<PAGE>   1
                             [WACHOVIA LETTERHEAD]

This instrument was prepared by and is to be returned to Benton D. Williamson,
whose address is Sinkler & Boyd, P.A., P.O. Box 11889, Columbia, South Carolina
29211-1889.


                MORTGAGE MODIFICATION AND RE-STATEMENT AGREEMENT
                                  ("AGREEMENT")

                              (BOOK 499, PAGE 980)

STATE OF SOUTH CAROLINA    )
                           )
COUNTY OF BEAUFORT         )

         THIS MORTGAGE MODIFICATION AND RE-STATEMENT AGREEMENT, made as of the
31st day of October, 1998 by and among WACHOVIA BANK, N.A. (formerly known as
WACHOVIA BANK OF SOUTH CAROLINA, N.A. and formerly known as THE SOUTH CAROLINA
NATIONAL BANK) (the "Mortgagee"), whose address is P.O. Box 700, Charleston,
South Carolina 29401, Attention: Real Estate Lending, and SEA PINES ASSOCIATES,
INC. and SEA PINES COMPANY, INC. (collectively, the "Mortgagor").

                                   WITNESSETH:

         WHEREAS, the Mortgagor has made and issued certain notes as follows:

         1.       That certain promissory note dated the 17th day of November,
1987 evidencing an original indebtedness of SEVENTEEN MILLION and NO/100 DOLLARS
($17,000,000.00) which note has been amended and restated as of the date hereof
to evidence an indebtedness of EIGHTEEN MILLION, FIVE HUNDRED THOUSAND and
NO/100 DOLLARS ($18,500,000.00); and

         2.       That certain promissory note dated the 17th day of January,
1992 evidencing an original indebtedness of TWO MILLION, FIVE HUNDRED THOUSAND
and NO/100 DOLLARS ($2,500,000.00) which note has been amended and restated as
of the date hereof; and

         3.       That certain promissory note dated the 15th day of October,
1993 evidencing an original indebtedness of TWELVE MILLION and NO/100 DOLLARS
($12,000,000.00) which note has been amended and restated as of the date hereof
to evidence an indebtedness of FIFTEEN MILLION and NO/100 DOLLARS
($15,000,000.00);

which notes, as amended and restated, are collectively referred to herein as the
"Notes" and are made a part hereof by reference as if fully set out herein
verbatim; and

         WHEREAS, the Mortgagor to partially secure the indebtedness evidenced
by the Notes executed and delivered a Mortgage and Security Agreement dated
January 17, 1992, as amended from time to time, and recorded in the RMC Office
or Clerk of Court, as appropriate (the "Registry") for Beaufort County in Book
499, Page 980, made a part hereof by this reference as fully as if set out
herein verbatim (such document, as heretofore amended, being herein referred to
as the "Mortgage"); and

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<PAGE>   2
         WHEREAS, the Mortgagor and Mortgagee have entered into that certain
Master Credit Agreement dated the same date hereof pursuant to which the
Mortgagor and Mortgagee have established uniform agreements, obligations,
covenants and other matters governing the Obligations, as defined in said
Agreement, whether now existing or hereinafter arising, owed to the Mortgagee;
and (the "Master Credit Agreement"); and


         WHEREAS, the Mortgagor and Mortgagee desire to re-establish, re-state
and modify the Facilities as defined in the Master Credit Agreement; and

         WHEREAS, the Mortgagor and Mortgagee have agreed to make certain
modifications to the Mortgage in order to secure, collateralize and
cross-default all Obligations, as defined in the Master Credit Agreement; and

         WHEREAS, the Mortgagor has consented to waive Mortgagor's appraisal
rights as set forth in S.C. Code Ann. Section 29-3-680; and

         WHEREAS, the Mortgagor has been informed in writing of the requirement
of the waiver of appraisal rights before this loan modification transaction
closed and has consented thereto as part of the Mortgagor's inducement of
Mortgagee to enter into the loan modification transaction described herein; and

