EXHIBIT 4.20

                      MOUNT PLEASANT KPT LLC, as mortgagor
                                   (Borrower)

                                       to

               GMAC COMMERCIAL MORTGAGE CORPORATION, as mortgagee
                                    (Lender)

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

                           FEE AND LEASEHOLD MORTGAGE
                                       AND
                               SECURITY AGREEMENT
                       -----------------------------------

                    Dated: December 16, 2000, effective as of December 20, 2000

                    Location: Highway 17
                              Mount Pleasant, South Carolina

                    Parcel Identification No. ______________
                    Commonly known as Mount Pleasant Towne Center


                    PREPARED BY AND UPON
                    RECORDATION RETURN TO:

                    Dechert
                    4000 Bell Atlantic Tower
                    1717 Arch Street
                    Philadelphia, PA 19103-2793
                    Attention:  Jay Zagoren, Esq.

       THIS MORTGAGE AND SECURITY AGREEMENT COVERS FIXTURES AND CONSTITUTES A
FIXTURE FINANCING STATEMENT.

       THE MATURITY DATE OF ALL LOANS SECURED HEREBY IS JANUARY 5, 2011

       TO THE EXTENT, IF ANY, PROVIDED IN THE NOTE(S), INTEREST OR DISCOUNT WILL
BE DEFERRED, ACCRUED OR CAPITALIZED.



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                                TABLE OF CONTENTS

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                                                                                                               Page
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<S>                   <C>                                                                                         <C>
ARTICLE 1 - GRANTS OF SECURITY................................................................................... 1

   SECTION 1.1.       PROPERTY MORTGAGED......................................................................... 1
   SECTION 1.2.       ASSIGNMENT OF LEASES AND RENTS............................................................. 4
   SECTION 1.3.       SECURITY AGREEMENT......................................................................... 4
   SECTION 1.4.       PLEDGE OF MONIES HELD...................................................................... 4

ARTICLE 2 - DEBT AND OBLIGATIONS SECURED......................................................................... 4

   SECTION 2.1.       DEBT....................................................................................... 4
   SECTION 2.2.       OTHER OBLIGATIONS.......................................................................... 5
   SECTION 2.3.       DEBT AND OTHER OBLIGATIONS................................................................. 5
   SECTION 2.4.       PAYMENTS................................................................................... 5

ARTICLE 3 - BORROWER COVENANTS................................................................................... 6

   SECTION 3.1.       PAYMENT OF DEBT............................................................................ 6
   SECTION 3.2.       INCORPORATION BY REFERENCE................................................................. 6
   SECTION 3.3.       INSURANCE.................................................................................. 6
   SECTION 3.4.       PAYMENT OF TAXES, ETC......................................................................10
   SECTION 3.5.       ESCROW FUND................................................................................10
   SECTION 3.5.       HEREOF TO BE HELD BY LENDER IN ESCROW......................................................10
   SECTION 3.6.       CONDEMNATION...............................................................................11
   SECTION 3.7.       LEASES AND RENTS...........................................................................12
   SECTION 3.8.       MAINTENANCE OF PROPERTY....................................................................13
   SECTION 3.9.       WASTE......................................................................................13
   SECTION 3.10.      COMPLIANCE WITH LAWS.......................................................................14
   SECTION 3.11.      BOOKS AND RECORDS..........................................................................15
   SECTION 3.12.      PAYMENT FOR LABOR AND MATERIALS............................................................16
   SECTION 3.13.      PERFORMANCE OF OTHER AGREEMENTS............................................................16
   SECTION 3.14.      CHANGE OF NAME, IDENTITY OR STRUCTURE......................................................16
   SECTION 3.15.      EXISTENCE..................................................................................17

ARTICLE 4 - SPECIAL COVENANTS....................................................................................17

   SECTION 4.1.       PROPERTY USE...............................................................................17
   SECTION 4.2.       ERISA......................................................................................17
   SECTION 4.3.       SINGLE PURPOSE ENTITY......................................................................17
   SECTION 4.4.       RESTORATION AFTER CASUALTY/CONDEMNATION....................................................20

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES.......................................................................24

   SECTION 5.1.       WARRANTY OF TITLE..........................................................................24
   SECTION 5.2.       AUTHORITY..................................................................................25
   SECTION 5.3.       LEGAL STATUS AND AUTHORITY.................................................................25
   SECTION 5.4.       VALIDITY OF DOCUMENTS......................................................................25
   SECTION 5.5.       LITIGATION.................................................................................25
   SECTION 5.6.       STATUS OF PROPERTY.........................................................................26
   SECTION 5.7.       NO FOREIGN PERSON..........................................................................27
   SECTION 5.8.       SEPARATE TAX LOT...........................................................................27
   SECTION 5.9.       ERISA COMPLIANCE...........................................................................27
   SECTION 5.10.      LEASES.....................................................................................27
   SECTION 5.11.      FINANCIAL CONDITION........................................................................28
   SECTION 5.12.      BUSINESS PURPOSES..........................................................................28
   SECTION 5.13.      TAXES......................................................................................28
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<S>                   <C>                                                                                         <C>
   SECTION 5.14.      MAILING ADDRESS............................................................................28
   SECTION 5.15.      NO CHANGE IN FACTS OR CIRCUMSTANCES........................................................28
   SECTION 5.16.      DISCLOSURE.................................................................................29
   SECTION 5.17.      THIRD PARTY REPRESENTATIONS................................................................29
   SECTION 5.18.      ILLEGAL ACTIVITY...........................................................................29

ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP.........................................................................29

   SECTION 6.1.       RELATIONSHIP OF BORROWER AND LENDER........................................................29
   SECTION 6.2.       SERVICING OF THE LOAN......................................................................29

ARTICLE 7 - FURTHER ASSURANCES...................................................................................29

   SECTION 7.1.       RECORDING OF SECURITY INSTRUMENT, ETC......................................................29
   SECTION 7.2.       FURTHER ACTS, ETC..........................................................................29
   SECTION 7.3.       CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.....................................30
   SECTION 7.4.       ESTOPPEL CERTIFICATES......................................................................30
   SECTION 7.5.       FLOOD INSURANCE............................................................................31
   SECTION 7.6.       SPLITTING OF SECURITY INSTRUMENT...........................................................31
   SECTION 7.7.       REPLACEMENT DOCUMENTS......................................................................31
   SECTION 7.8.       AMENDED FINANCING STATEMENTS...............................................................32

ARTICLE 8 - DUE ON SALE/ENCUMBRANCE..............................................................................32

   SECTION 8.1.       NO SALE/ENCUMBRANCE........................................................................32
   SECTION 8.2.       SALE/ENCUMBRANCE DEFINED...................................................................33
   SECTION 8.3.       LENDER'S RIGHTS............................................................................34
   SECTION 8.4.       INTENTIONALLY OMITTED......................................................................34

ARTICLE 9 - PREPAYMENT...........................................................................................34

   SECTION 9.1.       PREPAYMENT OR DEFEASANCE ONLY IN ACCORDANCE WITH NOTE......................................34

ARTICLE 10 - DEFAULT.............................................................................................34

   SECTION 10.1.      EVENTS OF DEFAULT..........................................................................34

ARTICLE 11 - RIGHTS AND REMEDIES.................................................................................36

   SECTION 11.1.      REMEDIES...................................................................................36
   SECTION 11.2.      APPLICATION OF PROCEEDS....................................................................38
   SECTION 11.3.      RIGHT TO CURE DEFAULTS.....................................................................39
   SECTION 11.4.      ACTIONS AND PROCEEDINGS....................................................................39
   SECTION 11.5.      RECOVERY OF SUMS REQUIRED TO BE PAID.......................................................39
   SECTION 11.6.      EXAMINATION OF BOOKS AND RECORDS...........................................................39
   SECTION 11.7.      OTHER RIGHTS, ETC..........................................................................39
   SECTION 11.8.      RIGHT TO RELEASE ANY PORTION OF THE PROPERTY...............................................40
   SECTION 11.9.      VIOLATION OF LAWS..........................................................................40
   SECTION 11.10.     RIGHT OF ENTRY.............................................................................40
   SECTION 11.11.     SUBROGATION................................................................................41

ARTICLE 12 - ENVIRONMENTAL HAZARDS...............................................................................41

   SECTION 12.1.      ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES...............................................41

ARTICLE 13 - INDEMNIFICATION.....................................................................................41

   SECTION 13.1.      GENERAL INDEMNIFICATION....................................................................41
   SECTION 13.2.      MORTGAGE AND/OR INTANGIBLE TAX.............................................................42
   SECTION 13.3.      ERISA INDEMNIFICATION......................................................................42
   SECTION 13.4.      DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES................................42

ARTICLE 14 - WAIVERS.............................................................................................43
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<S>                   <C>                                                                                         <C>
   SECTION 14.1.      WAIVER OF COUNTERCLAIM.....................................................................43
   SECTION 14.2.      MARSHALLING AND OTHER MATTERS..............................................................43
   SECTION 14.3.      WAIVER OF NOTICE...........................................................................43
   SECTION 14.4.      WAIVER OF STATUTE OF LIMITATIONS...........................................................43
   SECTION 14.5.      SOLE DISCRETION OF LENDER..................................................................43
   SECTION 14.6.      WAIVER OF TRIAL BY JURY....................................................................43

ARTICLE 15 - EXCULPATION.........................................................................................44

   SECTION 15.1.      EXCULPATION................................................................................44
   SECTION 15.2.      RESERVATION OF CERTAIN RIGHTS..............................................................44
   SECTION 15.3.      EXCEPTIONS TO EXCULPATION..................................................................45
   SECTION 15.4.      RECOURSE...................................................................................45
   SECTION 15.5.      BANKRUPTCY CLAIMS..........................................................................45

ARTICLE 16 - NOTICES.............................................................................................45

   SECTION 16.1.      NOTICES....................................................................................45

ARTICLE 17 - APPLICABLE LAW......................................................................................46

   SECTION 17.1.      CHOICE OF LAW..............................................................................46
   SECTION 17.2.      USURY LAWS.................................................................................47
   SECTION 17.3.      PROVISIONS SUBJECT TO APPLICABLE LAW.......................................................47
   SECTION 17.4.      INAPPLICABLE PROVISION.....................................................................47

ARTICLE 18 - SECONDARY MARKET....................................................................................47

   SECTION 18.1.      DISSEMINATION OF INFORMATION...............................................................47
   SECTION 18.1.      RATING AGENCY..............................................................................48

ARTICLE 19 - COSTS...............................................................................................48

   SECTION 19.1.      PERFORMANCE AT BORROWER'S EXPENSE..........................................................48
   SECTION 19.2.      ATTORNEY'S FEES FOR ENFORCEMENT............................................................49

ARTICLE 20 - DEFINITIONS.........................................................................................49

   SECTION 20.1.      GENERAL DEFINITIONS........................................................................49
   SECTION 20.2.      HEADINGS, ETC..............................................................................49

ARTICLE 21 - MISCELLANEOUS PROVISIONS............................................................................49

   SECTION 21.1.      NO ORAL CHANGE.............................................................................49
   SECTION 21.2.      LIABILITY..................................................................................50
   SECTION 21.3.      DUPLICATE ORIGINALS; COUNTERPARTS..........................................................50
   SECTION 21.4.      NUMBER AND GENDER..........................................................................50
   SECTION 21.5.      SUBROGATION................................................................................50
   SECTION 21.6.      ENTIRE AGREEMENT...........................................................................50

ARTICLE 22 - GROUND LEASE........................................................................................50

   SECTION 22.1.      REPRESENTATIONS AND WARRANTIES.............................................................50
   SECTION 22.2.      COVENANTS..................................................................................51
   SECTION 22.3.      ADDITIONAL COVENANTS.......................................................................51
   SECTION 22.4.      NO RELEASE.................................................................................51
   SECTION 22.5.      DEFAULTS...................................................................................52
   SECTION 22.6.      CANCELLATION OR TERMINATION................................................................52
   SECTION 22.7.      NO LIABILITY...............................................................................52
   SECTION 22.8.      BANKRUPTCY.................................................................................52
   SECTION 22.9.      NO MERGER..................................................................................52
   SECTION 22.10.     TAXES......................................................................................................53
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<S>                   <C>                                                                                         <C>

ARTICLE 23 - LOCAL LAW PROVISIONS................................................................................53

   SECTION 23.1.      EXHIBIT B..................................................................................53
   SECTION 23.2.      WAIVER OF APPRAISAL RIGHTS..................................................................1
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Exhibits -
         Exhibit A - Description of Land
         Exhibit B - Local Law Provisions - South Carolina
         Exhibit C - Schedule of Offsets or Defenses
         Exhibit D - Schedule of Brokerage Fees
         Exhibit E - List of Defaults
         Exhibit F - Intentionally Omitted
         Exhibit G - Form of Release

Definitions

The terms set forth below are defined in the following Sections of this Security
Instrument:

a.       ADA:  Subsection 3.10(a);
b.       Applicable Law:  Subsection 3.10(a);
c.       Attorneys' Fees/Counsel Fees:  Section (20.1
d.       Bankruptcy Code:  Subsection 1.1(f);
e.       Borrower:  Preamble;
f.       Business Day:  Section 16.1;
g.       Casualty Consultant:  Subsection 4.4(b);
h.       Casualty Retainage:  Subsection 4.4(b);
i.       Collateral:  Section 1.3;
j.       Debt:  Section 2.1;
k.       Default Interest Rate:  Section 11.3;
l.       Environmental Indemnity:  Subsection 10.1(c);
m.       Environmental Law:  Section 12.1;
n.       Environmental Liens:  Section 12.2;
o.       Environmental Report:  Section 12.1;
p.       ERISA:  Subsection 4.2;
q.       Escrow Fund:  Section 3.5;
r.       Event:  Section 19.1;
s.       Event of Default:  Section 10.1;
t.       Exculpated Parties:  Section 15.1;
u.       Force Majeure:  Subsection 4.4(b);
v.       Ground Lease:  Subsection 1.1(b);
w.       Ground Lessor:  Subsection 1.1(b);
x.       Guarantor:  Section 5.5;
y.       Hazardous Substances:  Section 12.1;
z.       Improvements:  Subsection 1.1(c);
aa.      Indemnified Parties:  Section 13.1;
bb.      Indemnitor:  Subsection 10.1(c);
cc.      Independent Director:  Subsection 4.3(c);
dd.      Insurance Premiums:  Subsection 3.3(b);
ee.      Investor:  Section 18.1;
ff.      Land:  Subsection 1.1(a);
gg.      Lease Guaranty:  Subsection 3.7(a);
hh.      Leases:  Subsection 1.1(f);

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ii.      Lender:  Preamble;
jj.      Loan:  Section 5.10
kk.      Loan Application:  Section 5.15;
ll.      Losses:  Section 13.1;
mm.      Major Lease:  Section 3.7(a)
nn.      Net Proceeds:  Subsection 4.4(b);
oo.      Net Proceeds Deficiency:  Subsection 4.4(b);
pp.      Note:  Recitals;
qq.      Obligations:  Section 2.3;
rr.      Other Charges:  Section 3.4;
ss.      Other Obligations:  Section 2.2;
tt.      Partial Release:  Section 8.8;
uu.      Participations:  18.1;
vv.      Permitted Exceptions:  Section 5.1;
ww.      Person:  Section 20.1;
xx.      Personal Property:  Subsection 1.1(e);
yy.      Policies/Policy:  Subsection 3.3(b);
zz.      Property:  Section 1.1;
aaa.     Qualified Insurer:  Subsection 3.3(b);
bbb.     Rating Agency:  Subsection 3.3(b);
ccc.     Release:  Section 12.1;
ddd.     Remediation:  Section 12.1;
eee.     Rents:  Subsection 1.1(f);
fff.     Restoration:  Subsection 4.4;
ggg.     Securities:  Section 18.1;
hhh.     Securitization:  Section 18.1;
iii.     Security Documents:  Section 3.2;
jjj.     Security Instrument:  Preamble;
kkk.     Servicer:  Section 6.2;
lll.     SPE Member:  Subsection 4.3(c);
mmm.     Taxes:  Subsection 3.4(a); and
nnn.     Uniform Commercial Code:  Subsection 1.1(e)

                                      -vi-

<PAGE>


         THIS FEE AND LEASEHOLD MORTGAGE AND SECURITY AGREEMENT (the "Security
Instrument") is made as of the 16th day of December, 2000, effective as of
December 20, 2000, by MOUNT PLEASANT KPT LLC, a Delaware limited liability
company, having its principal place of business at 11000 Regency Parkway, Suite
300, Cary, North Carolina 27511 as mortgagor ("Borrower") to GMAC COMMERCIAL
MORTGAGE CORPORATION, a California corporation, having an address at 200 Witmer
Road, Horsham, Pennsylvania 19044, as mortgagee (together with its successors
and assigns, "Lender").

                                    RECITALS:

         Borrower by its promissory note of even date herewith given to Lender
is indebted to Lender in the maximum principal sum of $46,400,000.00 in lawful
money of the United States of America (the note together with all extensions,
renewals, modifications, consolidations, substitutions, replacements,
restatements and increases thereof shall collectively be referred to as the
"Note"), with interest from the date thereof at the rates set forth in the Note,
principal and interest to be payable in accordance with the terms and conditions
provided in the Note.

         Borrower desires to secure the payment of the Debt (as defined in
Article 2) and the performance of all of its obligations under the Note and the
Other Obligations (as defined in Article 2).

