretion
may,  with or without force and with or without  process of law,  enter upon and
take and maintain  possession of all or any part of the Property,  together with
all  documents,  books,  records,  papers and accounts of the  Mortgagor or then
owners of the Property  relating  thereto,  and may exclude the  Mortgagor,  its
agents or servants,  wholly therefrom and may, as  attorney-in-fact  or agent of

                                       26
<PAGE>

the  Mortgagor,  or in its own name as  Mortgagee  and under the  powers  herein
granted,  hold,  operate,  manage and  control  the  Property  and  conduct  the
business,  if any, thereof,  either  personally or by its agents,  and with full
power to use such measures,  legal or equitable,  as in its discretion or in the
discretion  of its  successors  or assigns may be deemed  proper or necessary to
enforce the payment or security of the rents,  issues,  revenues  and profits of
the Property.

         8.8 Severability  and Survival.  The provisions of this ARTICLE 8 shall
survive the  foreclosure  of the lien of this  Mortgage  and the exercise of the
power of sale granted under this Mortgage until the expiration of all periods of
redemption following any such foreclosure or sale and thereafter with respect to
all Rents and Revenues  arising prior to or  attributable to the period prior to
the expiration of all such redemption periods.

                                   ARTICLE IX
                            MISCELLANEOUS PROVISIONS

         9.1 Time of the  Essence.  Time is of the essence  with  respect to all
provisions of this Mortgage.

         9.2 Rights and  Remedies  Cumulative.  Mortgagee's  rights and remedies
under each of the Loan  Documents  are  cumulative  of the  rights and  remedies
available  to  Mortgagee  under  each of the  other  Loan  Documents  and  those
otherwise  available to Mortgagee at law or in equity. No act of Mortgagee shall
be construed  as an election to proceed  under any  particular  provision of any
Loan Document to the  exclusion of any other  provision in the same or any other
Loan  Document,  or as an election of  remedies  to the  exclusion  of any other
remedy which may then or thereafter be available to Mortgagee.

         9.3 No Implied  Waivers.  Mortgagee  shall not be deemed to have waived
any provision of this Mortgage unless such waiver is in writing and is signed by
Mortgagee.  Without limiting the generality of the preceding  sentence,  neither
Mortgagee's  acceptance of any payment with knowledge of a default by Mortgagor,
nor any  failure by  Mortgagee  to  exercise  any remedy  following a default by
Mortgagor  shall be deemed a waiver of such default,  and no waiver by Mortgagee
of any particular  default on the part of Mortgagor  shall be deemed a waiver of
any other default or of any similar default in the future.

         9.4 No Third Party Rights.  No person shall be a third party  Mortgagee
of any provision of this  Mortgage.  All  provisions  of this Mortgage  favoring
Mortgagee are intended  solely for the benefit of Mortgagee,  and no third party
shall be entitled to assume or expect that  Mortgagee  will or will not waive or
consent to modification of any such provision in Mortgagee's sole discretion.

                                       27
<PAGE>

         9.5  Preservation  of Liability  and  Priority.  Without  affecting the
liability  of  Mortgagor  or of any  other  person  (except  a person  expressly
released  in  writing)  for  payment  and  performance  of all  of  the  Secured
Obligations,  and without  affecting the rights of Mortgagee with respect to any
security not expressly released in writing, and without impairing in any way the
priority of this  Mortgage  over the  interests of any person  acquired or first
evidenced by recording subsequent to the recording hereof, Mortgagee may, either
before or after the  maturity of the Note,  and without  notice or consent:  (a)
release any person liable for payment or  performance  of all or any part of the
Secured  Obligations;  (b) make any  agreement  altering the terms of payment or
performance  of all or any of the Secured  Obligations;  (c) exercise or refrain
from  exercising,  or waive,  any right or remedy which Mortgagee may have under
any of the Loan Documents; (d) accept additional security of any kind for any of
the  Secured  Obligations;  or (e)  release or  otherwise  deal with any real or
personal  property  securing the Secured  Obligations.  Any person  acquiring or
recording  evidence  of any  interest  of any  nature  in  the  Property  or the
Collateral shall be deemed, by acquiring such interest or recording any evidence
thereof, to have agreed and consented to any or all such actions by Mortgagee.

         9.6 Subrogation of Mortgagee. Mortgagee shall be subrogated to the lien
of any previous  encumbrance  discharged  with funds advanced by Mortgagee under
the Loan  Documents,  regardless of whether such previous  encumbrance  has been
released of record.