         WHEREAS, the Mortgagee, as holder and owner of the Mortgage, and the
Mortgagor mutually desire to modify and amend the provisions of the same in the
manner hereinafter set out, it being specifically understood that except as
herein modified and amended, the terms and provisions of the Mortgage shall
remain unchanged and continue in full force and effect as therein written; and

         NOW, THEREFORE, the Mortgagee and the Mortgagor, in consideration of
the sum of One Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and the mutual
covenants herein does hereby agree that the Mortgage should be, and the same
hereby are modified and amended as follows:

         1.       The provisions of the Notes, as amended and restated, and the
Master Credit Agreement, are incorporated as fully as if set out herein
verbatim.

         2.       Notwithstanding anything to the contrary contained in the
Notes and Mortgage, and any amendments thereto, the Mortgage is hereby amended
to include as additional Events of Default the following:

                  a.       the occurrence of an Event of Default under the
Master Credit Agreement, or

                  b.       a default by the Mortgagor on any of the Obligations,
as defined in the Master Credit Agreement.

         3.       Notwithstanding anything to the contrary contained in the
Mortgage, and any amendments thereto, the Mortgage is further amended, in order
(a) to secure the performance and observance by the Mortgagor of all covenants
and conditions contained in the Notes, or in any renewals, replacements,
extensions or modifications thereof, and in all other instruments securing or
evidencing the Obligations, as defined, and (b) to secure in accordance with
Section 29-3-50, as amended, Code of Laws of South Carolina (1976) all future
advances and re-advances that may subsequently be made to or on behalf of
Mortgagor by Mortgagee, evidenced by the aforesaid Notes or any other promissory
notes, Documents, as


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<PAGE>   3


defined in the Master Credit Agreement, and all renewals, replacements,
extensions or modifications thereof; and all other indebtedness of Mortgagor to
Mortgagee now or hereafter existing, whether direct or indirect, the maximum
amount of all indebtedness outstanding at any one time secured hereby not to
exceed twice the aggregate face amount of the Notes plus interest thereon, all
charges and expenses of collection incurred by Mortgagee, including court costs,
and reasonable attorneys' fees; and to the extent provided in the Notes,
interest or discount will be deferred, accrued or capitalized; and (c) to also
charge the Secured Properties, as defined in the Master Credit Agreement, and
all properties, interests and rights described herein with such payment,
performance and observance.

         4.       Any reference contained in the Mortgage, as amended herein, to
the "Credit Agreement," the "Revolving Credit Agreement," the "1987 Credit
Agreement" or any other loan or credit agreement shall hereinafter be deemed to
be a reference to the Master Credit Agreement.

         5.       The final payment of the Notes shall be the maturity dates as
respectively set out in the Master Credit Agreement for each of the Notes, but
no later than October 31, 2008.

         IT IS MUTUALLY AGREED by and between the parties hereto that this
Agreement shall become a part of the Mortgage by reference and that nothing
herein contained shall impair the security now held for the indebtedness
represented by the Notes, nor shall waive, annul, vary or affect any provision,
condition, covenant or agreement contained in the Notes and the Mortgage except
as herein amended, nor affect or impair any rights, powers or remedies under the
Notes and the Mortgage as hereby amended. Furthermore, the Mortgagee does hereby
reserve all rights and remedies it may have as against all parties who may be or
may hereafter become primarily or secondarily liable for the repayment of the
indebtedness evidenced by the Notes.

         The execution and delivery hereof shall not constitute a novation or
modification of the lien, encumbrance or security title of the Mortgage, which
Mortgage shall retain its priority as originally filed for record. Mortgagor
expressly agrees that the Mortgage remains in full force and effect and that
Mortgagor has no right to setoff, counterclaim or defense to the lien granted
thereby.

         This Agreement shall be governed by and construed in accordance with
the laws of the State of South Carolina without regard to principles of conflict
of laws.