                         ARTICLE 1 - GRANTS OF SECURITY

         Section 1.1. PROPERTY MORTGAGED. Borrower does hereby irrevocably (i)
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Lender and to its successors and assigns with power of sale in accordance with
the terms and conditions hereof, for the use and benefit of Lender, and (ii)
grant a security interest to Lender and to its successors and assigns with power
of sale, in accordance with the terms and conditions hereof, for the use and
benefit of Lender, in, the following property, rights, interests and estates now
owned, or hereafter acquired by Borrower (collectively, the "Property"):


                  (a) LAND. The real property described in Exhibit A attached
hereto and made a part hereof, which includes the certain land described below
as the Leasehold Estate and certain land described below as the Release
Leasehold Estate (collectively, the "Land");

                  (b) GROUND LEASE. Borrower's right, title and interest, as
Lessee, in and to that certain Ground Lease (as amended and assigned, the
"Ground Lease") between Harvey Wilson McCormick ("Ground Lessor") as lessor and
AJS Partnership Group, as lessee, dated May 19, 1995, a memorandum of which was
recorded at the RMC office for Charleston County, South Carolina on May 24, 1995
in Book S-255 at page 255, which Ground Lease was assigned to AJS Group, LLC by
Assignment of Lease dated as of November 22, 1995 and recorded December 4, 1995
in Book V-262, page 333, amended by an Amendment to Ground Lease dated November
21, 1997 and recorded November 25, 1997 in Book N-293, page 458, assigned by
Assignment of Ground Lease dated April 9, 1998 and recorded April 10, 1998 in
Book T-300, page 615, amended by an Amendment to Memorandum of Lease dated April
9, 1998 and recorded April 10, 1998, in Book T-300, page 618, a mended by a
Third Amendment to Memorandum of Lease dated June 14, 1999 and recorded June 21,
1999 in Book X-328 at Page

                                       1
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827, and amended by a Fourth Amendment to Memorandum of Lease dated as of August
6, 1999 and recorded August 27, 1999 in Book J-333 at Page 386; and the
leasehold interest created under the Ground Lease (the "Leasehold Estate").

                  (c) INTENTIONALLY OMITTED.

                  (d) ADDITIONAL LAND. All additional lands, estates and
development rights hereafter acquired by Borrower for use in connection with the
Land and the development of the Land that may, from time to time, by
supplemental mortgage or otherwise be expressly made subject to the lien of this
Security Instrument;

                  (e) IMPROVEMENTS. The buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter erected or located on the Land (the
"Improvements");

                  (f) EASEMENTS. All easements, rights-of-way or use, rights,
strips and gores of land, streets, ways, alleys, passages, sewer rights, water,
water courses, water rights and powers, air rights and development rights, and
all estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;

                  (g) FIXTURES AND PERSONAL PROPERTY. All machinery, equipment,
fixtures (including, but not limited to all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) furniture, furnishing, inventory
and other property of every kind and nature whatsoever owned by Borrower, or in
which Borrower has or shall have an interest, now or hereafter located upon the
Land or the Improvements but excluding property of Borrower's manager, or
appurtenant thereto, and used in connection with the present or future operation
and occupancy of the Land and the Improvements and all building equipment,
materials and supplies of any nature whatsoever owned by Borrower, or in which
Borrower has or shall have an interest, now or hereafter located upon the Land
and the Improvements, or appurtenant thereto, or used in connection with the
present or future operation and occupancy of the Land and the Improvements
(collectively, the "Personal Property"), and the right, title and interest of
Borrower in and to any of the Personal Property which may be subject to any
security interests, as defined in the Uniform Commercial Code, as adopted and
enacted by the state or states where any of the Property is located (the
"Uniform Commercial Code"), superior in lien to the lien of this Security
Instrument and all proceeds and products of the above;

                  (h) LEASES AND RENTS. All leases and other agreements
affecting the use, enjoyment or occupancy of all or any part of the Land or the
Improvements heretofore or hereafter entered into whether before or after the
filing by or against Borrower of any petition for relief under 11 U.S.C. ss. 101
et seq. (the "Bankruptcy Code"), as the same may be amended from

                                       2
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time to time (the "Leases") and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including, without limitation,
all guarantees, letters of credit and any other credit support given by any
guarantor in connection therewith, cash or securities deposited under the Leases
to secure the performance by the lessees of their obligations thereunder and all
rents, additional rents, revenues, issues and profits (including all oil and gas
or other mineral royalties and bonuses) from the Land and the Improvements
whether paid or accruing before or after the filing by or against Borrower of
any petition for relief under the Bankruptcy Code (the "Rents") and all proceeds
from the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Debt;

                  (i) CONDEMNATION AWARDS. All awards or payments, including
interest thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including,
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;

                  (j) INSURANCE PROCEEDS. All proceeds of and any unearned
premiums on any insurance policies covering the Property, including, without
limitation, the right to receive and apply the proceeds of any insurance
judgments, or settlements made in lieu thereof, for damage to the Property;

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

                  (l) RIGHTS. The right, in the name and on behalf of Borrower,
to commence any action or proceeding to protect the interest of Lender in the
Property and while an Event of Default (defined in Section 10.1) remains
uncured, to appear in and defend any action or proceeding brought with respect
to the Property;

                  (m) AGREEMENTS. All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land or in the Improvements and any
part thereof and all right, title and interest of Borrower therein and
thereunder, including, without limitation, the right, while an Event of Default
remains uncured, to receive and collect any sums payable to Borrower thereunder;

                  (n) INTANGIBLES. All accounts, escrows, chattel paper, claims,
deposits, trade names, trademarks, servicemarks, logos, copyrights, goodwill,
books and records and all other general intangibles specific to or used in
connection with the operation of the Property, if any; and

                  (o) CONVERSION. All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including, without limitation, proceeds of
insurance and condemnation awards, into cash or liquidation claims;

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                  (p) OTHER RIGHTS. Any and all other rights of Borrower in and
to the items set forth in Subsections (a) through (m) above.

         Section 1.2. ASSIGNMENT OF LEASES AND RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender Borrower's right, title and interest in
and to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of
this Section 1.2, Section 3.7 and the Assignment of Leases and Rents, Lender
grants to Borrower a revocable license to collect and receive the Rents.
Borrower shall hold the Rents, or a portion thereof, sufficient to discharge all
current sums due on the Debt, for use in the payment of such sums.

         Section 1.3. SECURITY AGREEMENT. This Security Instrument is both a
real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations (defined in
Section 2.3), a security interest in the Property to the full extent that the
Property may be subject to the Uniform Commercial Code (said portion of
the Property so subject to the Uniform Commercial Code, the "Collateral").

         Section 1.4. PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender,
and grants to Lender a security interest in, any and all monies now or hereafter
held by Lender, including, without limitation, any sums deposited in the Escrow
Fund (defined in Section 3.5) and the Net Proceeds (defined in Section 4.4), as
additional security for the Obligations until expended or applied as provided in
this Security Instrument.

                               CONDITIONS TO GRANT

         TO HAVE AND TO HOLD the above granted and described Property unto the
Lender and its successors and assigns, with power of sale in accordance with the
terms and conditions hereof, for the use and benefit of Lender, and the
successors and assigns of Lender, forever;

         PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note and this Security Instrument, shall well and truly
perform the Other Obligations as set forth in this Security Instrument and shall
well and truly abide by and comply with each and every covenant and condition
set forth herein and in the Note, these presents and the estate hereby granted
shall cease, terminate and be void.

                    ARTICLE 2 - DEBT AND OBLIGATIONS SECURED

         Section 2.1. DEBT. This Security Instrument and the grants, assignments
and transfers made in Article 1 are given for the purpose of securing the
following, in such order of priority as Lender may determine in its sole
discretion (the "Debt"):

                  (a) the payment of the indebtedness evidenced by the Note in
lawful money of the United States of America;

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<PAGE>

                  (b) the payment of interest at the Interest Rate (as defined
in the Note), interest at the Default Interest Rate (as defined in the Note),
late charges and other sums, as provided in the Note, this Security Instrument
or the other Security Documents (defined in Section 3.2);

                  (c) the payment of any prepayment consideration, defeasance
payment, exit fee or similar fees provided in the Note;

                  (d) the payment of all other monies agreed or provided to be
paid by Borrower in the Note, this Security Instrument or the other Security
Documents;

                  (e) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the security
interest created hereby; and

                  (f) the payment of all sums advanced and costs and expenses
incurred by Lender in connection with the Debt or any part thereof, any renewal,
extension, modification, consolidation, change, substitution, replacement,
restatement or increase of the Debt or any part thereof, or the acquisition or
perfection of the security therefor, whether made or incurred at the request of
Borrower or Lender.

         Section 2.2. OTHER OBLIGATIONS. This Security Instrument and the
grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "Other Obligations"):

                  (a) the performance of all other obligations of Borrower
contained herein;

                  (b) the performance of each obligation of Borrower contained
in the Note in addition to the payment of the Debt and of Borrower and of any
Guarantor (defined in Section 5.5) contained in the other Security Documents;
and

                  (c) the performance of each obligation of Borrower and any
Guarantor contained in any renewal, extension, modification, consolidation,
change, substitution, replacement for, restatement or increase of all or any
part of the Note, this Security Instrument or the other Security Documents.

         Section 2.3. DEBT AND OTHER OBLIGATIONS. Borrower's obligations for the
payment of the Debt and the performance of the Other Obligations shall be
referred to collectively below as the "Obligations."

         Section 2.4. PAYMENTS. Unless payments are made in the required amount
in immediately available funds at the place where the Note is payable,
remittances in payment of all or any part of the Debt shall not, regardless of
any receipt or credit issued therefor, constitute payment until the required
amount is actually received by Lender in funds immediately available at the
place where the Note is payable (or any other place as Lender, in Lender's sole
discretion, may have established by delivery of written notice thereof to
Borrower) and shall be made and accepted subject to the condition that any check
or draft may be handled for collection in accordance with the practice of the
collecting bank or banks. Acceptance by Lender of any payment in an amount less
than the amount then due shall be deemed an acceptance on account

                                       5
<PAGE>

only, and the failure to pay the entire amount then due shall be and continue
to be an Event of Default.

                         ARTICLE 3 - BORROWER COVENANTS

         Borrower covenants and agrees with Lender that:

         Section 3.1. PAYMENT OF DEBT. Borrower will pay the Debt at the time
and in the manner provided in the Note and in this Security Instrument.

         Section 3.2. INCORPORATION BY REFERENCE. All the covenants, conditions
and agreements contained in (a) the Note and (b) all and any of the documents
now or hereafter executed by Borrower and/or others and by or in favor of
Lender, which wholly or partially secure or guaranty payment of the Note or the
Other Obligations or are executed and delivered in connection with the Loan
(collectively, with the Note and this Security Instrument, the "Security
Documents"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.

         Section 3.3. INSURANCE.

                  (a) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least the
following coverages:

                      (i) PROPERTY INSURANCE. Insurance with respect to the
Improvements and building equipment insuring against any peril included within
the classification "Special Cause of Loss" (or something referred to as "All
Risks of Physical Loss"), together with a "Law and Ordinance Endorsement" if
under applicable zoning provisions the use of all or any portion of the Property
is or shall become a non-conforming use, in amounts at all times sufficient to
prevent Lender from becoming a co-insurer within the terms of the applicable
policies and under applicable law, but in any event such insurance shall be
maintained in an amount equal to the full insurable value of the Improvements
and building equipment, the term "full insurable value" to mean the actual
replacement cost of the Improvements and building equipment (without taking into
account any depreciation, and exclusive of excavations, footings and
foundations, landscaping and paving) determined annually by an insurer, a
recognized independent insurance broker or an independent appraiser selected and
paid by Borrower and in no event less than the coverage required pursuant to the
terms of any Lease. Absent such annual adjustment, each policy shall contain
inflation guard coverage insuring that the policy limit will be increased over
time to reflect the effect of inflation. Borrower shall also maintain insurance
against loss or damage to such furniture, furnishings, fixtures, equipment and
other items (whether personalty or fixtures) included in the Property and owned
by Borrower from time to time, to the extent applicable, in the amount of the
cost of replacing the same, in each case, with inflation guard coverage to
reflect the effect of inflation, or annual valuation. Each policy or policies
shall contain a replacement cost endorsement and either an agreed amount
endorsement (to avoid the operation of any co-insurance provisions) or a waiver
of any co-insurance provisions, all subject to Lender's approval. The maximum
deductible shall be $10,000.00;

                      (ii) LIABILITY INSURANCE. Comprehensive general liability
insurance, including personal injury, bodily injury, death and property damage
liability, insurance against

                                       6
<PAGE>

any and all claims, including all legal liability to the extent insurable and
imposed upon Lender and all court costs and attorneys' fees and expenses,
arising out of or connected with the possession, use, leasing, operation,
maintenance or condition of the Property in such amounts as are generally
available at commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Property but in no event
for a combined single limit of less than $5,000,000. During any construction of
the Property, Mortgagor's general contractor for such construction shall also
provide the insurance required in this Section 3.3(a)(ii). Lender hereby retains
the right to periodically review the amount of said liability insurance being
maintained by Borrower and to require an increase in the amount of said
liability insurance should Lender deem an increase to be reasonably prudent
under then existing circumstances, provided such increase is commercially
reasonable and reflects the amount generally required by institutional lenders
for property comparable to the Property;

                      (iii) WORKERS' COMPENSATION INSURANCE. Statutory workers'
compensation insurance with respect to any work on or about the Property
covering all persons subject to the workers' compensation laws of the state in
which the Property is located;

                      (iv) BUSINESS INTERRUPTION INSURANCE. Business
interruption and/or loss of "rental income" insurance in an amount sufficient to
avoid any co-insurance penalty and to provide proceeds which will cover a period
of not less than eighteen (18) months from the date of casualty or loss with a
six month extended period of indemnity, the term "rental income" to mean the sum
of (A) the total then ascertainable Rents payable under the Leases and (B) the
total ascertainable amount of all other amounts to be received by Borrower from
third parties which are the legal obligation of the tenants, reduced to the
extent such amounts would not be received because of operating expenses not
incurred during a period of non-occupancy of that portion of the Property then
not being occupied. The amount of coverage shall be adjusted annually to reflect
the rents payable during the succeeding twelve (12) month period.

                      (v) BOILER AND MACHINERY INSURANCE. Broad form boiler and
machinery insurance (without exclusion for explosion) covering all boilers or
other pressure vessels, machinery, and equipment located in, on or about the
Property and insurance against loss of occupancy or use arising from any
breakdown in such amount per accident equal to the replacement value of the
improvements housing the machinery or $2,000,000 or such other amount reasonably
determined by Lender. If one or more large HVAC units is in operation at the
Property, "System Breakdowns" coverage shall be required, as determined by
Mortgagee. Minimum liability coverage per accident must equal the value of such
unit(s);

                      (vi) FLOOD INSURANCE. If required by Subsection 5.6(a)
hereof, flood insurance in an amount at least equal to the greater of (A) the
replacement value of the Property including business interruption coverage; or
(B) the maximum insurance available under the appropriate National Flood
Insurance Administration program. The deductible may not exceed $25,000;

                      (vii) During the period of any construction, renovation or
alteration of the Improvements which exceeds the lesser of 10% of the principal
amount of the Note or $500,000, at Lender's request, a completed value, "All
Risk" or "Special Cause of Loss", as applicable, Builder's Risk form, or "Course
of Construction" insurance policy in non-reporting

                                       7
<PAGE>

form for any Improvements under construction, renovation or alteration in an
amount approved by Lender, which amount is generally required by commercial
lenders for similar property, may be required. During the period of any
construction of any addition to the existing Improvements, a completed value,
"All Risk" or "Special Cause of Loss", as applicable, Builder's Risk form or
"Course of Construction" insurance policy in non-reporting form, in an amount
approved by Lender, shall be required; and

                      (viii) OTHER INSURANCE. Such other insurance with respect
to the Property or on any replacements or substitutions thereof or additions
thereto as may from time to time be reasonably required by Lender against other
insurable hazards or casualties which at the time are commonly insured against
in the case of property similarly situated, including, without limitation,
sinkhole, mine subsidence, earthquake and environmental insurance, due regard
being given to the height and type of buildings, their construction, location,
use and occupancy.

                  (b) All insurance provided for in Subsection 3.3(a) hereof
shall be for a term of not less than one (1) year and obtained under valid and
enforceable policies (the "Policies" or in the singular, the "Policy"), and
shall be issued by one or more domestic primary insurer(s) having (i) a
financial strength rating/claims paying ability rating (whichever term such
Rating Agency utilizes to assess the financial conditions of insurers for this
purpose) of not less than "AA" by Standard & Poor's Ratings Services ("S&P")
unless previously approved by Lender and an equivalent credit rating by one or
more credit rating agencies approved by Lender (each, a "Rating Agency"), (each
such insurer shall be referred to below as a "Qualified Insurer"). All insurers
providing insurance required by this Security Instrument shall be authorized to
issue insurance in the state in which the Property is located. The Policy
referred to in Subsection 3.3(a)(ii) above shall name Lender as an additional
named insured and the Policy referred to in Subsection 3.3(a)(i), (iv), (v) and
(vi) above shall provide that all proceeds be payable to Lender as set forth in
Section 4.4 hereof. The Policies referred to in Subsections 3.3(a)(i), (v) and
(vi) shall also contain: (i) a standard "non-contributory mortgagee" endorsement
or its equivalent relating, inter alia, to recovery by Lender notwithstanding
the negligent or willful acts or omission of Lender, (ii) to the extent
available at commercially reasonable rates, a waiver of subrogation endorsement
as to Lender, and (iii) to the extent a specific deductible is not set forth in
this Security Instrument, an endorsement providing for deductibles per loss of
an amount not more than that which is customarily maintained by prudent owners
of similar properties in the general vicinity of the Property. All Policies
described in Subsection 3.3(a) above shall contain (i) a provision that such
Policies shall not be cancelled or terminated, nor shall they expire, without at
least thirty (30) days' prior written notice to Lender in each instance; and
(ii) include effective waivers by the insurer of all claims for Insurance
Premiums (defined below) against any mortgage, loss payees, additional insureds
and named insureds (other than Borrower). In the event that the Property or the
Improvements constitutes a legal non-conforming use under applicable building,
zoning or land use laws or ordinances, the policy shall include an ordinance or
law coverage endorsement which will contain Coverage A: "Loss Due to Operation
of Law" (with a minimum liability limit equal to Replacement Cost With Agreed
Value Endorsement), Coverage B: "Demolition Cost" and Coverage C: "Increased
Cost of Construction" coverages. Certificates of insurance with respect to all
renewal and replacement Policies shall be delivered to Lender not less than
thirty (30) days prior to the expiration date of any of the Policies required to
be maintained hereunder which certificates shall bear notations evidencing
payment of applicable premiums (the "Insurance Premiums"). Originals or
certificates of such replacement

                                       8
<PAGE>

Policies shall be delivered to Lender promptly after Borrower's receipt thereof
but in any case within thirty (30) days after the effective date thereof. If
Borrower fails to maintain and deliver to Lender the original Policies or
certificates of insurance required by this Security Instrument, upon ten (10)
days' prior notice to Borrower, Lender may procure such insurance at Borrower's
sole cost and expense.