         9.7 Notices.  Any notice required or permitted to be given by Mortgagor
or Mortgagee  under this  Mortgage  shall be in writing and will be deemed given
(a) upon  personal  delivery or upon  confirmed  transmission  by  telecopier or
similar  facsimile  transmission  device,  (b) on the first  business  day after
receipted  delivery  to a courier  service  which  guarantees  next-business-day
delivery,  or (c) on the third  business day after  mailing,  by  registered  or
certified United States mail,  postage  prepaid,  in any case to the appropriate
party at its address set forth below:

         If to Mortgagor:

                  Asset Investors Operating Partnership, L.P.
                  3410 South Galena Street, Suite 210
                  Denver, Colorado 80231
                  Attention:  David M. Becker
                  Telecopy No.:  303-614-9401

                                       28
<PAGE>

         With a copy to:

                  Joseph Gaynor, Esq.
                  Brandywine Real Estate Management Services Corporation
                  2637 McCormick Drive
                  Clearwater, Florida 33759-1041
                  Telecopy No.:  727-791-7920

         If to Mortgagee:

                  U. S. Bank National Association
                  918 17th Street, Fifth Floor
                  Denver, Colorado 80202
                  Attention:Cyd Petre, Vice President
                  Telecopy No.:  303-585-4198

         With a copy to:

                  Gorsuch Kirgis LLP
                  Tower I, Suite 1000
                  1515 Arapahoe Street
                  Denver, CO   80202
                  Attention:  Connie B. Hyde, Esq.
                  Telecopy No.:  303-376-5001

Any person may change such person's  address for notices or copies of notices by
giving notice to the other party in accordance with this section.

         9.8 Further  Assurances.  Upon issuance of a deed or deeds  pursuant to
foreclosure of this Mortgage, all right, title, and interest of the Mortgagor in
and to the Leases shall,  by virtue of this  instrument,  thereupon  vest in and
become the  absolute  property  of the grantee or grantees in such deed or deeds
without any further act or assignment by the Mortgagor.  Mortgagor hereby agrees
to execute all  instruments of assignment or further  assurance in favor of such
grantee or grantees in such deed or deeds,  as may be necessary or desirable for
such purpose.

         9.9 Defeasance. Upon payment and performance in full of all the Secured
Obligations and all costs of releasing this Mortgage, Mortgagee will execute and
deliver to Mortgagor  such documents as may be required to release this Mortgage
of record.

         9.10  Illegality.  If any  provision  of  this  Mortgage  is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Mortgage,  the legality,  validity,  and  enforceability of the
remaining provisions of this Mortgage shall not be affected thereby, and in lieu
of each such illegal,  invalid or  unenforceable  provision there shall be added

                                       29
<PAGE>

automatically as a part of this Mortgage a provision as similar in terms to such
illegal,  invalid,  or unenforceable  provision as may be possible and be legal,
valid, and  enforceable.  If the rights and liens created by this Mortgage shall
be invalid or unenforceable as to any part of the Secured Obligations,  then the
unsecured  portion of the Secured  Obligations shall be completely paid prior to
the payment of the remaining and secured portion of the Secured Obligations, and
all payments  made on the Secured  Obligations  shall be considered to have been
paid on and applied first to the complete  payment of the  unsecured  portion of
the Secured Obligations.

         9.11 Obligations Binding Upon Mortgagor's Successors.  This Mortgage is
binding upon Mortgagor and  Mortgagor's  successors  and assigns,  including all
grantees and remote  grantees of any interest of Mortgagor in the Property,  and
shall inure to the benefit of Mortgagee, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The duties,
covenants, conditions, obligations, and warranties of Mortgagor in this Mortgage
shall be joint and several  obligations of Mortgagor and Mortgagor's  successors
and assigns.

         9.12 Merger. No merger shall occur as a result of Mortgagee's acquiring
any other  estate  in, or any  other  lien on,  the  Property  unless  Mortgagee
consents to a merger in writing.