         Any reference contained in the Notes or the Mortgage, as amended
herein, to the Mortgage shall hereinafter be deemed to be a reference to such
document as amended hereby. In amplification thereof, the Mortgage, as amended
hereby, shall secure the Notes, and any further modifications, renewals or
extensions thereof.

         This Agreement shall be binding upon and inure to the benefit of any
assignee or the respective successors and assigns of the parties hereto.

         This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may execute any of such
counterparts.


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         The laws 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 days after the sale of the mortgaged property 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 MORTGAGED PROPERTY.

         IN WITNESS WHEREOF, this instrument has been executed under seal by the
parties hereto and delivered on the date and year first above written.

                                             MORTGAGEE:

                                             WACHOVIA BANK, N.A.

SIGNED, SEALED AND DELIVERED                 By: /s/ Donald R. Sanders
IN THE PRESENCE OF:                             --------------------------------
                                             Its:     Senior Vice-President

  /s/ Tom Cullen
----------------------------------
(Witness)

  /s/ Steve D. HeyBoer
----------------------------------
(Witness)

                                             MORTGAGOR:
  /s/ Tom Cullen
----------------------------------           SEA PINES ASSOCIATES, INC.
(Witness)
                                             By: /s/ C. W. Flynn
  /s/ Steve D. HeyBoer                          --------------------------------
----------------------------------           Its: Chairman
(Witness)                                        -------------------------------

                                             (CORPORATE SEAL)


                                             SEA PINES COMPANY, INC.
  /s/ Tom Cullen
----------------------------------
(WITNESS)                                    By: /s/ Michael E. Lawrence
  /s/ Steve D. HeyBoer                          --------------------------------
----------------------------------           Its: President
(Witness)                                        -------------------------------

                                             (CORPORATE SEAL)


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STATE OF SOUTH CAROLINA
                                     PROBATE
COUNTY OF BEAUFORT

PERSONALLY appeared before me the undersigned witness, who, being duly sworn,
says that (s)he saw Charles W. Flynn, Chairman of Sea Pines Associates, Inc.
sign the foregoing instrument, and that (s)he with the other witness named above
witnessed the execution and delivery thereof as the act and deed of the said
corporation.

                                             /s/ Tom S. Cullen
                                           -------------------------------------
                                                   (Signature of Witness)

SWORN to before me this 4th
day of November, 1998.  ---


  /s/ Patricia W. Siebert
----------------------------
Notary Public,
State of South Carolina
My commission expires: 10/19/2002
                      -----------

[Notarial Seal]




STATE OF SOUTH CAROLINA
                                     PROBATE
COUNTY OF BEAUFORT

PERSONALLY appeared before me the undersigned witness, who, being duly sworn,
says that (s)he saw Donald R. Sanders, Senior Vice President of Wachovia
Bank, N.A., sign the foregoing instrument, and that (s)he with the other witness
named above witnessed the execution and delivery thereof as the act and deed of
the said Wachovia Bank, N.A.

                                             /s/ Tom S. Cullen
                                           -------------------------------------
                                                 (Signature of Witness)

SWORN to before me this 4th
day of November, 1998.  ---


  /s/ Patricia W. Siebert
----------------------------
Notary Public,
State of South Carolina
My commission expires: 10/19/2002

[Notarial Seal]


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<PAGE>   6


STATE OF SOUTH CAROLINA
                                     PROBATE
COUNTY OF BEAUFORT

PERSONALLY appeared before me the undersigned witness, who, being duly sworn,
says that (s)he saw Michael E. Lawrence, President of Sea Pines Company, Inc.
sign the foregoing instrument, and that (s)he with the other witness named above
witnessed the execution and delivery thereof as the act and deed of the said
corporation.

                                             /s/ Tom S. Cullen
                                           -------------------------------------
                                                 (Signature of Witness)

SWORN to before me this 4th
day of November, 1998.  ---


  /s/ Patricia W. Siebert
----------------------------
Notary Public,
State of South Carolina
My commission expires: 10/19/2002


[Notarial Seal]


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