                  (c) Borrower shall comply with all insurance requirements and
shall not bring or keep or permit to be brought or kept any article upon any of
the Property or cause or permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would invalidate the insurance
coverage required hereunder to be maintained by Borrower on or with respect to
any part of the Property pursuant to this Section 3.3 or take any action that
might invalidate or give cause for cancellation of any Policy.

                  (d) The insurance coverage required under Section 3.3(a) may
be effected under a blanket policy or policies covering the Property and other
properties and assets not constituting a part of the security hereunder;
provided that any such blanket policy shall specify, except in the case of
public liability insurance, the portion of the total coverage of such policy
that is allocated to the Property, and any sublimit in such blanket policy
applicable to the Property, and shall in any case comply in all other respects
with the requirements of this Section 3.3.

                  (e) The insurance coverage required under Subsection
3.3(a)(ii) may be satisfied by a layering of Commercial General Liability,
Umbrella and Excess Liability Policies, but in no event will the Commercial
General Liability policy be written for an amount less than $1,000,000 per
occurrences and $2,000,000 aggregate for bodily injury and property damage
liability. Lender may require umbrella coverage provided premiums for such
coverage are commercially reasonably and such coverage is generally required by
commercial leaders for similar property.

                  (f) The delivery to Lender of the insurance policies or the
certificates of insurance as provided above shall constitute an assignment of
all proceeds payable under such insurance as relating to the Property by
Borrower to Lender as further security for the indebtedness secured hereby. In
the event of foreclosure of this Security Instrument, or other transfer of title
to the Property in extinguishment in whole or in part of the secured
indebtedness, all right, title and interest of Borrower in and to all proceeds
payable under such policies then in force concerning the Property shall
thereupon vest in the purchaser at such foreclosure, or in Lender or other
transferee in the event of such other transfer of title. Approval of any
insurance by Lender shall not be a representation of the solvency of any insurer
or the sufficiency of any amount of insurance.

                  (g) Lender shall not be responsible for nor incur any
liability for the insolvency of the insurer or other failure of the insurer to
perform, even though Lender has caused the insurance to be placed with the
insurer after failure of Borrower to furnish such insurance. Borrower shall not
obtain insurance for the Property in addition to that required by Lender without
the prior written consent of Lender, which consent will not be unreasonably
withheld provided that (i) Lender is named an additional insured on such
insurance, (ii) Lender

                                       9
<PAGE>

receives complete copies of all policies evidencing such insurance, and (iii)
such insurance complies with all of the applicable requirements set forth
herein.

         Section 3.4. PAYMENT OF TAXES, ETC. (a) Borrower shall pay by their due
date all taxes, assessments, water rates, sewer rents, governmental impositions,
and other charges, including, without limitation, vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, now or
hereafter levied or assessed or imposed against the Property or any part thereof
(the "Taxes"), all ground rents, maintenance charges and similar charges, now or
hereafter levied or assessed or imposed against the Property or any part thereof
(the "Other Charges"), and all charges for utility services provided to the
Property as same become due and payable provided Borrower shall not be in
default hereunder as long as such Taxes and Other Charges are paid on or before
the day before such Taxes or Other Charges are deemed delinquent or fees,
interest or other charges accrue thereon. Borrower will deliver to Lender,
promptly upon Lender's request, evidence satisfactory to Lender that the Taxes,
Other Charges and utility service charges have been so paid or are not then
delinquent. Borrower shall not suffer and shall promptly cause to be paid and
discharged any lien or charge whatsoever which may be or become a lien or charge
against the Property except for such licenses and charges which are not yet due
and payable or delinquent. Except to the extent sums sufficient to pay all Taxes
and Other Charges have been deposited with Lender in accordance with the terms
of this Security Instrument, Borrower shall furnish to Lender paid receipts for
the payment of the Taxes and Other Charges prior to the date the same shall
become delinquent.

                  (b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Taxes or Other Charges, provided
that (i) no Event of Default has occurred and is continuing under the Note, this
Security Instrument or any of the other Security Documents, (ii) Borrower is
permitted to do so under the provisions of any other mortgage, deed of trust or
deed to secure debt affecting the Property, if any, (iii) such proceeding shall
suspend the collection of the Taxes or Other Charges from Borrower and from the
Property or Borrower shall have paid all of the Taxes or Other Charges under
protest, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (v) neither the Property
nor any part thereof or interest therein will be in danger of being sold,
forfeited, terminated, cancelled or lost, (vi) Borrower shall have set aside
adequate reserves for the payment of the Taxes or Other Charges, together with
all interest and penalties thereon, unless Borrower has paid all of the Taxes or
Other Charges under protest, and (vii) Borrower shall have furnished the
security as may be required in the proceeding, or as may be reasonably requested
by Lender to insure the payment of any contested Taxes or Other Charges,
together with all interest and penalties thereon, taking into consideration the
amount in the Escrow Fund available for payment of Taxes or Other Charges;
provided, however, after a Securitization, the amount delivered to Lender shall
be equal to one hundred and twenty-five percent (125%) of the contested amount.

         Section 3.5. ESCROW FUND. Borrower shall establish with Lender an
Escrow Fund (defined below) sufficient to discharge its obligations for the
payment of Insurance Premiums, unless the Property is insured under a blanket
policy pursuant to Section 3.3(d), and Taxes pursuant to Sections 3.3 and 3.4
hereof. Initial deposits of Taxes and Insurance Premiums shall

                                       10
<PAGE>

be made by Borrower to Lender in amounts determined by Lender in its discretion
on the date hereof to be held by Lender in escrow. Additionally, Borrower shall
pay to Lender on the fifth day of each calendar month (a) one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or estimated by
Lender to be payable, upon the due dates established by the appropriate taxing
authority during the next ensuing twelve (12) months and (b) unless the Property
is insured under a blanket policy, one-twelfth of an amount which would be
sufficient to pay the Insurance Premiums due for the renewal of the coverage
afforded by the Policies upon the expiration thereof (the initial deposits
together with the amounts in (a) and (b) above shall be called the "Escrow
Fund"). Borrower agrees to notify Lender immediately of any changes to the
amounts, schedules and instructions for payment of any Taxes and Insurance
Premiums of which it has obtained knowledge and authorizes Lender or its agent
to obtain the bills for Taxes and Other Charges directly from the appropriate
tax authority. The Escrow Fund and the payments of interest or principal, or
both, payable pursuant to the Note shall be added together and shall be paid as
an aggregate sum by Borrower to Lender. Provided there are sufficient amounts in
the Escrow Fund and no Event of Default exists, Lender shall be obligated to pay
the Taxes and Insurance Premiums as they become due on their prior to the date
they become delinquent, respectively, on behalf of Borrower by applying the
Escrow Fund to the payments of such Taxes and Insurance Premiums required to be
made by Borrower pursuant to Sections 3.3 and 3.4 hereof. If the amount of the
Escrow Fund shall exceed the amounts due for Taxes and Insurance Premiums
pursuant to Sections 3.3 and 3.4 hereof, Lender shall, in its discretion, return
any excess to Borrower or credit such excess against future payments to be made
to the Escrow Fund. In allocating such excess, Lender may deal with the person
shown on the records of Lender to be the owner of the Property. If the Escrow
Fund is not sufficient to pay the items set forth in (a) and (b) above, Borrower
shall promptly pay to Lender, upon demand, an amount which Lender shall
reasonably estimate as sufficient to make up the deficiency. The Escrow Fund
shall not constitute a trust fund and may be commingled with other monies held
by Lender.

         Section 3.6. CONDEMNATION. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such proceedings
to the extent permitted by law. Upon an Event of Default, Borrower shall deliver
to Lender all instruments requested by it to permit such participation. Borrower
shall, at its sole cost and expense, diligently prosecute any such proceedings,
and shall consult with Lender, its attorneys and experts, and cooperate with
them in the carrying on or defense of any such proceedings. Borrower shall not
make any agreement in lieu of condemnation of the Property or any portion
thereof without the prior written consent of Lender in each instance, which
consent shall not be unreasonably withheld or delayed. Notwithstanding any
taking by any public or quasi-public authority through eminent domain or
otherwise (including, but not limited to any transfer made in lieu of or in
anticipation of the exercise of such taking), and whether or not any award or
payment made in any condemnation or eminent domain proceeding is made available
to Borrower for Restoration, Borrower shall continue to pay the Debt at the time
and in the manner provided for its payment in the Note and in this Security
Instrument and the Debt shall not be reduced until any award or payment therefor
shall have been actually received and applied by Lender, after the deduction of
expenses of collection, to the reduction or discharge of the Debt without
penalty for prepayment to Borrower. Lender shall not be limited to the interest
paid on the award by the condemning authority but shall be entitled to receive
out of the award interest at the rate or rates provided herein or in the

                                       11
<PAGE>

Note. If the Property or any portion thereof is taken by the power of eminent
domain, Borrower shall promptly commence and diligently prosecute the
Restoration of the Property and otherwise comply with the provisions of in
accordance with Section 4.4 of this Security Instrument. If the Property is
sold, through foreclosure or otherwise, prior to the receipt by Lender of the
award or payment, Lender shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or denied, to receive the
award or payment, or a portion thereof sufficient to pay the Debt.

         Section 3.7. Leases and Rents.

                  (a) Except as otherwise consented to by Lender, all Leases
shall be written on a standard form of lease which shall have been approved by
Lender. If Lender does not approve or disapprove a proposed Lease, within twenty
(20) days after Lender's receipt thereof, Borrower shall provide Lender with
notice stating in bold print that Lender's approval or disapproval is required
within ten (10) days after Lender's receipt of such notice. If Lender does not
provide its approval or disapproval within said ten (10) day period, such
proposed Lease shall be deemed approved. Upon request, Borrower shall furnish
Lender with executed copies of all Leases. No material changes may be made to
the Lender-approved standard lease without the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed. If Lender does not
approve or disapprove of such proposed changes, within twenty (20) days after
Lender's receipt thereof, Borrower shall provide Lender with notice stating in
bold print that Lender's approval or disapproval is required within ten (10)
days after Lender's receipt of such notice. If Lender does not provide its
approval or disapproval within said ten (10) day period, such proposed changes
shall be deemed approved. Borrower may enter into a proposed Lease without
Lender's prior written consent provided that such proposed Lease (i) is on the
same standard form of lease which has been approved by Lender except Lender's
consent will not be required for non-material, non-adverse changes, (ii) is the
result of an arms-length transaction, (iii) provides for rental rates comparable
to existing market rates, (iv) involves space to be leased less than ten percent
(10%) of total rentable space of the Property, (v) involves a proposed tenant
which is an independent third party not affiliated with the Borrower, (vi) does
not contain any terms which would materially and adversely affect Lender's
rights under this Security Instrument, the Note or the other Security Documents,
and (vii) is not a Major Lease. For purposes hereof, a "Major Lease" shall mean
any Lease (i) covering more than 20,000 square feet of rentable space of the
Property, or (ii) which has a term of more than five (5) years. Moreover, for
purposes of calculating the 20,000 square footage test in the immediately
preceding sentence, Lender may, in Lender's sole discretion, aggregate any and
all Leases to affiliated entities to determine whether such Leases should be
treated as one or more Major Lease.

                  (b) Borrower (i) shall observe and perform all the obligations
imposed upon the lessor under the Leases if the failure to perform or observe
the same would materially and adversely affect the value of the Property taken
as a whole and shall not do or permit to be done anything to materially impair
the value of the Leases as security for the Debt; (ii) shall promptly send
copies to Lender of all notices of default which Borrower shall send or receive
thereunder; (iii) shall enforce in a commercially reasonable manner all of the
terms, covenants and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed; (iv) shall not collect any of the
Rents more than one (1) month in advance (provided

                                       12
<PAGE>

that a security deposit shall not be deemed rent collected in advance); (v)
shall not execute any other assignment of the lessor's interest in the Leases or
the Rents; (vi) shall not (A) materially and adversely alter, modify or change
the terms of the Leases with respect to the obligations or duties of the parties
without the prior written consent of Lender, which consent shall not be
unreasonably withheld or delayed if the alteration, modification or change does
not materially and adversely affect the value of the Property taken as a whole
and provided further that such Lease, as altered, modified or changed, is
otherwise in compliance with the requirements of this Security Instrument,
provided that, if Lender does not approve or disapprove of such proposed
changes, within twenty (20) days after Lender's receipt thereof, Borrower shall
provide Lender with notice stating in bold print that Lender's approval or
disapproval is required within ten (10) days after Lender's receipt of such
notice, and if Lender does not provide its approval or disapproval within said
ten (10) day period, such proposed changes shall be deemed approved, or (B)
cancel or terminate any Lease (except for defaults thereunder) of more than ten
(10%) percent of the rentable space of the Property or accept a surrender
thereof or convey or transfer or suffer or permit a conveyance or transfer of
the Land or of any interest therein so as to effect a merger of the estates and
rights of, or a termination or diminution of the obligations of, lessees
thereunder; (vii) shall not alter, modify or change the terms of any guaranty,
letter of credit or other credit support with respect to the Leases (the "Lease
Guaranty") or cancel or terminate such Lease Guaranty without the prior written
consent of Lender; and (viii) shall not consent to any assignment of or
subletting under the Leases not in accordance with their terms, without the
prior written consent of Lender, provided that, if Lender does not approve or
disapprove of such proposed assignment or subletting, within twenty (20) days
after Lender's receipt thereof, Borrower shall provide Lender with notice
stating in bold print that Lender's approval or disapproval is required within
ten (10) days after Lender's receipt of such notice, and if Lender does not
provide its approval or disapproval within said ten (10) day period, such
proposed assignment or subletting shall be deemed approved.

         Section 3.8. MAINTENANCE OF PROPERTY. Borrower shall cause the Property
to be maintained in a good and safe condition and repair. The Improvements and
the Personal Property shall not be removed, demolished or materially altered
(except for normal replacement of the Personal Property or tenant upfits as
required under the Lease) without the prior written consent of Lender, which
shall not be unreasonably withheld or delayed. Borrower shall promptly repair,
replace or rebuild any part of the Property which may be destroyed by any
casualty, or become damaged, worn or dilapidated or which may be affected by any
proceeding of the character referred to in Section 3.6 hereof and shall complete
and pay for any structure at any time in the process of construction or repair
on the Land. Borrower shall not initiate, join in, acquiesce in, or consent to
any change in any private restrictive covenant (unless such change results in
the removal of the restrictive covenants imposed on the Property at the request
of Lowe's Inc.), zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Property or any part thereof. If
under applicable zoning provisions the use of all or any portion of the Property
is or shall become a nonconforming use, Borrower will not cause or permit the
nonconforming use or Improvement to be discontinued or abandoned without the
express written consent of Lender.

         Section 3.9. WASTE. Borrower shall not commit or suffer any waste of
the Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might

                                       13
<PAGE>

invalidate or give cause for cancellation of any Policy, or do or permit to be
done thereon anything that may in any way impair the value of the Property or
the security of this Security Instrument. Borrower will not, without the prior
written consent of Lender, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of the
Land, regardless of the depth thereof or the method of mining or extraction
thereof.

         Section 3.10. COMPLIANCE WITH LAWS.

                  (a) Borrower shall promptly comply with all existing and
future federal, state and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting the Property, or the use thereof
including, but not limited to, the Americans with Disabilities Act ("ADA")
(collectively, "Applicable Law").

                  (b) Borrower shall from time to time, upon Lender's request,
provide Lender with evidence reasonably satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with Applicable
Laws.

                  (c) Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property, Borrower
shall not alter the Property in any manner which would (i) materially increase
Borrower's responsibilities for compliance with Applicable Laws, (ii) materially
and adversely affect (x) Borrower's financial condition, (y) the value of the
Property or (z) the operating income from the Property, without the prior
written approval of Lender, which shall not be unreasonably withheld or delayed.
Lender's approval of the plans, specifications, or working drawings for
alterations of the Property shall create no responsibility or liability on
behalf of Lender for their completeness, design, sufficiency or their compliance
with Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Lender may condition any such
approval upon receipt of a certificate of compliance with Applicable Laws from
an independent architect, engineer, or other person acceptable to Lender.

                  (d) Borrower shall give prompt notice to Lender of the receipt
by Borrower of any notice related to a violation of any Applicable Laws and of
the commencement of any proceedings or investigations which relate to compliance
with Applicable Laws.