         9.13  Governing  Law.  THIS  AGREEMENT  AND THE LOAN  DOCUMENTS AND THE
RIGHTS AND  OBLIGATIONS  OF THE PARTIES  HEREUNDER AND  THEREUNDER  SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF COLORADO  (WITHOUT  GIVING  EFFECT TO  COLORADO'S  PRINCIPLES OF
CONFLICTS  OF LAW),  EXCEPT TO THE  EXTENT  (A) OF  PROCEDURAL  AND  SUBSTANTIVE
MATTERS RELATING ONLY TO THE CREATION,  PERFECTION,  FORECLOSURE AND ENFORCEMENT
OF RIGHTS AND REMEDIES  AGAINST  SPECIFIC  COLLATERAL,  WHICH  MATTERS  SHALL BE
GOVERNED  BY THE LAWS OF THE  STATE IN WHICH  THE  COLLATERAL  IS  LOCATED  (THE
"COLLATERAL  STATE"),  AND (B) THAT THE LAWS OF THE UNITED STATES OF AMERICA AND
ANY RULES REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE TO
THE AFFAIRS AND TRANSACTIONS  ENTERED INTO BY THE MORTGAGEE,  OTHERWISE  PREEMPT
COLLATERAL  STATE LAW OR COLORADO  LAW;  IN WHICH  EVENT SUCH  FEDERAL LAW SHALL
CONTROL.  MORTGAGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF ANY COLORADO OR FEDERAL  COURT  SITTING IN DENVER,  COLORADO (OR ANY STATE IN
WHICH THE PROPERTY IS LOCATED) OVER ANY SUIT,  ACTION OR PROCEEDING  ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.

                                       30
<PAGE>

         9.14  Survival.  This Mortgage  shall survive  foreclosure of the liens
created hereby, to the extent necessary to fulfill its purposes.

         9.15 Captions.  The captions and headings of various paragraphs of this
Mortgage  are for  convenience  only and are not to be  construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.

         Signed and delivered as of the date first mentioned above.

                                    MORTGAGOR:

                                    COMMUNITY SAVANNA CLUB JOINT VENTURE,
                                    a Delaware general partnership

                                      By: AIOP FLORIDA PROPERTIES I, L.L.C.,
                                          a  Delaware  limited  liability
                                          company, Managing General Partner

                                          By: ASSET INVESTORS OPERATING
                                              PARTNERSHIP, L.P., a Delaware
                                              limited partnership, Sole Member
                                              and Manager

                                              By: ASSET INVESTORS CORPORATION,
                                                  a Delaware corporation,
                                                  General Partner

                                                  By: /s/David M. Becker
                                                      --------------------------
                                                      David M. Becker
                                                      Chief Financial Officer

                                       31
<PAGE>

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Florida  Properties I, L.L.C.,  as Managing  General  Partner of
Community Savanna Club Joint Venture, a Delaware general partnership.

         Witness my hand and official seal.

         My commission expires:  12/7/2000

                                                       /s/Pam J. Finch
                                                       ------------------------
                                                          Notary Public

( S E A L )

                                       32
<PAGE>

WITNESSES:

  /s/Pam J. Finch
----------------------
Pam J. Finch

 /s/Pamela Baca
-----------------------
Pamela Baca

                                       32ASECURITY AGREEMENT
                                    [Arizona]

DEBTORS:                         ASSET INVESTORS OPERATING PARTNERSHIP, L.P.,
                                 a Delaware limited partnership ("Operating
                                 Partnership")
                                 3410 South Galena Street, Suite 210
                                 Denver, Colorado 80231

                                 AIOP LOST DUTCHMAN NOTES, L.L.C., a Delaware
                                 limited liability company ("AIOP")
                                 3410 South Galena Street, Suite 210
                                 Denver, Colorado 80231

SECURED PARTY:                   U. S. BANK NATIONAL ASSOCIATION
                                 918 17th Street, Fifth Floor
                                 Denver, Colorado 80202

EFFECTIVE DATE:                  April 7, 2000

         1. Grant of Security Interest and Collateral Assignment.  As collateral
security for the due and punctual payment and performance of the Obligations (as
hereinafter  defined),  the Debtor hereby grants to the Secured Party, with full
power and  authority  to  exercise  all rights and powers  granted by the Debtor
hereunder,  a lien upon, and a security  interest  under the Uniform  Commercial
Code of Arizona,  as in effect in the State of Arizona [Arizona Revised Statutes
("A.R.S.") Sections 47-1101 through 47-11107,  as amended from time to time (the
"UCC")]  to the  extent  that  the  same  shall  apply,  in and to,  and  hereby
collaterally  assigns to the Secured Party, all right, title and interest of the
Debtor in and to the personal property, located in the County of Maricopa, State
of Arizona,  to be identified  as the "Lost  Dutchman  Mobile Home Park",  "Blue
Valley  Mobile Home Park" and "Sun Valley Mobile Home Park"  (collectively,  the
"Mobile Home  Parks") and more  particularly  described  on Exhibit A,  attached
hereto  (collectively the "Real  Property").  Debtor's personal property is more
particularly   described  on  Exhibit  B,  attached  hereto   (collectively  the
"Collateral").  The Real Property, together with the Collateral are collectively
referred to herein as the "Property".

