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                                                                EXHIBIT 10.3.5


Return to:
Charles A. Brake, Jr., Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia  30309-3424

                   DEED TO SECURE DEBT AND SECURITY AGREEMENT

        THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (the "Security Deed"),
executed this 17th day of October 1996, by ROBERTS PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership (the "Borrower"), having its principal office at
8010 Roswell Road, Suite 120, Atlanta, Georgia 30350. Said Security Deed is
being given to secure the payment of two notes of even date herewith one of
which is payable to the order of NATIONWIDE LIFE INSURANCE COMPANY, an Ohio
corporation, having its principal office at One Nationwide Plaza, Columbus, Ohio
43215-2220 or at such other place either within or without the State of Ohio, as
Lender may from time to time designate and the other of which is payable to the
order of NATIONWIDE LIFE & ANNUITY INSURANCE COMPANY, an Ohio corporation, whose
address is c/o Nationwide Life Insurance Company, One Nationwide Plaza,
Columbus, Ohio 43215-2220 or at such other place either within or without the
State of Ohio, as Lender may from time to time designate, and any subsequent
holder(s) hereof, (collectively the "Lender").

                               W I T N E S S E T H

        WHEREAS, the Borrower is justly indebted to the Lender in the aggregate
sum of NINE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($9,250,000.00), with interest thereon, as set forth in a certain Real Estate
Note A of even date herewith in the sum of Seven MILLION TWO HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($7,250,000.00) payable to Nationwide Life Insurance
Company and a certain Real Estate Note B of even date herewith in the sum of TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00) payable to Nationwide Life & Annuity
Insurance Company (said Real Estate Notes A and Note B are hereinafter
collectively referred to as the "Note"), which Note shall be due and payable on
or before November 15, 2003 ; and

        WHEREAS, the Lender, as a condition precedent to the extension of credit
and the making of the loan evidenced by the Note, has required that the Borrower
provide Lender with security for the repayment of the indebtedness evidenced by
the Note as well as for the performance, observance and discharge by the
Borrower of the various covenants, conditions and agreements made by the
Borrower to, with, in favor of and for the benefit of Lender with respect to
said indebtedness and such security;

        NOW THEREFORE, in consideration of and in order to secure the repayment
of the indebtedness evidenced and represented by the Note, together with
interest on such indebtedness, as well as the payment of all other sums of money
secured hereby, as hereinafter provided; and to secure the observance,
performance and discharge by the Borrower of all covenants, conditions and
agreements set forth in the Note, this Security Deed and in all other documents
and instruments executed and delivered by the Borrower to and in favor of Lender
for the purpose of further securing the repayment of the indebtedness evidenced
and represented by the Note; and in order to charge the properties, interests
and rights hereinafter described with such payment, observance, performance and
discharge; and in consideration of the sum of one dollar paid by Lender to
Borrower and other good and valuable considerations, the receipt and sufficiency
of which are hereby acknowledged, the Borrower does hereby grant, bargain, sell,
alien, remise, release, convey, assign, transfer, pledge, deliver, set over,
hypothecate, warrant and confirm unto Lender, its successors and assigns
forever, all of Borrower's right, title and interest in and to the following
described properties, rights and interests and all replacements of,
substitutions for, and additions thereto (all of which are hereinafter together
referred to as the "Property"), to wit:

        ALL THAT certain piece, parcel or tract of land or real property of
which the Borrower is now seized and in actual or constructive possession,
situate in Gwinnett County, Georgia more particularly described on Exhibit "A"
attached hereto and by this reference made a part hereof (hereinafter referred
to as the "Real Property");

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        TOGETHER WITH all buildings, structures and other improvements of any
kind, nature or description now or hereafter erected, constructed, placed or
located upon said Real Property (which buildings, structures and other
improvements are hereinafter sometimes together referred to as the
"Improvements"), including, without limitation, any and all additions to,
substitutions for or replacements of such Improvements;

        TOGETHER WITH all minerals, royalties, gas rights, water, water rights,
water stock, flowers, shrubs, lawn plants, crops, trees, timber and other
emblements now or hereafter located on, under or above all or any part of the
Real Property;