                  (e) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the Applicable Laws affecting
the Property, provided that (i) no Event of Default has occurred and is
continuing under the Note, this Security Instrument or any of the Other Security
Documents; (ii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder; (iii) neither the
Property nor any part thereof or interest therein nor any of the tenants or
occupants thereof shall be affected in any material adverse way as a result of
such proceeding; (iv) Borrower shall have furnished to Lender all other items
reasonably requested by Lender; and (v) Borrower shall have furnished to Lender
additional security in respect of the claim being contested or the loss or
damage that may result from Borrower's failure to prevail in such contest in an
amount as may be reasonably requested by

                                       14
<PAGE>

Lender in light of the risk associated with such contest; provided, however,
after a Securitization, the amount delivered to Lender shall be equal to but no
more than one hundred and twenty-five percent (125%) of the contested amount.

         Section 3.11. BOOKS AND RECORDS. (a) Borrower shall keep, and shall
cause Guarantors and Indemnitors to keep, adequate books and records of account
in accordance with generally accepted accounting principles:

                  (i) quarterly certified rent rolls signed and dated by
Borrower, detailing the names of all tenants of the Improvements, the portion of
Improvements occupied by each tenant, the base rent and any other charges
payable under each Lease and the term of each Lease, including the expiration
date, and any other information as is reasonably required by Lender, within
forty-five (45) days after the end of each fiscal quarter;

                  (ii) a quarterly operating statement of the Property detailing
the total revenues received, total expenses incurred, total cost of all capital
improvements, total debt service and total cash flow, together with a balance
sheet for such quarter, to be prepared and certified by Borrower in a form
acceptable to by Lender, and if available, any quarterly operating statement
and/or balance sheet prepared by an independent certified public accountant
within forty-five (45) days after the close of each fiscal quarter.

                  (iii) an annual balance sheet and profit and loss statement of
Borrower, any Guarantors and any Indemnitors, in a form acceptable to by Lender,
prepared and certified by the respective Borrower, Guarantor and/or Indemnitor,
as applicable, within ninety (90) days after the close of each fiscal year;

                  (iv) an annual certified rent roll presented on a quarterly
basis consistent with the quarterly certified rent rolls described above within
ninety (90) days after the close of each fiscal year;

                  (v) an annual operating budget presented on a monthly basis
consistent with the annual operating statement described above for the Property
and all proposed capital replacements and improvements at least thirty (30) days
prior to the start of each calendar year; and

                  (vi) such other financial statements, including monthly
operating statements and rent rolls, as Lender may reasonably request.

         (b) Upon reasonable request from Lender, Borrower shall furnish to
Lender:

                  (i) a property management report for the Property, showing the
number of inquiries made and/or rental applications received from tenants or
prospective tenants and deposits received from tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower under
penalty of perjury to be true and complete, but no more frequently than
quarterly; and

                  (ii) an accounting of all security deposits held in connection
with any Lease of any part of the Property, including the name and
identification number of the accounts

                                       15
<PAGE>

in which such security deposits are held, the name and address of the financial
institutions in which such security deposits are held and the name of the person
to contact at such financial institution, along with any authority or release
necessary for Lender to obtain information regarding such accounts directly from
such financial institutions.

         (c) Borrower shall furnish, and shall cause any Guarantor and
Indemnitor to furnish, Lender with such other additional financial or management
information as may, from time to time, be reasonably required by Lender in form
and substance satisfactory to Lender.

         (d) In the event (i) Borrower fails to timely provide any of the
reports, information, statements or other materials referred to above for ten
(10) days after written demand from Lender, or (ii) Borrower knowingly delivers
reports, information, statements or other materials that are inaccurate or false
in any material respect, or (iii) Borrower fails to permit Lender or its
representatives to inspect such party's books and records within five (5) days
of Lender's request (which may be made no more than once per quarter unless
there is an Event of Default, in which case there shall be no limitation on the
number or frequency of such requests), then for so long as each such occurrence
described in the foregoing clauses (i) through (iii) exists (each, a "Data
Failure") and in addition to Lender's other remedies hereunder and in the other
Security Documents, Borrower shall be obligated (x) to pay at the start of each
week for the first ten (10) weeks that any Data Failure exists, a data failure
fee in the amount of One Thousand Dollars ($1,000) per week, which amount shall
be immediately due and payable to Lender; and (y) to pay, in the event that a
Data Failure has previously occurred ten (10) times while the Loan is
outstanding, a fee equal to the greater of 0.25% of the outstanding principal
balance of the loan or Fifty Thousand Dollars ($50,000) for the next Data
Failure; provided, further, in the event a Data Failure occurs on twelve (12)
occasions, the Borrower acknowledges and agrees that the occurrence of Data
Failures on a repeated basis shall cause Lender to suffer costs and damages that
are difficult, if not impossible, to measure, and as such, notwithstanding
anything to the contrary set forth herein, in addition to payment of the
foregoing fee, Borrower acknowledges that the next Data Failure shall constitute
a material breach of this Security Instrument and Lender shall have the right,
at its option, to immediately exercise any and all remedies available to Lender
under the terms of the Security Documents without any further notice, grace or
cure period.

         Section 3.12. PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never permit
to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof, except for
the Permitted Exceptions (defined in Section 5.1).

         Section 3.13. PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe
and perform each and every term to be observed or performed by Borrower pursuant
to the terms of any agreement or recorded instrument affecting or pertaining to
the Property.

         Section 3.14. CHANGE OF NAME, IDENTITY OR STRUCTURE. Subject to
transfers permitted pursuant to Section 8.1 and 8.2 of this Security Agreement,
Borrower will not change

                                       16
<PAGE>

Borrower's name, identity (including its trade name or names) or, if not an
individual, Borrower's corporate, partnership or other structure without
notifying the Lender of such change in writing at least thirty (30) days prior
to the effective date of such change and, in the case of a change in Borrower's
structure, without first obtaining the prior written consent of the Lender.

         Section 3.15. EXISTENCE. Borrower will continuously maintain (a) its
existence and shall not dissolve or permit its dissolution, (b) its rights to do
business in the state where the Property is located and (c) its franchises and
trade names.

                         ARTICLE 4 - SPECIAL COVENANTS

         Borrower covenants and agrees with Lender that:

         Section 4.1. PROPERTY USE. The Property shall be used only as a
Shopping Center for retail and office space and such activities generally
undertaken in connection with those businesses and for no other use without the
prior written consent of Lender, which consent shall not be unreasonably
withheld or delayed.

         Section 4.2. ERISA. It shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Security Instrument and the
other Security Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").

                  (a) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term of
this Security Instrument, as requested by Lender in its sole discretion, that
(i) Borrower is not an "employee benefit plan" as defined in Section 3(32) of
ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(32) of ERISA; (ii) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances is
true:

                           (A) Equity interests in Borrower are publicly offered
                           securities, within the meaning of 29 C.F.R.ss.
                           2510.3-101(b)(2);

                           (B) Less than 25 percent of each outstanding class of
                           equity interests in Borrower are held by "benefit
                           plan investors" within the meaning of 29 C.F.R.ss.
                           2510.3-101(f)(2); or

                           (C) Borrower qualifies as an "operating company" or a
                           "real estate operating company" within the meaning of
                           29 C.F.R. ss. 2510.3-101(c) or (e) or an investment
                           company registered under The Investment Company Act
                           of 1940.

         Section 4.3. SINGLE PURPOSE ENTITY.

                  (a) Borrower represents and warrants it has not at any time
since its formation, and further covenants that it shall not at any time when
the Loan is outstanding:

                                       17
<PAGE>

                      (i) engage in any business or activity other than the
ownership, operation and maintenance of the Property, and activities incidental
thereto;

                      (ii) acquire or own any assets other than (A) the
Property, and (B) such incidental Personal Property as may be necessary for the
operation of the Property;

                      (iii) merge into or consolidate with any person or entity
or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change its legal
structure;

                      (iv) fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable) under the laws
of the jurisdiction of its organization or formation, amend, modify, terminate
or fail to comply with the single purpose entity provisions contained in
Borrower's Partnership Agreement, Articles or Certificate of Incorporation,
Operating Agreement or similar organizational documents, as the case may be, as
same may be further amended or supplemented;

                      (v) own any subsidiary or make any investment in, any
person or entity without the consent of Lender;

                      (vi) commingle its assets with the assets of any other
person or entity;

                      (vii) incur any debt, secured or unsecured, direct or
contingent (including guaranteeing any obligation), other than (A) the Debt and
(B) customary unsecured trade payables incurred in the ordinary course of
business relating to the ownership and operation of the Property, provided the
same (x) do not exceed, in the aggregate, at any time a maximum amount of two
percent (2%) of the outstanding Loan Amount; and (y) are paid within sixty (60)
days of the date incurred;

                      (viii) fail to maintain its records, books of account,
bank accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other person or entity;

                      (ix) enter into any contract or agreement with any general
partner, member, shareholder, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, member, principal or affiliate thereof,
except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms-length basis with third
parties other than any general partner, member, shareholder, principal or
affiliate of Borrower, Guarantor or Indemnitor, or any general partner, member,
principal or affiliate thereof;

                      (x) maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any general partner, member, shareholder, principal or affiliate
of Borrower, or any general partner, member, shareholder, principal or affiliate
thereof or any other person or entity;

                      (xi) assume or guaranty the debts of any other entity or
person, hold itself out to be responsible for the debts of another person, or
otherwise pledge its assets for the

                                       18
<PAGE>

benefit of any other person or entity or hold out its credit as being available
to satisfy the obligations of any other person or entity;

                      (xii) make any loans or advances to any third party,
including any general partner, member, shareholder, principal or affiliate of
Borrower, or any general partner, principal or affiliate thereof;

                      (xiii) fail to file its own tax returns;

                      (xiv) fail either to hold itself out to the public as a
legal entity separate and distinct from any other entity or person or to conduct
its business solely in its own name or fail to correct any known
misunderstanding regarding its separate identity;

                      (xv) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations;

                      (xvi) without the unanimous written consent of all
Borrower's partners or members, as applicable and the written consent of 100% of
the members of the board of directors of the SPE Member, including without
limitation the Independent Director: (a) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization statute; (b) seek or
consent to the appointment of a receiver, liquidator or any similar official; or
(c) make an assignment for the benefit of creditors;

                      (xvii) fail to allocate shared expenses (including,
without limitation, shared office space) and to use separate stationery,
invoices and checks;

                      (xviii) fail to pay (or cause the manager of the Property
to pay on behalf of the Borrower) its own liabilities (including, without
limitation, salaries of its own employees) from its own funds; and

                      (xix) acquire obligations or securities of its partners,
members or shareholders, as applicable.

                  (b) If Borrower is a limited partnership or a limited
liability company, each general partner in the case of a partnership or at least
one member in the case of a limited liability company (the "SPE Member") of
Borrower, as applicable, shall be a corporation whose sole asset is its interest
in Borrower and each SPE Member (i) will at all times comply with each of the
covenants, terms and provisions contained in Section 4.3(a)(iii) - (vi) and
(viii) - (xix), as if such representation, warranty or covenant were made
directly by such SPE Member; (ii) will not engage any business or activity other
than owning an interest in Borrower, (iii) will not acquire or own any assets
other than its partnership, membership, or other equity interest in Borrower,
(iv) will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation) other than unsecured trade payables
incurred in the ordinary course of business related to the ownership of an
interest in Borrower that (x) do not exceed, in the aggregate, at any one time
$10,000, and (y) are paid within sixty (60) days after the date

                                       19
<PAGE>

incurred; and (v) will cause the respective Borrower to comply with the
provisions of this Section 4.3.

                  (c) Borrower shall at all times cause there to be at least one
duly appointed member of the board of directors (an "Independent Director") of
the SPE Member reasonably satisfactory to Lender who shall not have been at the
time of such individual's initial appointment, and may not have been at any time
during the preceding five years, and shall not be at any time while serving as a
director of the SPE Member either (i) a shareholder of, or an officer, director,
partner or employee of, Borrower or SPE Member or any of their respective
shareholders, partners, members, subsidiaries or affiliates, (ii) a customer of,
or supplier to, Borrower or SPE Member or any of their respective shareholders,
partners, members, subsidiaries or affiliates, (iii) a person or other entity
controlling or under common control with any such shareholder, officer,
director, partner, member, employee, supplier or customer, or (iv) a member of
the immediate family of any such shareholder, officer, director, partner,
member, employee, supplier or customer. As used herein, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policy of a person or entity, whether through
ownership of voting securities, by contract or otherwise.

                  (d) Borrower shall not cause or permit the board of directors
of the SPE Member to take any action which, under the terms of any certificate
of incorporation, bylaws or any voting trust agreement with respect to any
common stock, requires a vote of the board of directors of the SPE Member unless
at the time of such action there shall be at least one member of the board of
directors who is an Independent Director.

                  (e) Borrower shall not permit Guarantor to incur any debt
(including guaranteeing any obligation) which is secured by a pledge of
Guarantor's membership or other equity interests in Borrower or SPE Member.

                  (f) Borrower acknowledges and agrees that covenants,
representations and warranties set forth in certain certificates being delivered
in connection with the nonconsolidation opinion given by Kennedy Covington
Lodbell & Hickman, L.L.P. in connection with the Loan (the "Certificates"), as
well as the assumptions contained in said opinion, are true, complete and
correct. Borrower further acknowledges that Lender is intended to be a third
party beneficiary of the Certificates. Any material breach of any of the
covenants, representations or warranties set forth in the Certificates or any
material inaccuracy of any of the assumptions in the nonconsolidation opinion
referenced herein shall be an Event of Default under this Security Instrument.

         Section 4.4. RESTORATION AFTER CASUALTY/CONDEMNATION. In the event of a
casualty or a taking by eminent domain, Borrower shall give Lender prompt notice
of such damage and the following provisions shall apply in connection with the
repair and restoration ("Restoration) of the Property:

                  (a) If (i) the Net Proceeds (defined below) do not exceed
$250,000 ("Casualty Amount"); (ii) the costs of completing the Restoration as
reasonably estimated by Borrower shall be less than or equal to the Casualty
Amount; (iii) no Event of Default shall have occurred and be continuing under
the Note, this Security Instrument or any of the other Security Documents;

                                       20
<PAGE>

(iv) the Property and the use thereof after the Restoration will be in
compliance with, and permitted under, all applicable zoning laws, ordinances,
rules and regulations (including, without limitation, all applicable
Environmental Laws (defined in Section 12.1); and (v) such fire or other
casualty or taking, as applicable, does not materially impair access to the
Property or the Improvements, then the Net Proceeds will be disbursed directly
to Borrower and Borrower shall commence and diligently prosecute to completion,
subject to Force Majeure (defined herein), the Restoration of the Property to as
nearly as possible the condition it was in immediately prior to such fire or
other casualty or to such taking. Except upon the occurrence and continuance of
an Event of Default, Borrower shall settle any insurance claims with respect to
the Net Proceeds which in the aggregate are less than or equal to the Casualty
Amount. Lender shall have the right to participate in and reasonably approve any
settlement for insurance claims with respect to the Net Proceeds which in the
aggregate are equal to or greater than the Casualty Amount, provided that
Lender's approval shall not be unreasonably withheld or delayed. If an Event of
Default shall have occurred and be continuing, Borrower hereby irrevocably
empowers Lender, in the name of Borrower as its true and lawful
attorney-in-fact, to file and prosecute such claim and to collect and to make
receipt for any such payment. If the Net Proceeds are received by Borrower, such
Net Proceeds shall, until the completion of the related work, be held in trust
for Lender and shall be segregated from other funds of Borrower to be used to
pay for the cost of the Restoration in accordance with the terms hereof.

                  (b) If the Net Proceeds are greater than the Casualty Amount,
such Net Proceeds shall, subject to the provisions of the Leases that are
superior to the lien of this Security Instrument or with respect to which
subordination, non-disturbance agreements binding upon Lender have entered into
concerning the deposits of Net Proceeds, be forthwith paid to Lender to be held
by Lender in a segregated account to be made available to Borrower for the
Restoration in accordance with the provisions of this Subsection 4.4(b).
Borrower shall commence and diligently prosecute to completion, subject to Force
Majeure (defined below), the Restoration (in the case of a taking, to the extent
the Property is capable of being restored). The term "Net Proceeds" for purposes
of this Section 4.4 shall mean: (i) the net amount of all insurance proceeds
received by Lender under the Policies carried pursuant to Subsections 3.3(a)(i),
(iv), (v), (vi) and (vii) of this Security Instrument as a result of such damage
or destruction, after deduction of its reasonable costs and expenses (including,
but not limited to reasonable counsel fees), if any, in collecting the same, or
(ii) the net amount of all awards and payments received by Lender with respect
to a taking referenced in Section 3.6 of this Security Instrument, after
deduction of its reasonable costs and expenses (including, but not limited to
reasonable counsel fees), if any, in collecting the same, whichever the case may
be. The term "Force Majeure" for the purpose of this Section 4.4 shall have the
following meaning: Borrower shall be excused for the period of any delay in the
performance of any obligations hereunder when prevented from so doing by cause
or causes beyond Borrower's control such as, without limitation, all labor
disputes, civil commotion, war, war-like operations, invasion, rebellion,
hostilities, military or usurped power, sabotage, governmental regulations or
controls, fire or other casualty, inability to obtain any materials or services,
and acts of God.