         2. Obligations Secured.  "Obligations" shall mean the loan evidenced by
that certain  Revolving  Promissory  Note dated the date hereof in the principal
amount of $15,000,000.00  ("Note"),  payable by the Debtor and Community Savanna
Club Joint  Venture,  a  Delaware  general  partnership  ("CSC") to the order of
Secured Party,  including without limitation,  any future advances,  and any and
all interest, commissions, obligations, liabilities,  indebtedness, charges, and
expenses now or hereafter  chargeable  against Operating  Partnership by Secured
Party or owing by Operating Partnership to Secured Party in connection with such
loan, whether direct or indirect, joint or several, absolute or contingent,  due

                                       1
<PAGE>

or to become due, now existing or hereafter  arising,  and the  performance  and
fulfillment by Debtor of all of the terms, conditions,  promises, covenants, and
provisions  contained  in this  Agreement  or in the Note or in any  present  or
future  agreement or instrument  between Debtor and Secured Party  evidencing or
securing said Note, including the Deed of Trust,  Security Agreement,  Financing
Statement   and   Assignment   of  Rents  and   Revenues,   executed  by  Debtor
simultaneously  herewith  (the "Deed of Trust"),  the Line of Credit  Agreement,
executed by Debtor,  CSC,  AIOP  Florida  Partnership  I,  L.L.C.,  AIOP Florida
Properties II, L.L.C.  and Secured Party (the "Line of Credit  Agreement").  Any
capitalized  terms used and not otherwise defined herein have the meanings given
them in the  Line of  Credit  Agreement.  Any  capitalized  terms  used  and not
otherwise  defined  herein or in the Line of Credit  Agreement,  shall  have the
meanings given to them in the UCC.

         3. Warranties and Covenants of the Debtor.

             (a) The Debtor has all power,  statutory and otherwise,  to execute
and deliver this Agreement,  to perform its obligations hereunder and to subject
the Collateral to the security  interest  created hereby,  all of which has been
duly  authorized  by all  necessary  action.  The execution and delivery of this
Agreement,  and the  performance  of this  Agreement and the  enforcement of the
security  interest granted hereby,  will not result in any violation of or be in
conflict  with or  constitute  a  default  under  any term of any  agreement  or
instrument,  or,  to the best of the  knowledge  of the  Debtor,  any  judgment,
decree, order, law, statute, rule or governmental  regulation applicable to this
Debtor or the Collateral.

             (b) AIOP is the sole record and beneficial owner of the Collateral,
and neither the Collateral  nor the proceeds  thereof are subject to any pledge,
lien,  security  interest,  charge or  encumbrance  except (i) the lien  created
pursuant to this  Agreement,  and (ii) the lien of the UCC  financing  statement
delivered by the Debtor to the Secured  Party with respect  thereto.  The Debtor
shall defend the Collateral against all claims and demands of all persons at any
time claiming any interest therein.

             (c) The Collateral  shall be located at Debtor's places of business
shown above or at the  Property.  Debtor  shall not remove the  Collateral  from
either of said locations  without the prior written consent of the Secured Party
except as  contemplated  by paragraph  3(g) below.  Debtor shall notify  Secured
Party of any change in its place of business prior to making the change.

             (d)  Debtor  shall pay all taxes and  assessments  of every  nature
which may be levied or assessed against the Collateral.

             (e) The  Debtor  shall  keep the  Collateral  at all times  insured
against risk of loss or damage by fire (including  so-called extended coverage),
theft and such other casualties as the Secured Party may reasonably require, all
in such amounts, under such forms of policies, upon such terms, for such periods
and written by such companies or  underwriters  as the Secured Party may approve
in its reasonable  discretion,  losses in all cases to be payable to the Secured
Party and the Debtor as their  interests  may appear.  All policies of insurance

                                       2
<PAGE>

shall  provide  for  at  least  fifteen  (15)  days'  prior  written  notice  of
cancellation  to the Secured  Party;  and the Debtor  shall  furnish the Secured
Party with an  appropriate  renewal  policy  certified by Debtor as complete and
accurate to assure compliance with the provisions of this paragraph.