        TOGETHER WITH all and singular, the tenements, hereditaments, strips and
gores, rights-of-way, easements, privileges and other appurtenances now or
hereafter belonging or in any way appertaining to the Real Property, including,
without limitation, all right, title and interest of the Borrower in any
after-acquired right, title, interest, remainder or reversion, in and to the
beds of any ways, streets, avenues, roads, alleys, passages and public places,
open or proposed, in front of, running through, adjoining or adjacent to said
Real Property (hereinafter sometimes together referred to as "Appurtenances");

        TOGETHER WITH any and all leases, contracts, rents, royalties, issues,
revenues, profits, proceeds, income and other benefits, including accounts
receivable, of, accruing to or derived from said Real Property, Improvements and
Appurtenances and any business or enterprise presently situated or hereafter
operated thereon and therewith (hereinafter sometimes together referred to as
the "Rents");

        TOGETHER WITH, any and all awards or payments, including interest
thereon, and the right to receive the same, as a result of (a) the exercise of
the right of eminent domain, (b) the alteration of the grade of any street, or
(c) any other injury to, taking of, or decrease in the value of, the Property to
the extent of all amounts which may be secured by this Security Deed at the date
of any such award or payment including but not limited to Reasonable Attorneys'
Fees (as hereinafter defined), costs and disbursements incurred by the Lender in
connection with the collection of such award or payment;

        AS WELL AS all of the right, title and interest of Borrower in and to
all fixtures, goods, chattels, construction materials, furniture, furnishings,
equipment, machinery, apparatus, appliances, and other items of personal
property, whether tangible or intangible, of any kind, nature or description,
whether now owned or hereafter acquired by the Borrower, including, without
limitation, improvements including furnaces, steam boilers, hot-water boilers,
oil burners, pipes, radiators, air-conditioning and sprinkler systems, gas and
electric fixtures, carpets, rugs, shades, awnings, screens, elevators, motors,
dynamos, cabinets, and all other furnishings, tools, equipment and machinery,
appliances, building supplies, materials, general intangibles, contract rights,
accounts receivable, business records, fittings and fixtures of every kind,
which is, are or shall hereafter be located upon, attached, affixed to or used
or useful, either directly or indirectly, in connection with the complete and
comfortable use, occupancy and operation of said Real Property and Improvements
as an apartment complex, or any other business, enterprise or operation as may
hereafter be conducted upon or with said Real Property, Improvements and
Appurtenances, including, without limitation, any and all licenses, permits or
franchises, used or required in connection with such use, occupancy or
operation, as well as the proceeds thereof or therefrom regardless of form
(hereinafter sometimes together referred to as "Fixtures and Personal Property,"
which term expressly excludes any toxic waste or substances deemed hazardous
under federal, state or local laws). The Borrower hereby expressly grants to
Lender a present security interest in and a lien and encumbrance upon the
Fixtures and Personal Property;

        TO HAVE AND HOLD the foregoing Property, and the rights hereby granted
for the use and benefit of the Lender and its successors and assigns in fee
simple forever;

        AND the Borrower covenants and warrants with and to the Lender that the
Borrower is indefeasibly seized of the Property and has good right, full power,
and lawful authority to convey and encumber all of the same as aforesaid; that
the Borrower hereby fully warrants the title to the 

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Property and will defend the same and the validity and priority of the lien and
encumbrance of this Security Deed against the lawful claims of all persons
whomsoever, subject only to the Permitted Exceptions; and the Borrower further
warrants that the Property is free and clear of all liens and encumbrances of
any kind, nature or description, save and except only (with respect to said Real
Property, Improvements and Appurtenances and Fixtures and Personal Property) for
real property taxes for years subsequent to 1995 and those matters set forth in
Exhibit "B" attached hereto and by this reference made a part hereof
(hereinafter referred to as the "Permitted Exceptions").

        PROVIDED ALWAYS, however, that if the Borrower shall pay unto the Lender
the indebtedness evidenced by the Note, and if the Borrower shall duly, promptly
and fully perform, discharge, execute, effect, complete and comply with and
abide by each and every one of the agreements, conditions and covenants of the
Note, this Security Deed and all other documents and instruments executed as
further evidence of or as security for the indebtedness secured hereby, then
this Security Deed and the estates and interests hereby granted and created
shall cease, terminate and be null and void, and shall be discharged of record
at the expense of Borrower, which expense Borrower agrees to pay.