                  (c) If the Net Proceeds are greater than the Casualty Amount,
the Net Proceeds shall be made available to Borrower for payment of, or
reimbursement of Borrower's expenses in connection with, the Restoration,
subject to the following conditions:


                                       21
<PAGE>

                      (i) no Event of Default shall have occurred and be
continuing under the Note, this Security Instrument or any of the other Security
Documents;

                      (ii) Lender shall, within a reasonable period of time
prior to request for initial disbursement, be furnished with an estimate of the
cost of the Restoration accompanied by an independent architect's certification
as to such costs and appropriate plans and specifications for the Restoration;

                      (iii) the Net Proceeds, together with any cash or cash
equivalent deposited by Borrower with Lender, are sufficient to cover the cost
of the Restoration as such costs are certified by the independent architect;

                      (iv) either (1) in the event that the Net Proceeds are
insurance proceeds, less than fifty percent (50%) of the total floor area of the
Improvements has been damaged or destroyed, or rendered unusable as a result of
such fire or other casualty; or (2) in the event that the Net Proceeds are
condemnation awards, less than fifty percent (50%) of the Land constituting the
Property is taken, such Land that is taken is located along the perimeter or
periphery of the Property and no portion of the Improvements is located in such
Lands;

                      (v) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest under the Note which
will be incurred with respect to the Property as a result of the occurrence of
any such fire or other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, or (2) other funds of Borrower;

                      (vi) Lender shall be satisfied that, upon the completion
of the Restoration and related lease-up, if applicable, the Property will be
able to operate at a Debt Service Coverage Ratio (as defined in that certain
Collateral Reserve Agreement between Borrower and Lender of even date herewith)
of not less than the greater of: (A) 1.20:1.00; and (B) the average of the Debt
Service Coverage Ratios for each of the six (6) consecutive three (3) month
periods, the last of which ends on the last day of the month before the casualty
occurred.

                      (vii) the Restoration can reasonably be completed on or
before the earliest to occur of (1) six (6) months prior to the Maturity Date
(as defined in the Note), (2) the earliest date required for such completion
under the terms of any Lease, and (3) such time as may be required under
applicable zoning law, ordinance, rule or regulation in order to repair and
restore the Property to as nearly as possible the condition it was in
immediately prior to such fire or other casualty or to such taking, as
applicable;

                      (viii) the Property and the use thereof after the
Restoration will be in compliance with, and permitted under, all applicable
zoning laws, ordinances, rules and regulations (including, without limitation,
all applicable Environmental Laws); and

                      (ix) such fire or other casualty or taking, as applicable,
does not materially impair access to the Property or the Improvements.

                                       22
<PAGE>

                  (d) If the Net Proceeds are greater than the Casualty Amount,
the Net Proceeds shall be held by Lender and, until disbursed in accordance with
the provisions of this Subsection 4.4, shall constitute additional security for
the Obligations. The Net Proceeds other than the Net Proceeds paid under the
Policy described in Subsection 3.3(a)(iv) hereof shall be disbursed by Lender
to, or as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence satisfactory to Lender that (A) all
materials installed and work and labor performed (except to the extent that they
are to be paid for out of the requested disbursement) in connection with the
Restoration have been paid for in full, and (B) there exist no notices of
pendency, stop orders, mechanic's or materialman's liens or notices of intention
to file same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration which have not either been fully bonded
and discharged of record or in the alternative fully insured to the satisfaction
of Lender by the title company insuring the lien of this Security Instrument.

                  (e) Lender shall have the use of the plans and specifications
and all permits, licenses and approvals required or obtained in connection with
the Restoration. The identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under which they have been
engaged, shall be subject to prior review and acceptance by Lender and an
independent consulting engineer selected by Lender (the "Casualty Consultant"),
such acceptance not to be unreasonably withheld or delayed. All costs and
expenses incurred by Lender in connection with making the Net Proceeds available
for the Restoration including, without limitation, reasonable counsel fees and
disbursements and the Casualty Consultant's fees, shall be paid by Borrower.

                  (f) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term "Casualty Retainage" as used in this Subsection 4.4 shall
mean an amount equal to 10% of the costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant, until such
time as the Casualty Consultant certifies to Lender that 50% of the required
Restoration has been completed. There shall be no Casualty Retainage with
respect to costs actually incurred by Borrower for work in place in completing
the last 50% of the required Restoration. The Casualty Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in this
Subsection 4.4, be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance with the
provisions of this Subsection 4.4 and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate
governmental and quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have been paid in full
or will be paid in full out of the Casualty Retainage, provided, however, that
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in accordance with the
provisions of the contractor's, subcontractor's or materialman's contract, and
the contractor, subcontractor or materialman delivers the lien waivers and
evidence of payment in full of all sums due to the

                                       23
<PAGE>

contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company insuring the lien of this Security Instrument. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.

                  (g) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.

                  (h) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender, be sufficient to pay in full the
balance of the costs which are estimated by the Casualty Consultant to be
incurred in connection with the completion of the Restoration, Borrower shall
deposit the deficiency (the "Net Proceeds Deficiency") with Lender before any
further disbursement of the Net Proceeds shall be made. The Net Proceeds
Deficiency deposited with Lender shall be held by Lender and shall be disbursed
for costs actually incurred in connection with the Restoration on the same
conditions applicable to the disbursement of the Net Proceeds, and until so
disbursed pursuant to this Subsection 4.4 shall constitute additional security
for the Obligations.

                  (i) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Subsection 4.4, and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Security Instrument or any of the other Security
Documents.

                  (j) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Subsection 4.4(i) above shall be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its discretion shall deem proper
or, at the discretion of Lender, the same shall be paid, either in whole or in
part, to Borrower. If Lender shall receive and retain Net Proceeds, the lien of
this Security Instrument shall be reduced only by the amount received and
retained by Lender and actually applied by Lender in reduction of the Debt
provided Borrower shall not be subject to prepayment penalty or defeasance fee
for such involuntary prepayment of the debt.

                   ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Lender that:

         Section 5.1. WARRANTY OF TITLE. Borrower has good and marketable fee
title or leasehold interest, as applicable to the Property and has the right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the
same and that Borrower possesses an unencumbered fee simple absolute estate or
leasehold interest, as applicable in the Land and the Improvements and that it
owns the Property free and clear of all liens, encumbrances and charges
whatsoever except for those exceptions shown in the title insurance policy
insuring the lien of

                                       24
<PAGE>

this Security Instrument (the "Permitted Exceptions"). The Permitted Exceptions
do not materially interfere with or diminish (i) the value of the Property, (ii)
Borrower's ability to pay the Debt, (iii) the use or operation of the Property,
or (iv) the validity of the security intended to be provided by this Security
Instrument. Borrower shall forever warrant, defend and preserve the title and
the validity and priority of the lien of this Security Instrument and shall
forever warrant and defend the same to Lender against the claims of all persons
whomsoever. Upon the recordation of this Security Instrument and the filing of a
UCC Financing Statement in the office of the Secretary of State for the state
where the Property is located, the Lender will have a first priority perfected
security interest in all personal property owned by Borrower.

         Section 5.2. AUTHORITY. Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part
to be performed.

         Section 5.3. LEGAL STATUS AND AUTHORITY. Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State of South Carolina; and (c) has all necessary
approvals, governmental and otherwise, and full power and authority to own the
Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the other Security
Documents.

         Section 5.4. VALIDITY OF DOCUMENTS. (a) The execution, delivery and
performance of the Note, this Security Instrument and the other Security
Documents and the borrowing evidenced by the Note (i) are within the power and
authority of Borrower; (ii) have been authorized by all requisite organizational
action; (iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a
breach of or constitute (with notice or lapse of time, or both) a default under
any provision of law (including, without limitation, any usury laws), any order
or judgment of any court or governmental authority, the articles of
incorporation, by-laws, partnership or operating agreement, or other governing
instrument of Borrower, or any indenture, agreement or other instrument to which
Borrower is a party or by which it or any of its assets or the Property is or
may be bound or affected; (v) will not result in the creation or imposition of
any lien, charge or encumbrance whatsoever upon any of its assets, except the
lien and security interest created hereby; and (vi) will not require any
authorization or license from, or any filing with, any governmental or other
body (except for the recordation of this instrument in appropriate land records
in the State where the Property is located and except for Uniform Commercial
Code filings relating to the security interest created hereby), and (b) the
Note, this Security Instrument and the other Security Documents constitute the
legal, valid and binding obligations of Borrower.

         Section 5.5. LITIGATION. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of

                                       25
<PAGE>

Borrower's knowledge, threatened or contemplated against Borrower, any person
guaranteeing the payment of the Debt or any portion thereof or performance by
Borrower of any terms of this Security Instrument (a "Guarantor"), if any, an
Indemnitor (defined in Subsection 10.1(c)), if any, or against or affecting the
Property that (a) has not been disclosed to Lender which would have a material,
adverse effect on the Property or Borrower's, any Guarantor's or any
Indemnitor's ability to perform its obligations under the Note, this Security
Instrument or the other Security Documents, or (b) is not adequately covered by
insurance, each as determined by Lender in its sole and absolute discretion.

         Section 5.6. STATUS OF PROPERTY. (a) No portion of the Improvements is
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, or the National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law, or, if any portion of the Improvements is now or
at any time in the future located within any such area, Borrower has obtained
and will maintain the insurance prescribed in Section 3.3 hereof.

                  (b) Borrower has obtained all necessary certificates, licenses
and other approvals, governmental and otherwise, necessary for the operation of
the Property and the conduct of its business and all required zoning, building
code, land use, environmental and other similar permits or approvals, all of
which are in full force and effect as of the date hereof and not subject to
revocation, suspension, forfeiture or modification.

                  (c) The Property and the present and contemplated use and
occupancy thereof are in full compliance with all Applicable Laws, including,
without limitation, zoning ordinances, building codes, land use and
Environmental Laws, laws relating to the disabled (including but not limited to,
the ADA) and other similar laws.

                  (d) The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by public
utilities and the Property has accepted or is equipped to accept such utility
service.

                  (e) All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally open
for use by the public.

                  (f) The Property is served by public water and sewer systems.

                  (g) As of the date of this Security Agreement, the Property is
free from damage caused by fire or other casualty.

                  (h) All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements have been
paid in full.

                  (i) Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property and such
personal property which Borrower's property manager may keep, store, and use in
connection with the management of the Property

                                       26
<PAGE>

and other properties) used in connection with the operation of the Property,
free and clear of any and all security interests, liens or encumbrances, except
the lien and security interest created hereby.

                  (j) All liquid and solid waste disposal, septic and sewer
systems located on the Property are in a good and safe condition and repair and
in compliance with all Applicable Laws.

                  (k) All security deposits relating to the Leases reflected on
the certified rent roll delivered to Lender have been collected by Borrower
except as noted on the certified rent roll.

                  (l) Borrower has received no notice of an actual or threatened
condemnation or eminent domain proceeding by any public or quasi-public
authority.

                  (m) All the Improvements lie within the boundaries of the
Property.

         Section 5.7. NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.

         Section 5.8. SEPARATE TAX LOT. The Property is assessed for real estate
tax purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together with the
Property or any portion thereof.

         Section 5.9. ERISA COMPLIANCE. As of the date hereof and throughout the
term of this Security Instrument, (i) Borrower is not and will not be an
"employee benefit plan" as defined in Section 3(32) of ERISA, which is subject
to Title I of ERISA, and (ii) the assets of Borrower do not and will not
constitute "plan assets" of one or more such plans for purposes of Title I of
ERISA; and

                  (a) As of the date hereof and throughout the term of this
Security Instrument, (i) Borrower is not and will not be a "governmental plan"
within the meaning of Section 3(32) of ERISA, and (ii) transactions by or with
Borrower are not and will not be subject to state statutes applicable to
Borrower regulating investments of and fiduciary obligations with respect to
governmental plans.

         Section 5.10. LEASES. Except as disclosed in the certified rent roll
for the Property delivered to and approved by Lender, (a) Borrower is the sole
owner of the entire lessor's interest in the Leases; (b) the Leases are valid
and enforceable; (c) the terms of all alterations, modifications and amendments
to the Leases are reflected in the certified rent roll delivered to and approved
by Lender; (d) none of the Rents reserved in the Leases have been assigned or
otherwise pledged or hypothecated (except to Lender); (e) none of the Rents have
been collected for more than one (1) month in advance (provided that a security
deposit shall not be deemed rent collected in advance); (f) the premises demised
under the Leases have been completed and the tenants under the Leases have
accepted the same and have taken possession of the same on a rent-paying basis;
(g) on the date of this Security Instrument and on the date of updates

                                       27
<PAGE>

submitted pursuant to the terms of this Security Instrument, there exist no
offsets or defenses to the payment of any portion of the Rents except for those
matters listed on Exhibit C which is attached hereto and incorporated herein;
(h) on the date of this Security Instrument and on the date of updates submitted
pursuant to the terms of this Security Instrument, Borrower has received no
notice from any tenant challenging the validity or enforceability of any Lease;
(i) all payments due under the Leases are current and are consistent with the
certified rent roll for the Property delivered to and approved by Lender; (j) on
the date of this Security Instrument and on the date of updates submitted
pursuant to the terms of this Security Instrument, no tenant under any Lease is
in default thereunder, or to Borrower's knowledge, is a debtor in any
bankruptcy, reorganization, insolvency or similar proceeding, or has
demonstrated a history of payment problems which suggest financial difficulty;
(k) there are no agreements with the tenants under the Leases other than
expressly set forth in each Lease; (l) the Leases are valid and enforceable
against Borrower and the tenants set forth therein; (m) no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (n) no person or entity other than Borrower and Borrower's property
manager has any possessory interest in, or right to occupy, the Property except
under and pursuant to a Lease; (o) each Lease is subordinate to this Security
Instrument, either pursuant to its terms or a recorded subordination agreement,
or as otherwise approved by Lender; (p) no Lease has the benefit of a
non-disturbance agreement that would be considered unacceptable to prudent
institutional lenders; and (q) no brokerage commissions or finders fees are due
and payable regarding any Lease except for those brokerage commissions or
finders fees listed on Exhibit D which is attached hereto and incorporated
herein.

         Section 5.11. FINANCIAL CONDITION. On the date of this Security
Instrument, Borrower is solvent, and no bankruptcy, reorganization, insolvency
or similar proceeding under any state or federal law with respect to Borrower
has been initiated, (b) it has received reasonably equivalent value for the
granting of this Security Instrument, and (c) the granting of this Security
Instrument does not constitute a fraudulent conveyance.

         Section 5.12. BUSINESS PURPOSES. The loan evidenced by the Note (the
"Loan") is solely for the business purpose of Borrower, and is not for personal,
family, household, or agricultural purposes.

         Section 5.13. TAXES. Borrower, any Guarantor and any Indemnitor have
filed all federal, state, county, municipal, and city income and other tax
returns required to have been filed by them and have paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any
assessments received by them. Neither Borrower, any Guarantor nor any Indemnitor
knows of any basis for any additional assessment in respect of any such taxes
and related liabilities for prior years.

         Section 5.14. MAILING ADDRESS. Borrower's mailing address, as set forth
in the opening paragraph hereof or as changed in accordance with Article 16, is
true and correct.

         Section 5.15. NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in
the application for the loan submitted to Lender (the "Loan Application") and in
all financing statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all respects at the time
such financing statements, rent rolls, reports, certificates and other

                                       28
<PAGE>

documents were dated or if undated, the date of submission of same to Lender. On
the date of this Security Agreement, there has been no material adverse change
in any condition, fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading.

         Section 5.16. DISCLOSURE. Borrower has disclosed to Lender all material
facts and has not failed to disclose any material fact that could cause any
representation or warranty made herein to be materially misleading.

         Section 5.17. THIRD PARTY REPRESENTATIONS. Each of the representations
and the warranties made by each Guarantor and Indemnitor herein or in any other
Security Document(s) is true and correct in all material respects.

         Section 5.18. ILLEGAL ACTIVITY. No portion of the Property has been or
will be purchased, improved, fixtured, equipped or furnished with proceeds of
any criminal or other illegal activity and to the best of Borrower's knowledge,
there are no illegal activities or activities relating to controlled substance
at the Property.

                    ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP

         Section 6.1. RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of any of the Note, this Security Instrument and the other Security
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.

         Section 6.2. SERVICING OF THE LOAN. At the option of Lender, the loan
secured hereby may be serviced by a servicer/trustee (the "Servicer") selected
by Lender and Lender may delegate all or any portion of its responsibilities
under the Note, this Security Instrument, and the other Security Documents to
the Servicer.

                         ARTICLE 7 - FURTHER ASSURANCES

         Section 7.1. RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument and any of the other Security
Documents creating a lien or security interest or evidencing the lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Note, this Security Instrument, the other Security
Documents, any note or mortgage supplemental hereto, any security instrument
with respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state,
county and municipal taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of this Security Instrument,
any mortgage supplemental hereto, any security instrument

                                       29
<PAGE>

with respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited
by law so to do.

         Section 7.2. FURTHER ACTS, ETC. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender, the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for complying with all Applicable Laws. Borrower, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence or perfect more effectively the security interest of Lender in the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting this Security
Instrument and any and all rights and remedies available to Lender pursuant to
this Section 7.2.

         Section 7.3. CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any. If Lender is advised by counsel chosen by it that
the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender shall
have the option by written notice of not less than ninety (90) days to declare
the Debt immediately due and payable without prepayment penalty to Borrower.

                  (b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or Other
Charges assessed against the Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Property, or
any part thereof, for real estate tax purposes by reason of this Security
Instrument or the Debt. If such claim, credit or deduction shall be required by
law, Lender shall have the option, by written notice of not less than ninety
(90) days, to declare the Debt immediately due and payable without prepayment
penalty to Borrower.

                  (c) If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Note, this Security Instrument, or any of the other
Security Documents or impose any other tax or charge on the same, Borrower will
pay for the same, with interest and penalties thereon, if any.

         Section 7.4. ESTOPPEL CERTIFICATES. (a) After request by Lender,
Borrower, within ten (10) days, shall furnish Lender or any proposed assignee
with a statement, duly acknowledged and certified, setting forth (i) the amount
of the original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the rate of interest of the Note, (iv) the terms of

                                       30
<PAGE>

payment and maturity date of the Note, (v) the date installments of interest
and/or principal were last paid, (vi) that, except as provided in such
statement, there are no defaults or events which with the passage of time or the
giving of notice or both, would constitute an event of default under the Note or
the Security Instrument, (vii) that the Note and this Security Instrument are
valid, legal and binding obligations and have not been modified or if modified,
giving particulars of such modification, (viii) whether any offsets or defenses
exist against the obligations secured hereby and, if any are alleged to exist, a
detailed description thereof, (ix) that all Leases are in full force and effect
and have not been modified (or if modified, setting forth all modifications),
(x) the date to which the Rents thereunder have been paid pursuant to the
Leases, (xi) whether or not, to the best knowledge of Borrower, any of the
lessees under the Leases are in default under the Leases, and, if any of the
lessees are in default, setting forth the specific nature of all such defaults,
(xii) the amount of security deposits held by Borrower under each Lease and that
such amounts are consistent with the amounts required under each Lease, and
(xiii) as to any other matters reasonably requested by Lender and reasonably
related to the Leases, the obligations secured hereby, the Property or this
Security Instrument.