             (f) The  Collateral  is in good  condition.  At  Debtor's  expense,
Debtor shall keep the same in good  condition,  ordinary wear and tear excepted,
and from time to time shall replace and repair all such parts of the  Collateral
as may be broken,  worn out, or damaged without  allowing any lien to be created
upon the  Collateral on account of such  replacement  or repairs,  and shall not
waste or destroy the  Collateral.  The Secured Party may examine and inspect the
Collateral at any time, wherever located.

             (g) Debtor shall not sell, lease, convey, encumber or in any manner
transfer,  without the prior  written  consent of Secured  Party,  any  tangible
personal  property now or hereafter owned by Debtor and attached to or contained
in and used in  connection  with the  operation  of the Mobile  Home  Parks,  or
otherwise  forming  a part of the  Collateral  (except  such  tangible  personal
property as is  discarded  as obsolete or damaged and is replaced by  substitute
items having equivalent or greater book value).

             (h)  Debtor  shall  not  use the  Collateral  in  violation  of any
applicable statutes, regulations or ordinances.

             (i) The  Debtor's  organization  and  governance  documents  do not
prohibit  any term or  condition  of this  Agreement,  and when  executed,  this
Agreement shall be a binding obligation of the Debtor.

             (j) Debtor shall notify  Secured  Party,  in writing,  prior to the
time Debtor changes its name, identity or limited liability company structure.

             (k) The Collateral is used or bought primarily for use in business.

             (l)  Debtor  shall  collect  its rents and  income in the  ordinary
course of business.

             (m) After an Event of  Default  as  defined in the Deed of Trust or
the  appointment of a receiver as provided  therein,  Debtor agrees that Secured
Party shall have full power to notify  tenants,  collect,  compromise,  endorse,
sell or  otherwise  deal with  proceeds in its own name or that of Debtor at any
time.  Secured Party may apply cash proceeds to the payment of any  Obligations,
or may release such cash proceeds to Debtor.

         4.  Events  of  Default.  The  occurrence  of any  one or  more  of the
following events shall constitute an Event of Default under this Agreement:

             (a)  Default  in  the  payment  or   performance  of  any  monetary
obligation  contained  or  referred  to  herein or in the Note or in the Deed of
Trust securing the same beyond any applicable grace period specified therein;

                                       3
<PAGE>

             (b) Uninsured loss,  theft,  damage, or destruction of any material
portion of the Collateral;  sale or encumbrance of any of the Collateral; or the
making of any levy, seizure or attachment thereof or thereon;

             (c)  Default  in the due  performance  or  observance  of any term,
covenant or agreement on Debtor's  part to be performed or observed  pursuant to
any of the provisions of this  Agreement,  other than payment and performance of
any monetary  obligation,  and such non-monetary default shall continue beyond a
period of thirty (30) days after  written  notice of the  Default  being sent to
Debtor by Secured Party; or

             (d) The  occurrence of an Event of Default under the Line of Credit
Agreement.

         5. Rights Upon and Event of Default. Upon the occurrence of an Event of
Default and at any time  thereafter,  and whether or not the Secured Party shall
declare any or all of the  Obligations to be immediately  due and payable in the
manner and with the effect stated in the Deed of Trust, then and in such event:

             (a) The Secured Party may foreclose upon and take possession of the
Collateral and may exclude the Debtor,  and all persons  claiming by, through or
under the Debtor,  from possession  thereof,  and may assign the Collateral to a
nominee or a third party. In connection  herewith the Secured Party or any third
party assignee or nominee of the Secured Party shall have the right to exercise,
in the name of the Debtor,  the  Debtor's  rights and powers with respect to the
Collateral.

             (b) The  Secured  Party  shall have all rights  and  remedies  of a
secured  party  available  under  the UCC  and any  other  rights  and  remedies
available  under  this  Agreement  and  under  the Deed of Trust  and any  other
documents securing the Note or at law or in equity.

             (c) The  Debtor  hereby  agrees  that if  notice  of sale or  other
disposition  of the  Collateral  is given in the  manner  and to the  address or
addresses then required pursuant to the Deed of Trust at least five (5) business
days  before the time of the sale or other  disposition,  such  notice  shall be
deemed reasonable and shall fully satisfy any requirement for the giving of said
notice,  whether  required by the UCC, any other law or  otherwise.  Any sale or
disposition may occur by private  proceedings at Secured Party's  election,  and
Debtor  acknowledges that, due to the nature of the Collateral and its essential
relationship to the operation of the facility, Secured Party may buy at any such
private sale.