                  (b) Borrower shall deliver to Lender, promptly upon request,
duly executed estoppel certificates from any one or more lessees as required by
Lender attesting to such facts regarding the Lease as Lender may require,
including, but not limited to attestations that each Lease covered thereby is in
full force and effect with no defaults thereunder on the part of any party
except as disclosed in Exhibit E which is attached hereto and incorporated
herein by reference, that none of the Rents have been paid more than one month
in advance, except as security, and that the lessee claims no defense or offset
against the full and timely performance of its obligations under the Lease.

                  (c) Upon any transfer or proposed transfer contemplated by
Section 18.1 hereof, at Lender's request, Borrower, any Guarantors and any
Indemnitors shall provide an estoppel certificate to the Investor (defined in
Section 18.1) or any prospective Investor confirming the accuracy of information
provided by such person to Lender under or in respect of this Security
Instrument.

                  (d) After written request by Borrower not more than twice
annually, Lender shall furnish Borrower a statement setting forth (i) the amount
of the original principal amount of the Note, (ii) the unpaid principal amount
of the Note, and (iii) the rate of interest of the Note.

         Section 7.5. FLOOD INSURANCE. After Lender's request, Borrower shall
deliver evidence satisfactory to Lender that no portion of the Improvements is
situated in a federally designated "special flood hazard area" or, if it is,
that Borrower has obtained insurance meeting the requirements of Section
3.3(a)(vi).

         Section 7.6. SPLITTING OF SECURITY INSTRUMENT. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more security instruments, each of which shall cover all or a
portion of the Property to be more particularly described therein. To that end,
Borrower, upon written request of Lender, shall execute, acknowledge and deliver
to Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount secured by this Security

                                       31
<PAGE>


Instrument, and containing terms, provisions and clauses no less favorable to
Borrower than those contained herein and in the Note, and such other documents
and instruments as may be required by Lender to effect the splitting of the Note
and this Security Instrument.

         Section 7.7. REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Security Document which is not of public record, and, in the case
of any such mutilation, upon surrender and cancellation of such Note or other
Security Document, Borrower will issue, in lieu thereof, a replacement Note or
other Security Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Security Document in the same principal amount thereof
and otherwise of like tenor.

         Section 7.8. AMENDED FINANCING STATEMENTS. Borrower will execute and
deliver to the Lender, prior to or contemporaneously with the effective date of
any such change, any financing statement or financing statement change required
by the Lender to establish or maintain the validity, perfection and priority of
the security interest granted herein. At the request of the Lender, Borrower
shall execute a certificate in form satisfactory to the Lender listing the trade
names under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property.

                      ARTICLE 8 - DUE ON SALE/ENCUMBRANCE

         Section 8.1. NO SALE/ENCUMBRANCE. Borrower agrees that Borrower shall
not, without the prior written consent of Lender, sell, convey, mortgage, grant,
bargain, encumber, pledge, assign, or otherwise transfer the Property or any
part thereof or permit the Property or any part thereof to be sold, conveyed,
mortgaged, granted, bargained, encumbered, pledged, assigned, or otherwise
transferred. Notwithstanding the foregoing, Borrower shall be entitled to
transfer the Property up to three (3) times subject to the prior written consent
of Lender, which consent shall not be unreasonably withheld or delayed and shall
be commercially reasonable; and provided further that, in connection with such
request Lender receives sixty (60) days prior written notice of such transfer
hereunder and further provided that the following additional requirements are
satisfied:

                  (i) no Event of Default has occurred and is continuing or an
event which with the giving of notice or lapse of time or both could become an
Event of Default, has occurred and is continuing;

                  (ii) Borrower shall pay Lender a transfer fee equal to 0.25%
(for the first sale, assignment or transfer) or 1% (for the second or third
sale, assignment or transfer) of the outstanding principal balance of the Loan
at the time of such transfer;

                  (iii) such transferee shall be a single purpose bankruptcy
remote entity and comply with Section 4.3 hereof, and Borrower shall cause to be
delivered to Lender a non-consolidation opinion or an update of the same, in
form and substance reasonably acceptable to Lender;

                                       32
<PAGE>

                  (iv) Lender has approved the proposed transferee's
creditworthiness and management experience for comparable properties, provided
that Lender's approval shall be commercially reasonable;

                  (v) after a Securitization, Lender shall have received (x)
written confirmation from the applicable Rating Agencies that such transfer will
not cause any Rating Agency to withdraw, qualify or downgrade the then
applicable rating on any security issued in connection with any Securitization,
and (y) an opinion of Borrower's counsel in form and substance satisfactory to
the Rating Agencies stating that the transfer is not a "significant
modification" as defined in Treasury Regulation Section 1.860 G-2(b)(2) and the
release will not adversely affect the status of any REMIC election in connection
with a Securitization; and

                  (vi) Borrower and the transferee shall execute such other
documents and agreements as Lender shall reasonably require in connection with
the transfer;

         Section 8.2. SALE/ENCUMBRANCE DEFINED. A sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer within the meaning
of this Article 8 shall be deemed to include, but not be limited to (a) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) if Borrower, any Guarantor, any
Indemnitor, or any general partner or managing member (or if no managing member,
any member) of Borrower, Guarantor or Indemnitor is a corporation, the voluntary
or involuntary sale, conveyance, transfer or pledge of such corporation's stock
(or the stock of any corporation directly or indirectly controlling such
corporation by operation of law or otherwise) or the creation or issuance of new
stock by which an aggregate of more than 49% of such corporation's stock shall
be vested in a party or parties who are not now owners of more than 49% of such
corporation's stock; (d) if Borrower, any Guarantor, or Indemnitor or any
general partner or managing member (or if no managing member, any member) of
Borrower, any Guarantor or Indemnitor is a limited or general partnership or
joint venture, the change, removal or resignation of a general partner or the
transfer or pledge of the partnership interest of any general partner or any
profits or proceeds relating to such partnership interest or the transfer or
pledge of any partnership interest of any limited partner or any profits or
proceeds relating to any such partnership interest, which, whether singly or in
the aggregate, result in more than 49% of the beneficial interests in Borrower,
or the profits or proceeds relating thereto, having been transferred or pledged;
and (e) if Borrower, any Guarantor, any Indemnitor or any general partner or
member of Borrower, any Guarantor or any Indemnitor is a limited liability
company, the change, removal or resignation of a managing member or the transfer
of the membership interest of a managing member or any profits or proceeds
relating to such membership interest or the transfer or pledge of any membership
interest of any other member or any profits or proceeds relating to any such
membership interest, which, whether singly or in the aggregate, result in more
than 49% of the beneficial interests in Borrower, or the profits or proceeds
relating thereto, having been transferred or pledged. Notwithstanding the
foregoing, the following transfers shall not be deemed to be a sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment or transfer within the
meaning of this Article 8: (a) transfer by devise or descent or by operation of
law upon the death of a member, general partner or stockholder of Borrower, any

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<PAGE>

Guarantor or Indemnitor or any member or general partner thereof, and (b) a
sale, transfer or hypothecation of a membership, partnership or shareholder
interest in Borrower, whichever the case may be, by a current member, general
partner or shareholder, as applicable, to an immediate family member (i.e.,
parents, spouses, siblings, children or grandchildren) of ---- such member,
general partner or shareholder, or to a trust for the benefit of an immediate
family member of such member, general partner or shareholder, provided that, as
to each of clauses (a) and (b) of this sentence, with respect to any such sale,
transfer or hypothecation, Borrower shall deliver a non-consolidation opinion or
an update of the same, in form and substance reasonably satisfactory to Lender,
upon Lender's request to do so. Notwithstanding the provisions of this Section
8.2 to the contrary, for so long as Mount Pleasant KPT LLC is the Borrower, the
transfer of membership interests in Borrower, Guarantor and any of their
respective members shall be considered permitted transfers; provided, however,
(i) Konover Property Trust, Inc. (or an entity wholly owned or majority
controlled by Konover Property Trust, Inc.) shall own at least 50% of the
interests in Borrower and shall be required to be the manager and sole decision
maker of Borrower and (ii) in the event such transfer(s) involve 49% or more of
the interests in Borrower, Borrower shall cause a non-consolidation opinion to
be delivered to Lender, in form and substance reasonably satisfactory to Lender.

         Section 8.3. LENDER'S RIGHTS.

                  (a) Lender reserves the right to condition the consent
required hereunder upon a modification of the terms hereof and on assumption of
the Note, this Security Instrument and the other Security Documents as so
modified by the proposed transferee, payment of a transfer fee and all of
Lender's expenses incurred in connection with such transfer, or such other
conditions as Lender shall determine in its sole discretion to be in the
interest of Lender. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property without Lender's consent. This provision shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether voluntary or not,
or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.

                  (b) In the event of any transaction referenced in this Article
8 in which Lender's consent is solicited or required, Borrower shall, prior to
any such transaction, arrange to obtain confirmation from the applicable Rating
Agencies that such transfer shall not result in a downgrade, qualification or
withdrawal of the then current ratings of the securities or any proposed
security which may include the Loan.

         Section 8.4. INTENTIONALLY OMITTED.

                             ARTICLE 9 - PREPAYMENT

         Section 9.1. PREPAYMENT OR DEFEASANCE ONLY IN ACCORDANCE WITH NOTE. The
Debt may be prepaid (or defeased) only in strict accordance with the express
terms and conditions of the Note including, without limitation, payment of any
applicable prepayment consideration.

                                       34
<PAGE>

                              ARTICLE 10 - DEFAULT

         Section 10.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events and the continuance of such occurrence after the time for
the applicable cure period has expired shall constitute an "Event of Default":

                  (a) if any Event of Default (as defined in the Note, for
purposes of this Section 10.1(a) only) occurs under the Note;

                  (b) if Borrower violates or does not comply with any of the
provisions of Sections 3.7, 4.3 or 8.1 or if any general partner or the SPE
Member of Borrower violates or does not comply with any of the provisions of
Section 4.3;

                  (c) if any representation or warranty of Borrower, Indemnitor
(as defined in that certain Environmental Indemnity Agreement dated as of the
date hereof (the "Environmental Indemnity") or any Guarantor, or any member,
general partner, principal or beneficial owner of any of the foregoing, made
herein any other Security Document (including, without limitation, the
Environmental Indemnity) or in any guaranty, or in any certificate, report,
financial statement or other instrument or document furnished to Lender shall
have been false or misleading in any material respect when made;

                  (d) if any default occurs under any guaranty or indemnity
executed in connection herewith and such default continues after the expiration
of applicable grace periods, if any;

                  (e) except for the specific defaults set forth in this Section
10.1, any other default hereunder or any of the other Security Documents by
Borrower, which default is not cured (i) in the case of any default which can be
cured by the payment of a sum of money, within five (5) days after written
notice from Lender to Borrower, or (ii) in the case of any other default, within
thirty (30) days after written notice from Lender to Borrower; provided that if
such default cannot reasonably be cured within such thirty (30) day period and
Borrower shall have commenced to cure such default within such thirty (30) day
period and thereafter diligently and expeditiously proceeds to cure the same,
such thirty (30) day period shall be extended for so long as it shall require
Borrower in the exercise of due diligence to cure such default, it being agreed
that no such extension shall be for a period in excess of one hundred twenty
(120) days, unless, only in the case of cures that require construction or
remedial work, such cure cannot with diligence be completed within such one
hundred twenty (120) day period, in which case such period shall be extended for
an additional one hundred twenty (120) days;

                  (f) if Borrower or any Guarantor or Indemnitor shall make an
assignment for the benefit of creditors or if Borrower shall generally not be
paying its debts as they become due;

                  (g) if the Policies are not kept in full force and effect, or
Borrower has not delivered evidence of the renewal of the Policies ten (10) days
prior to their expiration as provided in Section 3.3(b); or

                  (h) if (i) Borrower, SPE Member, Guarantor or Indemnitor shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction,

                                       35
<PAGE>

domestic or foreign, relating to bankruptcy, insolvency, reorganization,
conservatorship or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts; or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or
Borrower, SPE Member, Guarantor or Indemnitor shall make a general assignment
for the benefit of their respective creditors'; or (ii) there shall be commenced
against Borrower, SPE Member, Guarantor or Indemnitor any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of ninety (90) days;
or (iii) there shall be commenced against Borrower, SPE Member, Guarantor or
Indemnitor any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of their respective assets which results in the entry of any
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within ninety (90) days from the entry thereof;
or (iv) Borrower, SPE Member, Guarantor or Indemnitor shall take any action in
furtherance of, or indicating their respective consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) Borrower, SPE Member, Guarantor or Indemnitor shall generally not, or
shall be unable to, or shall admit in writing their inability to, pay their
respective debts as they become due.

                        ARTICLE 11 - RIGHTS AND REMEDIES

         Section 11.1. REMEDIES. (a) Upon the occurrence of any Event of
Default, Borrower agrees that Lender, may take such action, without notice or
demand, as it deems advisable to protect and enforce the rights of Lender
against Borrower and in and to the Property, including, but not limited to the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Lender:

                  (i) declare the entire unpaid Debt to be immediately due and
payable;

                  (ii) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable provision
of law in which case the Property or any interest therein may be sold for cash
or upon credit in one or more parcels or in several interests or portions and in
any order or manner;

                  (iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute proceedings for
the partial foreclosure of this Security Instrument for the portion of the Debt
then due and payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Debt not then due, unimpaired
and without loss of priority;

                  (iv) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of Borrower
therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entity or in parcels, at

                                       36
<PAGE>

such time and place, upon such terms and after such notice thereof as may be
required or permitted by law;

                  (v) subject to the provisions of Article 15, institute an
action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note or in the other
Security Documents;

                  (vi) subject to the provisions of Article 15, recover judgment
on the Note either before, during or after any proceedings for the enforcement
of this Security Instrument or the other Security Documents;

                  (vii) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without regard for
the adequacy of the security for the Debt and without regard for the solvency of
Borrower, any Guarantor, Indemnitor or of any person, firm or other entity
liable for the payment of the Debt;

                  (viii) subject to any applicable law, the license granted to
Borrower under Section 1.2 shall automatically be revoked and Lender may enter
into or upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its agents
or servants wholly therefrom, and take possession of all books, records and
accounts relating thereto and Borrower agrees to surrender possession of the
Property and of such books, records and accounts to Lender upon demand, and
thereupon Lender may (A) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every part of the Property and
conduct the business thereat; (B) complete any construction on the Property in
such manner and form as Lender deems advisable; (C) make alterations, additions,
renewals, replacements and improvements to or on the Property; (D) exercise all
rights and powers of Borrower with respect to the Property, whether in the name
of Borrower or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for,
collect and receive all Rents of the Property and every part thereof; (E)
require Borrower to pay monthly in advance to Lender, or any receiver appointed
to collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (F)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (G) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender shall
deem appropriate in its sole discretion after deducting therefrom all expenses
(including reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, Other Charges, insurance
and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents and
employees;

                  (ix) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: (A) the right to take possession of
the Collateral or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of the Collateral,
and (B) request Borrower at its expense to assemble the Collateral and make it


                                       37
<PAGE>

available to Lender at a convenient place acceptable to Lender. Any notice of
sale, disposition or other intended action by Lender with respect to the
Collateral sent to Borrower in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable
notice to Borrower;

                  (x) apply any sums then deposited in the Escrow Fund and any
other sums held in escrow or otherwise by Lender in accordance with the terms of
this Security Instrument or any other Security Document to the payment of the
following items in any order in its sole and absolute discretion:

                  (A) Taxes and Other Charges;

                  (B) Insurance Premiums;

                  (C) Interest on the unpaid principal balance of the Note;

                  (D) amortization of the unpaid principal balance of the Note;
                  and all other sums payable pursuant to the Note, this Security
                  Instrument and the other Security Documents, including,
                  without limitation, advances made by Lender pursuant to the
                  terms of this Security Instrument;

                  (xi) surrender the Policies maintained pursuant to Article 3
hereof, collect the unearned Insurance Premiums and apply such sums as a credit
on the Debt in such priority and proportion as Lender in its discretion shall
deem proper, and in connection therewith, Borrower hereby appoints Lender as
agent and attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such Insurance Premiums;

                  (xii) apply the undisbursed balance of any Net Proceeds or any
Net Proceeds Deficiency deposit, together with interest thereon, to the payment
of the Debt in such order, priority and proportions as Lender shall deem to be
appropriate in its discretion;

                  (xiii) prohibit Borrower and anyone claiming on behalf of or
through Borrower from making use of or withdrawing any sums from any lockbox or
similar account, if any;

                  (xiv) pursue such other remedies as Lender may have under
applicable law.

         (b) In the event of a sale, by foreclosure, power of sale, or
otherwise, of less than all of the Property, this Security Instrument shall
continue as a lien and security interest on the remaining portion of the
Property unimpaired and without loss of priority. Notwithstanding the provisions
of this Section 11.1 to the contrary, if any Event of Default as described in
Subsection 10.1(h)(i) or (ii) shall occur, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand or other
action by Lender.

         (c) Lender may adjourn from time to time any sale by it to be made
under or by virtue of this Security Instrument by announcement at the time and
place appointed for such sale or for such adjourned sale or sales; and, except
as otherwise provided by any applicable

                                       38
<PAGE>

provision of law, Lender, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.

         (d) Upon any sale made under or by virtue of this Section 11.1, whether
made under a power of sale or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, Lender may bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Debt the net sales price
after deducting therefrom the expenses of the sale and costs of the action and
any other sums which Lender is authorized to deduct under this Security
Instrument.

         Section 11.2. APPLICATION OF PROCEEDS. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
other Security Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper.

         Section 11.3. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event
of Default, Lender may, but without any obligation to do so and without notice
to or demand on Borrower and without releasing Borrower from any obligation
hereunder, cure the same in such manner and to such extent as Lender may deem
necessary to protect the security hereof. Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 11.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default
Interest Rate (as defined in the Note), for the period after notice from Lender
that such cost or expense was incurred to the date of payment to Lender. All
such costs and expenses incurred by Lender together with interest thereon
calculated at the Default Interest Rate shall be deemed to constitute a portion
of the Debt and be secured by this Security Instrument and the other Security
Documents and shall be immediately due and payable upon demand by Lender
therefor.

         Section 11.4. ACTIONS AND PROCEEDINGS. After the occurrence and during
the continuance of an Event of Default, Lender has the right to appear in and
defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in
the Property.

                                       39
<PAGE>

         Section 11.5. RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.

         Section 11.6. EXAMINATION OF BOOKS AND RECORDS. Lender, its agents,
accountants and attorneys shall have the right upon prior written notice and
during reasonable business hours to examine the records, books, management and
other papers of Borrower and its affiliates or of any Guarantor or Indemnitor
which reflect upon their financial condition, at the Property or at any office
regularly maintained by Borrower, its affiliates or any Guarantor or Indemnitor
where the books and records are located. Lender and its agents shall have the
right upon notice to make copies and extracts from the foregoing records and
other papers. In addition, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Borrower and its
affiliates or of any Guarantor or Indemnitor pertaining to the income, expenses
and operation of the Property during reasonable business hours at any office of
Borrower, its affiliates or any Guarantor or Indemnitor where the books and
records are located.

         Section 11.7. OTHER RIGHTS, ETC.

                  (a) The failure of Lender to insist upon strict performance of
any term hereof shall not be deemed to be a waiver of any term of this Security
Instrument. Borrower shall not be relieved of Borrower's obligations hereunder
by reason of (i) the failure of Lender to comply with any request of Borrower,
any Guarantor or any Indemnitor to take any action to foreclose this Security
Instrument or otherwise enforce any of the provisions hereof or of the Note or
the other Security Documents, (ii) the release, regardless of consideration, of
the whole or any part of the Property, or of any person liable for the Debt or
any portion thereof, or (iii) any agreement or stipulation by Lender extending
the time of payment or otherwise modifying or supplementing the terms of the
Note, this Security Instrument or the other Security Documents.

                  (b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, for failure to maintain the Policies, or for
failure to determine whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.

                  (c) Lender may resort for the payment of the Debt to any other
of Borrower's security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender thereafter to foreclose this Security Instrument. The rights of
Lender under this Security Instrument shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of Lender
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision. Lender shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.

                                       40
<PAGE>

         Section 11.8. RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender, may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.

         Section 11.9. VIOLATION OF LAWS. If the Property is not in compliance
with Applicable Laws, Lender may impose additional requirements upon Borrower in
connection herewith including, without limitation, monetary reserves or
financial equivalents.

         Section 11.10. RIGHT OF ENTRY. Lender and its agents shall have the
right upon prior written notice to enter and inspect the Property at all
reasonable times upon not less than five (5) Business Days' notice (except in
the case of emergencies when no notice shall be required) to Borrower.

         Section 11.11. SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish or renew any of the Debt, then, to the extent of
the funds so used, Lender shall be subrogated to all of the rights, claims,
liens, titles and interests existing against the Property held by, or in favor
of, the holder of such Debt and such former rights, claims, liens, titles and
interests, if any, are not waived but rather are continued in full force and
effect in favor of Lender and are merged with the lien and security interest
created by this Security Instrument.

                       ARTICLE 12 - ENVIRONMENTAL HAZARDS

         Section 12.1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower
covenants and agrees to abide, and to cause Guarantor to abide, by their
respective obligations under the Environmental Indemnity. The Environmental
Indemnity is not secured by this Security Instrument.

                          ARTICLE 13 - INDEMNIFICATION

         Section 13.1. GENERAL INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, or punitive damages, of whatever kind or nature (including, but not
limited to attorneys' fees and other costs of defense) (the "Losses") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following (but excluding Losses arising out of Lender's gross negligence or
willful misconduct): (a) ownership of this Security Instrument, the Property or
any interest therein or receipt of any Rents; (b) any amendment to, or
restructuring of, the Debt, and the Note, this Security Instrument, or any other
Security Documents; (c) any and all lawful action that may be taken by

                                       41
<PAGE>

Lender in connection with the enforcement of the provisions of this Security
Instrument or the Note or any of the other Security Documents, whether or not
suit is filed in connection with same, or in connection with Borrower, any
Guarantor or Indemnitor and/or any member, partner, joint venturer or
shareholder thereof becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to
or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of Borrower to perform or be in compliance with any
of the terms of this Security Instrument or the other Security Documents; (g)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (h) the failure of any
person to file timely with the Internal Revenue Service an accurate Form 1099-B,
Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with the Security
Instrument, or to supply a copy thereof in a timely fashion to the recipient of
the proceeds of the transaction in connection with which this Security
Instrument is made; (i) any failure of the Property to be in compliance with any
Applicable Laws; (j) the enforcement by any Indemnified Party of the provisions
of this Article 13; (k) any and all claims and demands whatsoever which may be
asserted against Lender by reason of any alleged obligations or undertakings on
its part to perform or discharge any of the terms, covenants, or agreements
contained in any Lease; (l) the payment of any commission, charge or brokerage
fee to anyone which may be payable in connection with the funding of the loan
evidenced by the Note and secured by this Security Instrument; or (m) any
misrepresentation made by Borrower in this Security Instrument, the other
Security Documents, or any documents or information provided pursuant to Section
18.1 hereof. Any amounts payable to Lender by reason of the application of this
Section 13.1 shall become immediately due and payable and shall bear interest at
the Default Interest Rate from the date loss or damage is sustained by Lender
until paid. For purposes of this Article 13, the term "Indemnified Parties"
means Lender and any person or entity who is or will have been involved in the
origination of this loan, any person or entity who is or will have been involved
in the servicing of this loan, any person or entity in whose name the
encumbrance created by this Security Instrument is or will have been recorded,
persons and entities who may hold or acquire or will have held a full or partial
interest in this loan (including, but not limited to Investors or prospective
Investors in the Securities, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in this loan for
the benefit of third parties) as well as the respective directors, officers,
shareholders, members, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to any
other person or entity who holds or acquires or will have held a participation
or other full or partial interest in this loan or the Property, whether during
the term of this loan or as a part of or following a foreclosure of this loan
and including, but not limited to any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender's assets and business).

         Section 13.2. MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making

                                       42
<PAGE>

and/or recording of this Security Instrument, the Note or any of the other
Security Documents or in connection with a transfer of all or a portion of the
Property pursuant to a foreclosure, deed in lieu of foreclosure or otherwise.

         Section 13.3. ERISA INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited transaction or in
the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.2 or 5.9.

         Section 13.4. DUTY TO DEFEND; Attorneys' Fees and Other Fees and
Expenses. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of claim or proceeding.
Upon demand, Borrower shall pay or, in the sole and absolute discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.

                              ARTICLE 14 - WAIVERS

         Section 14.1. WAIVER OF COUNTERCLAIM. Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Trustee or Lender arising out of
or in any way connected with this Security Instrument, the Note, any of the
other Security Documents, or the Obligations.

         Section 14.2. MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to
the extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, Borrower hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of
each and every person acquiring any interest in or title to the Property
subsequent to the date of this Security Instrument and on behalf of all persons
to the extent permitted by Applicable Law.

         Section 14.3. WAIVER OF NOTICE. To the extent permitted by Applicable
Law, Borrower shall not be entitled to any notices of any nature whatsoever from
Trustee or Lender except with respect to matters for which this Security
Instrument specifically and expressly provides for the giving of notice by
Lender to Borrower and except with respect to matters for which Lender is
required by Applicable Law to give notice, and Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Security Instrument does not specifically and expressly provide for the
giving of notice by Lender to Borrower.

                                       43
<PAGE>

         Section 14.4. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or
performance of its Other Obligations.

         Section 14.5. SOLE DISCRETION OF LENDER. Wherever pursuant to this
Security Instrument (a) Lender exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lender, or (c)
any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove all decisions that arrangements or terms are
satisfactory or not satisfactory, and all other decisions and determinations
made by Lender, shall be in the sole and absolute discretion of Lender and shall
be final and conclusive, except as may be otherwise expressly and specifically
provided herein.

         Section 14.6. WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER
SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

                            ARTICLE 15 - EXCULPATION

         Section 15.1. EXCULPATION. Notwithstanding anything to the contrary
contained in this Security Instrument or in any other Security Document (but
subject to the provisions of Sections 15.2, 15.3, 15.4 and 15.5), Lender shall
not enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Note or this Security Instrument by any action or
proceeding to collect damages or wherein a money judgment or any deficiency
judgment or order or any judgment establishing any personal obligation or
liability shall be sought against Borrower or any principal director, officer,
employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate
of Borrower or any person owning, directly or indirectly, any legal or
beneficial interest in Borrower, or any successors or assigns of any of the
foregoing (collectively, the "Exculpated Parties"). Lender may bring a
foreclosure action, action for specific performance or other appropriate action
or proceeding to enable Lender to enforce and realize upon this Security
Instrument, the other Security Documents, and the interest in the Property, the
Rents and any other collateral given to Lender created by this Security
Instrument and the other Security Documents; provided, however, subject to the
provisions of Sections 15.2, 15.3, 15.4 and 15.5, that any judgment in any
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender in connection with the Note. Lender, by accepting the Note and
this Security Instrument, agrees that it shall not, except as otherwise provided
below, sue for or demand any deficiency judgment against Borrower or any of the
Exculpated Parties in any action or proceeding, under or by reason of or under
or in connection with the Note, the other Security Documents or this Security
Instrument.

                                       44
<PAGE>

         Section 15.2. RESERVATION OF CERTAIN RIGHTS. The provisions of Section
15.1 shall not (a) constitute a waiver, release or impairment of the
Obligations; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under this
Security Instrument; (c) affect the validity or enforceability of any indemnity,
guaranty, master lease or similar instrument made in connection with the Note,
this Security Instrument, or the other Security Documents; (d) impair the right
of Lender to obtain the appointment of a receiver to the extent permitted by
law; or (e) impair the enforcement of the Assignment of Leases and Rents
executed in connection herewith.

         Section 15.3. EXCEPTIONS TO EXCULPATION. Notwithstanding the provisions
of Section 15.1 to the contrary, Borrower, Guarantor and Indemnitor shall be
personally liable to Lender on a joint and several basis for the Losses Lender
incurs due to: (a) fraud or intentional misrepresentation by it or any other
person or entity in connection with the execution and the delivery of the Note,
this Security Instrument or the other Security Documents; (b) the misapplication
or misappropriation of Rents received by Borrower; (c) the misapplication or
misappropriation of tenant security deposits or Rents collected in advance; (d)
the misapplication or misappropriation of insurance proceeds or condemnation
awards; (e) any fees or commissions paid by Borrower after the occurrence and
during the continuance of an Event of Default to any principal, affiliate or
general partner of Borrower, Indemnitor or Guarantor in violation of the terms
of the Note, this Security Instrument or the other Security Documents; (f) gross
negligence or criminal acts perpetrated by it resulting in forfeiture, seizure
or loss of any portion of the Property or the security interest in the Property;
(g) any failure by Borrower or Indemnitor to comply with the terms and
provisions of the Environmental Indemnity; (h) any failure by Borrower or the
SPE Member to comply, or to have complied since their inception, with the terms
and provisions of Section 4.3 hereof; (i) all fees and expenses of Lender
pursuant to Section 19.2 hereof; or (j) any sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment or transfer of the Property or any part
thereof, within the meaning of Article 8 hereof, without the prior written
consent of Lender.

         Section 15.4. RECOURSE. Notwithstanding the foregoing, the agreement of
Lender not to pursue recourse liability as set forth in Section 15.1 above SHALL
BECOME NULL AND VOID and shall be of no further force and effect in the event
(i) the Property or any part thereof shall become an asset in (A) a voluntary
bankruptcy or insolvency proceeding, or (B) an involuntary bankruptcy or
insolvency proceeding commenced by any Person (other than Lender) and Borrower
fails to use its best efforts to obtain a dismissal of such proceedings, or (ii)
intentionally omitted.

         Section 15.5. BANKRUPTCY CLAIMS. Nothing herein shall be deemed to be a
waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b)
or any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt secured by this Security Instrument or to require that all
collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Note, this Security Instrument and the other Security
Documents.

                              ARTICLE 16 - NOTICES

         Section 16.1. NOTICES. All notices or other written communications
hereunder shall be deemed to have been properly given (a) upon delivery, if
delivered in person or by facsimile

                                       45
<PAGE>

transmission with receipt acknowledged by the recipient thereof, (b) one (1)
Business Day (defined below) after having been deposited for overnight delivery
with any reputable overnight courier service, or (c) five (5) Business Days
after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:


If to Borrower:                    Mount Pleasant KPT LLC
                                   c/o Konover Property Trust, Inc.
                                   11000 Regency Parkway, Suite 300
                                   Cary, North Carolina 27511
                                   Attn: Legal Department
                                   Facsimile No.  (919) 462-8799

With a copy to:                    Kennedy Covington Lobdell & Hickman
                                   113 East Main Street
                                   Suite 300
                                   Rock Hill, South Carolina 29730
                                   Attention: Stephen McCrae, Esq.
                                   Facsimile No. (803) 329-7677

If to Lender:                      GMAC Commercial Mortgage Corporation
                                   200 Witmer Road
                                   Horsham, Pennsylvania 19044
                                   Attention: Executive Vice President,
                                   Commercial Loan Servicing
                                    Facsimile No. (215) 328-3478

With a copy to:                    Commercial Capital Initiatives, Inc.
                                   Wall Street Plaza
                                   88 Pine Street
                                   New York, New York 10005
                                   Attention: Manager - Loan Administration
                                   Facsimile No. (212) 269-5286

And a copy to:                     Dechert
                                   4000 Bell Atlantic Tower
                                   1717 Arch Street
                                   Philadelphia, PA 19103-2793
                                   Attention:  Jay Zagoren, Esq.
                                   Facsimile No. (215) 994-2222.

or addressed as such party may from time to time designate by written notice to
the other parties.

         Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications. For purposes of
this Subsection, "Business Day" shall mean a day on which commercial banks are
not authorized or required by law to close in the State of New York.

                                       46
<PAGE>

                          ARTICLE 17 - APPLICABLE LAW

         Section 17.1. CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE
GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE WHERE THE PROPERTY IS LOCATED AND THE APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA.

         Section 17.2. USURY LAWS. This Security Instrument and the Note are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the Debt at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Security Instrument or the
Note, Borrower is at any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.

         Section 17.3. PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any Applicable Law.

         Section 17.4. INAPPLICABLE PROVISION. If any term of this Security
Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term
shall not be affected thereby.

                         ARTICLE 18 - SECONDARY MARKET

         Section 18.1. DISSEMINATION OF INFORMATION. If Lender determines at any
time to sell, transfer or assign the Note, this Security Instrument and the
other Security Documents, and any or all servicing rights with respect thereto,
or to grant participations therein (the "Participations") or issue mortgage
pass-through certificates or other securities (such sale and/or issuance, the
"Securitization") evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"), Lender may forward to each
purchaser, transferee, assignee, servicer, participant, investor, or their
respective successors in such Participations and/or Securities (collectively,
the "Investor") or any Rating Agency rating such Securities and each prospective
Investor, all documents and information which Lender now has or may hereafter
acquire relating to the Debt and to Borrower, any Guarantor, any Indemnitors and
the Property (including, without limitation, all financial statements), which
shall have been furnished by Borrower, any Guarantor or any Indemnitors, as
Lender reasonably determines necessary or

                                       47
<PAGE>

desirable. Borrower, any Guarantor and any Indemnitor agree to cooperate with
Lender in connection with any transfer made or any Securities created pursuant
to this Section, including, without limitation, (i) the delivery of an estoppel
certificate required in accordance with Subsection 7.4(c) hereof and such other
documents as may be reasonably requested by Lender, (ii) upon Lender's
reasonable request, meeting with any Rating Agency for due diligence purposes,
(iii) amending or causing the amendment of (x) this Security Instrument and the
other Security Documents, to the extent reasonable necessary and as generally
required in similar transactions, or executing such additional documents,
instruments and agreements, which do not materially increase Borrower's
obligations or liabilities hereunder, and (y) Borrower or any SPE Member's
organizational documents to comply with Rating Agency criteria regarding single
purpose entity provisions, (iv) promptly and reasonably providing such
information as may be reasonably requested in connection with the preparation of
a private placement memorandum, prospectus or a registration statement required
to place privately or to distribute publicly the Securities in a manner which
does not conflict with federal or state securities laws, and (v) upon the
request of Lender, causing there to be at least one member of Borrower which is
an SPE Member, which SPE Member satisfies the obligations of Section 4.3(b)
hereof. Borrower shall also furnish and Borrower, any Guarantor and any
Indemnitor consent to Lender furnishing to such Investors or such prospective
Investors or any Rating Agency any and all information concerning the Property,
the Leases, the financial condition of Borrower, any Guarantor and any
Indemnitor as may be reasonably requested by Lender, any Investor or any
prospective Investor or Rating Agency in connection with any sale, transfer,
Securitization or Participation. Borrower and, to the extent necessary,
Guarantors or Indemnitors shall re-execute or ratify this Security Instrument
and the other Security Documents upon the reasonable request of any Investors,
prospective Investor or Rating Agency in connection with any sale, transfer,
Securitization or Participation. Borrower shall deliver on the date hereof, at
Borrower's sole cost and expense, a nonconsolidation opinion, and within ten
(10) days after demand of Lender, an update of same, each in form and substance
and delivered by counsel acceptable to Lender and the Rating Agency rating or
proposed to rate the Securities, as may be required by Lender and/or such Rating
Agency. Borrower's failure to deliver or cooperate in delivering the opinions
required hereby shall constitute an Event of Default hereunder.