             (d) Secured Party shall have the right, power and authority to sell
the  Collateral  or any part  thereof at public or private  sale for cash,  upon
credit, or for future delivery, and at such price or prices as Secured Party may
deem  best,  and  Secured  Party  may be the  purchaser  of any  and  all of the
Collateral  so sold,  in such manner and order as Secured  Party may in its sole
discretion  elect.  Upon any such sale,  Secured  Party  shall have the right to

                                       4
<PAGE>

deliver,  assign and transfer to the purchaser  thereof the  Collateral so sold.
Any such  public  sale  shall be held at such  time or  times,  within  ordinary
business  hours,  and at such place or places,  as Secured  Party may fix in the
notice of such  sale.  At any sale the  Collateral  may be sold in one lot as an
entirety or in separate  parcels as Secured Party may  determine.  Secured Party
shall not be  obligated to make any sale  pursuant to any such  notice.  Secured
Party may, without notice or publication,  adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at any time and
place  fixed  for the  sale,  and such  sale may be made at any time or place to
which  the same may be so  adjourned.  In case of any sale of all or any part of
the Collateral on credit or for future  delivery,  the Collateral so sold may be
retained  by Secured  Party  until the  selling  price is paid by the  purchaser
thereof,  but Secured  Party shall incur no  liability in case of the failure of
such purchaser to take up and pay for the Collateral so sold, and in case of any
such failure, such Collateral may again be sold upon like notice. Each and every
method of disposition  described in this paragraph shall constitute  disposition
in a commercially reasonable manner.

In conjunction therewith, in addition to or in substitution for those rights and
remedies and the rights and remedies provided for herein:

             (e) It  shall  not be  necessary  that the  Collateral  or any part
thereof be present at the location of such sale.

             (f) The  sale by  Secured  Party  of less  than  the  whole  of the
Collateral  shall not  exhaust  the rights of Secured  Party  hereunder  or with
respect to the Collateral,  and Secured Party is specifically  empowered to make
successive sale or sales  hereunder  until the whole of the Collateral  shall be
sold; and, if the proceeds of such sale of less than the whole of the Collateral
shall be less  than the  aggregate  of the  indebtedness  secured  hereby,  this
Agreement and the security  interest  created  hereby shall remain in full force
and effect as to the unsold portion of the Collateral just as though no sale had
been made.

             (g) In  the  event  any  sale  hereunder  is  not  completed  or is
defective  in the  opinion of Secured  Party,  such sale shall not  exhaust  the
rights of Secured  Party  hereunder  and  Secured  Party shall have the right to
cause a subsequent sale or sales to be made hereunder.

             (h) Any and all  statements  of fact or other  recitals made in any
bill of sale or assignment or other instrument  evidencing any sale hereunder as
to  nonpayment  of the  indebtedness  or as to the  occurrence  of an  Event  of
Default,  or as to Secured Party having declared all of such  indebtedness to be
due and  payable,  or as to  notice  of time,  place  and  terms of sale and the
properties  to be sold  having  been  duly  given,  as to any other act or thing
having been duly done by Secured Party shall be taken as prima facie evidence of
the truth of the facts so stated and recited.

             (i) Secured  Party may appoint or delegate  any one or more persons
as agent to perform any act or acts  necessary or incident to any such sale held
by Secured Party,  including the sending of notices and the conduct of sale, but
in the name and on behalf of Secured Party.

             (j) The proceeds of any sale or other  disposition or collection of
or other  realization upon all or any part of the Collateral shall be applied in
the  following  order of  priority:  first,  to pay the  costs and  expenses  of
collection,  custody, sale or other disposition or delivery (including,  without

                                       5
<PAGE>

limitation, reasonable legal costs and reasonable attorneys' fees) and all other
charges incurred by the Secured Party with respect to the Collateral; second, to
the payment of the  Obligations  in such order as the Secured  Party may, in its
sole  discretion,  determine;  and third, to pay any surplus to the Debtor or to
any  person  or party  lawfully  entitled  thereto,  or as a court of  competent
jurisdiction may direct.