                               ARTICLE 19 - COSTS

         Section 19.1. PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges
and confirms that Lender shall impose certain administrative processing and/or
commitment fees in connection with (a) the extension, renewal, modification,
amendment and termination of its loan, (b) the release or substitution of
collateral therefor, (c) obtaining certain consents, waivers and approvals with
respect to the Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance agreement (the
occurrence of any of the above shall be called an "Event"). Borrower further
acknowledges and confirms that it shall be responsible for the payment of all
costs of reappraisal of the Property or any part thereof, whether required by
law, regulation, Lender or any governmental or quasi-governmental authority.
Borrower hereby acknowledges and agrees to pay, immediately, with or without
demand, all such fees (as the same may be increased or decreased from time to
time), and any additional fees of a similar type or nature which may be imposed
by Lender from time to time, upon the occurrence of any Event or otherwise.
Wherever it is provided for herein that Borrower pay any costs and expenses,
such costs and expenses shall include, but not be limited to, all legal

                                       48
<PAGE>

fees and disbursements of Lender (whether of retained firms, the reimbursement
for the expenses of in-house staff or otherwise) and all costs and expenses of
Lender, if any.

         Section 19.2. ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall pay
all legal fees incurred by Lender in connection with (i) the preparation of the
Note, this Security Instrument and the other Security Documents; and (ii) the
items set forth in Section 19.1 above, and (b) Borrower shall pay to Lender on
demand any and all expenses, including legal expenses and reasonable attorneys'
fees, incurred or paid by Lender in protecting its interest in the Property or
the Collateral or in collecting any amount payable hereunder or in enforcing its
rights hereunder with respect to the Property or the Collateral, whether or not
any legal proceeding is commenced hereunder or thereunder and whether or not any
default or Event of Default shall have occurred and is continuing, together with
interest thereon at the Default Interest Rate from the date paid or incurred by
Lender until such expenses are paid by Borrower.

                            ARTICLE 20 - DEFINITIONS

         Section 20.1. GENERAL DEFINITIONS. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Security Instrument may be used interchangeably in singular or plural
form and the word "Borrower" shall mean "each Borrower and any subsequent owner
or owners of the Property or any part thereof or any interest therein," the word
"Lender" shall mean "Lender and any subsequent holder of the Note," the word
"Note" shall mean "the Note and any other evidence of indebtedness secured by
this Security Instrument," the word "person" shall include an individual,
corporation, limited liability company, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, the word
"Property" shall include any portion of the Property and any interest therein,
and the phrases "attorneys' fees" and "counsel fees" shall include any and all
attorneys', paralegal and law clerk fees and disbursements, including, but not
limited to fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in the Property, the
Leases and the Rents and enforcing its rights under this Security Instrument.

         Section 20.2. HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.

                     ARTICLE 21 - MISCELLANEOUS PROVISIONS

         Section 21.1. NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower, or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

         Section 21.2. LIABILITY. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.

                                       49
<PAGE>

         Section 21.3. DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

         Section 21.4. NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.

         Section 21.5. SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Note and the other
Security Documents and the performance and discharge of the Other Obligations.

         Section 21.6. ENTIRE AGREEMENT. The Note, this Security Instrument and
the other Security Documents constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Debt and supersede all prior written or oral understandings
and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security
Instrument and the other Security Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, this Security
Instrument and the other Security Documents.

                           ARTICLE 22 - GROUND LEASE

         Section 22.1. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants as follows: (i) the Ground Lease is in full force and effect in
accordance with its terms, unmodified by any writing or otherwise except as
specifically set forth herein; (ii) all charges reserved in or payable under the
Ground Lease have been paid in full to the extent that they are payable to the
date hereof; (iii) Borrower is the owner of the Leasehold Estate and Borrower
enjoys the quiet, peaceful and undisturbed possession of such Leasehold Estate;
(iv) neither Borrower nor, to the knowledge of Borrower, the Ground Lessor, is
in default under any of the terms of the Ground Lease; (v) the Ground Lease is
not subject to any encumbrances or other matters except for the Permitted
Encumbrances; (vi) this Security Instrument is and shall remain a valid and
enforceable first lien on the Leasehold Estate, subject only to the Permitted
Encumbrances; (vii) Borrower has full power and authority to encumber the
Leasehold Estate, in the manner and form herein provided; and (viii) Borrower
has delivered to the Lender a true, accurate and complete copy of the Ground
Lease, together with any and all amendments thereto.

                                       50
<PAGE>

         Section 22.2. COVENANTS. Borrower covenants and agrees as follows: (i)
promptly and faithfully to observe, perform and comply with all of the terms,
covenants and provisions of the Ground Lease; (ii) to refrain from doing
anything and not do or permit any act, event or omission, as a result of which,
there is likely to occur a default or breach under the Ground Lease; (iii) to
give immediately Lender notice of any default by any party under the Ground
Lease, upon learning of such default and immediately deliver to Lender a copy of
each notice of default and all responses to such notice of default and all other
material instruments, notices or demands received or delivered by Borrower under
or in connection with the Ground Lease; (iv) to notify immediately Lender in
writing in the event of the initiation of any litigation or arbitration
proceeding affecting Borrower or the Property under or in connection with the
Ground Lease; (v) to furnish to Lender copies of such information and such other
evidence as Lender may reasonably request from time to time concerning
Borrower's due observance, performance and compliance with the terms, covenants
and provisions of the Ground Lease. Lender shall request such estoppel
certificates from Borrower no more often than one (1) time each calendar year
unless Lender sells, transfers, assigns, participates or securitizes the Loan,
and any transferee, participant or assignee has requested from Lender such
estoppel, in which case Borrower shall deliver such estoppel certificates within
ten (10) Business Days of each request by Lender; (vi) the occurrence of a
default on the part of Borrower under the Ground Lease, beyond the periods
granted in the Ground Lease, for notice and cure shall constitute an immediate
Event of Default by Borrower under this Security Instrument.

         Section 22.3. ADDITIONAL COVENANTS. Borrower further covenants and
agrees that it will not voluntarily or involuntarily, directly or indirectly,
assign, transfer or convey the Land or the Leasehold Estate, nor surrender,
terminate or cancel the Ground Lease, nor, without the prior written consent of
Lender, fail to exercise in a timely manner any purchase option(s) or renewal
option(s) contained in the Ground Lease, if applicable, nor, without the prior
written consent of Lender, which consent shall not be unreasonably withheld or
delayed, modify, alter or amend the Ground Lease, either orally or in writing.
Any assignment, transfer, conveyance, surrender, termination, cancellation,
modification, alteration or amendment of the Ground Lease, in contravention of
the foregoing sentence shall be void and of no force and effect.

         Section 22.4. NO RELEASE. Borrower acknowledges and agrees that no
release or forbearance of any of Borrower's obligations under the Ground Lease,
or otherwise shall release Borrower from any of its obligations under this
Security Instrument, including without limitation its obligations with respect
to the payment of rent and other charges as provided for in the Ground Lease,
and the performance of all of the terms, provisions, covenants, conditions and
agreements contained in the Ground Lease, to be kept, performed and complied
with by Borrower therein.

         Section 22.5. DEFAULTS. Subject to the terms of the second sentence of
this Section 22.5, in the event of a default and during its continuance by
Borrower under the Ground Lease, then, in each and every such case, Lender may
(but shall not be obligated to), in its sole discretion, cause such default or
defaults by Borrower to be remedied and otherwise take or perform such other
actions as Lender may deem necessary or desirable as a result thereof or in
connection therewith. Borrower shall, on demand, reimburse Lender for all
advances made and expenses incurred by Lender in curing any such default(s)
(including, without limitation, reasonable attorneys' fees), together with
interest thereon from the date the same is paid in full to Lender

                                       51
<PAGE>

and all such sums so advanced shall be secured hereby. The provisions of this
subsection are in addition to any other right or remedy given to or allowed
Lender under the Ground Lease, or otherwise.

         Section 22.6. CANCELLATION OR TERMINATION. If the Ground Lease is
cancelled or terminated, Lender or its nominee shall acquire an interest in any
new lease of the Leasehold Estate.

         Section 22.7. NO LIABILITY. Notwithstanding anything contained herein
or otherwise to the contrary, Lender shall not have any liability or obligation
under the Ground Lease by virtue of its acceptance of this Security Instrument.
Borrower acknowledges and agrees that Lender shall be liable for the obligations
of the Borrower arising under the Ground Lease for only that period of time, if
any, during which Lender is in possession of the Leasehold Estate or has
acquired, by foreclosure, power of sale or otherwise, and is holding, all of
Borrower's right, title and interest as tenant therein.

         Section 22.8. BANKRUPTCY. Notwithstanding anything contained herein or
otherwise to the contrary, Borrower hereby assigns, transfers and sets over to
Lender any and all rights and interests that may arise in favor of Borrower in
connection with or as a result of the bankruptcy or insolvency of the Ground
Lessor, including, without limitation, all of Borrower's right, title and
interest in, to and underss.365 of the Bankruptcy Code (11 U.S.C.ss.365), as the
same may be amended, supplemented or modified from time to time.

         Section 22.9. NO MERGER. It is hereby agreed by the parties that the
fee title currently vested in Ground Lessor under the Ground Lease and the
Leasehold Estate currently held by Borrower shall not merge but shall always be
kept separate and distinct, notwithstanding the union of such estates in either
the Ground Lessor (or its successors and assigns), Borrower or a third party,
whether by purchase or otherwise. If Borrower acquires such fee title or any
other estate, title or interest in the Ground Lease, or any part thereof, the
lien of this Security Instrument shall automatically spread and attach to, cover
and be a first lien upon such acquired estate, title or interest and the same
shall thereupon and thereafter be and become a part of the premises encumbered
hereby with the same force and effect as if specifically encumbered herein.
Borrower agrees to execute all instruments and documents which Lender may
reasonably require to ratify, confirm and further evidence Lender's first lien
on the acquired estate, title or interest and, if Borrower fails to execute such
instruments, Borrower hereby appoints Lender its true and lawful
attorney-in-fact to execute and deliver all such instruments and documents in
the name and on behalf of Borrower. This power, being coupled with an interest,
shall be irrevocable as long as the indebtedness secured hereby remains unpaid.

                                       52
<PAGE>

         Section 22.10. TAXES. In the event that it is claimed by any
governmental agency, authority or subdivision that any tax or governmental
charge or imposition is due, unpaid or payable by Borrower upon or in connection
with the obligations secured hereby, the Ground Lease, Borrower shall promptly
either (i) pay such tax, charge or imposition when due and deliver to Lender
satisfactory proof of payment thereof or (ii) deposit with Lender the amount of
such claimed tax, together with interest and penalties thereon, pending an
application for a review of the claim for such tax, and within a reasonable
time, deliver to Lender either (a) evidence satisfactory to Lender that such
claim of taxability has been withdrawn or defeated, in which event any such
deposit shall be returned to Borrower or (b) a direction from Borrower to Lender
to pay the same out of the deposit above mentioned, any excess due over the
amount of said deposit to be paid by Borrower directly to the taxing authority
and any excess of such deposit over such payment by Lender to be returned to
Borrower. If liability for such tax is asserted against Lender, Lender will give
to Borrower prompt notice of such claim, and Borrower, upon complying with the
provisions of this subsection shall have full right and authority to contest
such claim of taxability.

                       ARTICLE 23 - LOCAL LAW PROVISIONS

         Section 23.1. EXHIBIT B. The provisions set forth on Exhibit B annexed
hereto are incorporated herein by reference as if fully set forth herein.

              [The remainder of this page intentionally left blank]


                                       53
<PAGE>

         Section 23.2. WAIVER OF APPRAISAL RIGHTS. The laws of the State of
South Carolina provide that in any real estate foreclosure proceeding, a
defendant against whom a personal judgment is taken or asked may within thirty
(30) days after the sale of the Property, as defined in the mortgage, apply to
the court for an order of appraisal. The statutory appraisal value as approved
by the court would be substituted for the high bid and may decrease the amount
of any deficiency owing in connection with the transaction. THE UNDERSIGNED
HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE
HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS
OF ANY APPRAISED VALUE OF THE PROPERTY.

         IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower as of the date first above written.

WITNESSES:                                   BORROWER:

                                             MOUNT PLEASANT KPT LLC, a Delaware
                                             limited liability company

--------------------------------------
Witness #1 Print Name:
                      ----------------
                                             By: Mount Pleasant Formation Inc.,
                                                 a Delaware corporation, its
                                                 Managing Member


--------------------------------------           By:
Witness #2 Print Name:                              ---------------------------
                      ----------------              Name:
                                                    Title:


              [Signature page to Mortgage and Security Agreement]


<PAGE>


STATE OF                                    )
          ----------------------------------
                                            ) ss.
COUNTY OF                                   )
          ----------------------------------


                                 ACKNOWLEDGMENT

         The foregoing instrument was acknowledged before me, the undersigned
Notary Public, this _______ day of December, 2000 by _________________________,
as ____________________ of Mount Pleasant Formation, Inc., a Delaware
corporation, as Managing Member of MOUNT PLEASANT KPT LLC, a Delaware limited
liability company on behalf of the limited liability company.


                                            ------------------------------------
                                            Notary Public for
                                                             -------------------
                                            My commission expires:
                                                                  --------------

                                                                       [SEAL]


            [Acknowledgement page to Mortgage and Security Agreement]

<PAGE>


                                    EXHIBIT A

                              (Description of Land)




<PAGE>


                                    EXHIBIT B

                     (Local Law Provisions - South Carolina)

         1. The maximum of all indebtedness outstanding at any one time secured
hereby shall not exceed $69,600,000, plus interest thereon, all charges and
expenses of collection incurred by Lender including court costs and reasonable
attorneys' fees. Interest hereunder may be deferred, accrued or capitalized.

         2. This Security Instrument also secured, in accordance with Section
29-3-50, Code of Laws of South Carolina of 1976, as amended, all future advances
and re-advances that may subsequently be made to Borrower by Lender pursuant to
this Security Instrument and the other Security Documents.





<PAGE>


                                    EXHIBIT C

                        (Schedule of Offsets or Defenses)


Consolidated Theatres (only to the extent of the disputed "Construction
Chargeback" provisions of the lease).






<PAGE>

                                    EXHIBIT D

                          (Schedule of Brokerage Fees)

                                      None.




<PAGE>


                                    EXHIBIT E

                                List of Defaults



Red's Backwood's Barbeque

Consolidated Theatres(only to the extent of the disputed "Construction
Chargeback" provisions of the lease).




<PAGE>


                                    EXHIBIT F

                              Intentionally Omitted




<PAGE>


                                    EXHIBIT G

                                 Form of Release



STATE OF SOUTH CAROLINA             )
                                    )
COUNTY OF CHARLESTON                )


                        PARTIAL RELEASE OF MORTGAGE LIEN


         FOR VALUE RECEIVED, GMAC COMMERCIAL MORTGAGE CORPORATION, the owner and
holder of that certain Mortgage and Security Agreement executed and delivered by
MOUNT PLEASANT KPT LLC, a Delaware limited liability company, dated ___________
__, 2000, securing original principal indebtedness of $46,400,000.00 (the
"Obligations"), recorded ______________, 2000, in ____ Book ____, Page ______,
Office of the Register of Deeds for Charleston County, South Carolina (the
"Mortgage"), and also the holder and owner of that certain Assignment of Leases
and Rents dated ___________ ___, 2000, recorded ______________, 2000, in ___
Book _____, Page ______, Office of the Register of Deeds for Charleston County,
South Carolina (the "Assignment"), does hereby release and discharge from the
lien of the Mortgage and Assignment the following described parcel of real
estate:


                  PROPERTY DESCRIPTION: See the attached Exhibit A made a part
                  hereof by reference.

                  DERIVATION: Deed from ________________ to Mount Pleasant KPT
                  LLC dated ___________________, recorded ___________________,
                  in Deed Book _____, Page _____, Office of the Registrar of
                  Deeds of Charleston County, South Carolina.


<PAGE>

         PROVIDED, HOWEVER, that it is the condition of this Partial Release of
Mortgage that the liens on the remaining property securing the Obligations not
released hereunder shall continue in full force and effect and shall remain a
valid encumbrance thereupon.

         IN WITNESS WHEREOF, GMAC COMMERCIAL MORTGAGE CORPORATION has caused and
authorized the undersigned to execute and seal the within Partial Release of
Mortgage Lien this _____ day of ______________, ______.

WITNESSES:                                  GMAC Commercial Mortgage Corporation


----------------------------
Witness #1

----------------------------
Witness #2
                                            By:
                                               ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------

STATE OF __________________ )
                            )
COUNTY OF ________________  )


         The foregoing Partial Release of Mortgage Lien was acknowledged before
me this _____ day of _______________, ____, by _____________________________as
________________ of GMAC Commercial Mortgage Corporation, on behalf of the
corporation.


________________________________(L.S.)
Notary Public for

My commission expires:________________



<PAGE>


                                    EXHIBIT A

                          [ATTACH PROPERTY DESCRIPTION]