             (k) Secured Party may use or operate the Collateral for the purpose
of preserving it or its value.  Secured Party may require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured  Party  which is  reasonably  convenient  to both  parties.  Expenses of
retaking,  holding,  preparing  for  sale,  selling,  or costs and  expenses  in
enforcing this Agreement,  or the like shall include Secured Party's  reasonable
attorneys'  fees and legal  expenses,  and the same,  together with all advances
made by Secured Party on behalf of the Debtor,  shall be part of the Obligations
secured hereby. Debtor shall be liable to Secured Party for any deficiency.

         6.  Release  of  Collateral.  If the  Obligations  are  fully  paid and
discharged, all Collateral held hereunder shall be returned to the Debtor by the
Secured Party promptly upon demand, all requisite  termination  statements under
the UCC shall be executed and delivered to the Debtor by the Secured Party,  and
the Secured Party shall take such other action in connection with such discharge
as the Debtor may reasonably request.

         7. Further Agreements. The Debtor has previously executed and delivered
to the Secured  Party  financing  statements  pursuant to the UCC covering  that
portion of the  Collateral  for which a security  interest  may be  perfected by
filing.  The Debtor shall,  upon request of the Secured  Party,  promptly  make,
execute and deliver to the Secured  Party,  from time to time,  a listing of the
specific Collateral, including personal property, goods, equipment, furnishings,
furniture  acquired and/or owned in connection  with the Mobile Home Parks,  and
such  other  and  further  financing  statements,   instruments,  documents  and
certificates,  and perform  such other and further acts and  assurances,  as the
Secured Party may request to perfect,  to maintain the priority of, or from time
to time, to renew, such security interests, to confirm or more fully perfect the
rights  granted  hereby,  or in any way to assure the  Secured  Party all of its
rights  hereunder.  The Debtor shall pay the costs of all filings and recordings
in public offices of record, and shall, upon request of the Secured Party, make,
execute and deliver such other and further instruments,  and take such other and
further  actions,  as the Secured  Party may deem  necessary or  appropriate  to
enable  it to  realize  upon  the  Collateral,  to  exercise  fully  its  rights
hereunder, and to ratify and confirm any sale hereunder.

         8.  Indemnification;  Waivers.  The  Debtor  shall  indemnify  and hold
harmless  the  Secured  Party  from any and all  liability  or damage  which the
Secured Party may incur in the exercise and  performance,  in good faith, of any
of its  powers  and  duties  specifically  set  forth  herein,  but  not for any
liability  or damage  incurred  on  account of the gross  negligence  or willful
misconduct  of the  Secured  Party  provided,  however,  that  Debtor  shall not
indemnify  Secured Party from and against claims  asserted by third parties as a
consequence  of the  Secured  Party's  negligence  or  misconduct.  No  delay or
omission  on the part of the Secured  Party in  exercising  any right  hereunder

                                       6
<PAGE>

shall  operate as a waiver of such right or of any other  right  hereunder.  Any
waiver of any such right on any one occasion  shall not be construed as a bar to
or waiver of any such right on any such  future  occasion.  No course of dealing
between the Debtor and the Secured  Party nor any failure to  exercise,  nor any
delay in  exercising,  on the part of the  Secured  Party,  any right,  power or
privilege  hereunder or under any of the Obligations,  shall operate as a waiver
thereof;  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or in the exercise of any other right,  power or  privilege.  The Secured  party
shall be under no duty or liability with respect to the Collateral other than to
use reasonable care in the custody of any Collateral while in its possession and
shall not be liable for any failure to take action  necessary to preserve rights
against prior or other parties on any instrument constituting the Collateral.

         9. Further Transfers  Prohibited.  The Debtor covenants and agrees that
it  will  not,  at any  time  during  the  term  of this  Agreement,  except  as
contemplated by paragraph 3(g) hereof, further convey or encumber the Collateral
in any  manner  whatsoever;  and the  Debtor  agrees  that it will do all things
necessary to maintain  the  enforceability  and priority of the Secured  Party's
security interest in the Collateral.

         10.  Notices.  Any  and  all  notices,  demands,  consents,  and  other
communications  required  or  permitted  under  this  Agreement  shall be deemed
adequately  given only if given in the manner and to the  addresses  provided in
the Deed of Trust.

         11. General Provisions.

             (a) No waiver by Secured  Party of any default  shall  operate as a
waiver of any other  default or of the same  default on a future  occasion.  The
taking of this Security  Agreement  shall not waive or impair any other security
said Secured  Party may have or  hereafter  acquire for the payment of the above
indebtedness,  nor shall the  taking of any such  additional  security  waive or
impair  this  Security  Agreement;  but said  Secured  Party  may  resort to any
security it may have in the order it may deem proper,  and  notwithstanding  any
collateral  security,  Secured  Party shall retain its rights of setoff  against
Debtor.

             (b) At its  option,  but  without  obligation  to the  Debtor,  the
Secured  Party may  discharge  taxes,  liens,  or  security  interests  or other
encumbrances at any time levied or placed on the  Collateral,  may place and pay
for  insurance  thereon,  may  order  and pay for the  repair,  maintenance  and
preservation  thereof and may pay any necessary  filing or recording  fees.  The
Debtor  agrees to reimburse  the Secured Party on demand for payment made or any
expense incurred by the Secured Party pursuant to the foregoing authorization.

             (c) Until the  occurrence  of an Event of Default,  Debtor may have
possession of the  Collateral  and use it in any lawful manner not  inconsistent
with this Agreement or any policy of insurance thereon,  and upon the occurrence
of an Event of Default,  Secured Party shall have immediate  right to possession
of the  Collateral,  provided,  however,  that  Secured  Party may  perfect  its
interest in the Collateral by possession.

                                       7
<PAGE>

             (d) All rights of the Secured  Party  hereunder  shall inure to the
benefit of its  successors  and  assigns;  and all promises and duties of Debtor
shall bind its legal representatives, successors or assigns.

             (e)  Except  as  otherwise  provided  by the UCC,  Debtor  releases
Secured  Party from all claims for loss or damage  caused by any act or omission
on the part of Secured Party, its officers,  agents and employees,  except gross
negligence or willful misconduct.

             (f)  This  Agreement  shall  be  governed  by  and  interpreted  in
accordance  with the laws of the State of Colorado except to the extent that the
laws of the State of Arizona regarding the creation,  perfection and realization
upon the security  interests and liens hereunder  require the application of the
State in which the Property is located.  Further, the place where this Agreement
is entered into and the place of performance  and  transaction of business shall
be deemed to be the State of Colorado.

             (g) Unless the context  otherwise  requires,  all terms used herein
which are defined in the UCC, shall have the meaning therein stated.

                                       8
<PAGE>

         DATED effective the 7 day of April, 2000.

                                   DEBTORS:

                                   ASSET INVESTORS OPERATING PARTNERSHIP, L.P.,
                                   a Delaware limited partnership

                                   By:  ASSET INVESTORS CORPORATION, a Delaware
                                        corporation, General Partner

                                        By:  /s/David M. Becker
                                             -------------------------
                                              David M. Becker
                                              Chief Financial Officer

                                   AIOP LOST DUTCHMAN NOTES, L.L.C., a Delaware
                                   limited liability company

                                   By:  ASSET INVESTORS OPERATING PARTNERSHIP,
                                        L.P.,  a  Delaware limited partnership,
                                        Sole Member and Manager

                                        By:  ASSET INVESTORS CORPORATION, a
                                             Delaware corporation, General
                                             Partner

                                             By:  /s/David M. Becker
                                                 -------------------------
                                                  David M. Becker
                                                  Chief Financial Officer

                                       9
<PAGE>

                                   SECURED PARTY:

                                   U.S. BANK NATIONAL ASSOCIATION

                                    By:  /s/Cyd Petre
                                        --------------------------
                                         Cyd Petre, Vice President

                                       10
<PAGE>

STATE OF COLORADO                                    )
                                                     )    ss.
COUNTY OF DENVER                                     )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership, L.P., a Delaware limited partnership.

         Witness my hand and official seal.

         My commission expires:     12/7/2000

                                                            /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public

( S E A L )

STATE OF COLORADO                                    )
                                                     )    ss.
COUNTY OF DENVER                                     )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager  of AIOP Lost  Dutchman  Notes,  L.L.C.,  a Delaware  limited  liability
company.

         Witness my hand and official seal.

         My commission expires:     12/7/2000

                                                            /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public
( S E A L )

                                       11
<PAGE>

STATE OF COLORADO                                    )
                                                     )        ss.
CITY AND COUNTY OF DENVER                            )

     The foregoing  instrument was  acknowledged  before me this 7 day of April,
2000, by Cyd Petre as Vice President of U. S. BANK NATIONAL ASSOCIATION.

         Witness my hand and official seal.

         My Commission Expires:                      12/7/2000

                                                             /s/Pam J. Finch
                                                         -----------------------
                                                             Notary Public

[ S E A L ]

                                       12

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