        This conveyance is intended (i) to constitute a security agreement as
required under the Uniform Commercial Code of Georgia and (ii) to operate and is
to be construed as a deed passing the title to the Property to the Lender and is
made under those provisions of the existing laws of the State of Georgia
relating to deeds to secure debt, and not as a mortgage, and is given to secure
(a) the debt evidenced by the Note (which is incorporated herein by reference
and to which reference is made for all purposes, and which Borrower acknowledges
evidences an indebtedness arising from a business loan from Lender to Borrower
for the sole purpose of permitting Borrower to carry on its business) in the
aggregate principal face amount of Nine Million Two Hundred Fifty Thousand and
No/100 Dollars ($9,250,000.00), or so much thereof as may have been advanced and
remain outstanding from time to time, with interest at the rate of 7.15% percent
per annum; (b) any and all renewals and extensions of the Note; (c) each and
every covenant, obligation and undertaking of the Borrower in this Security Deed
or in that certain Assignment of Leases, Rents and Profits of even date herewith
from Borrower to Lender; and (d) any and all other indebtedness which may
hereafter be owing by the Borrower to the Lender which is incurred or created by
advances made by the Lender to or on behalf of or for the account of the
Borrower in accordance with the provisions of this Security Deed or otherwise
permitted by the provisions of this Security Deed. Principal and interest shall
be payable in installments the last of which shall, unless the maturity thereof
is accelerated by the holder of the Note or the principal amount of the Note is
prepaid, be due and payable on November 15, 2003.

        The Borrower, for the benefit of the Lender, and is successors and
assigns, does hereby expressly covenant and agree:

        1. PAYMENT OF PRINCIPAL AND INTEREST. To pay the principal of the
indebtedness evidenced by the Note, together with all interest thereon, in
accordance with the terms of the Note, promptly at the times, at the place and
in the manner that said principal and interest shall become due, and to promptly
and punctually pay all other sums required to be paid by the Borrower pursuant
to the terms of the Note, this Security Deed and all other documents and
instruments executed as further evidence of, as additional security for or in
connection with the indebtedness evidenced by the Note and secured by this
Security Deed (hereinafter together referred to as the "Loan Documents").

        2. PERFORMANCE OF OTHER OBLIGATIONS. To perform, comply with and abide
by each and every one of the covenants, agreements and conditions contained and
set forth in the Note, this Security Deed and the other Loan Documents and to
comply with all laws, ordinances, rules, regulations and orders of governmental
authorities now or hereafter affecting the Property or requiring any alterations
or improvements to be made thereon, and perform all of its obligations under any
covenant, condition, restriction or agreement of record affecting the Property
and to insure that at all times the Property constitutes one or more legal lots
capable of being conveyed without violation of any subdivision or platting laws,
ordinances, rules or regulations, or other laws relating to the division or
separation of real property.


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        3. PRESERVATION AND MAINTENANCE OF PROPERTY; ACCESSIBILITY; HAZARDOUS
WASTE. To keep all Improvements now existing or hereafter erected on the Real
Property in good order and repair and not to do or permit any waste, impairment
or deterioration thereof or thereon, nor to alter, remove or demolish any of the
Improvements or any Fixtures or Personal Property attached or appertaining
thereto, without the prior written consent of the Lender, nor to initiate, join
in or consent to any change in any private restrictive covenant, zoning
ordinance or other public or private restrictions limiting or defining the uses
which may be made of the Property or any part thereof, nor to do or permit any
other act whereby the Property shall become less valuable, be used for purposes
contrary to applicable law or be used in any manner which will increase the
premium for or result in a termination or cancellation of the insurance
hereinafter required to be kept and maintained on the Property. In furtherance
of, and not by way of limitation upon the foregoing covenant, Borrower shall
effect such repairs as the Lender may reasonably require, and from time to time
make all needful and proper replacements so that said Improvements,
Appurtenances, Fixtures and Personal Property will, at all times, be in good
condition, fit and proper for the respective purposes for which they were
originally erected or installed. Borrower at all times shall maintain the
Property in full compliance with all applicable provisions of all federal, state
or municipal laws, ordinances, rules and regulations currently in existence or
hereafter enacted or rendered governing accessibility for the disabled,
including but not limited to The Architectural Barriers Act of 1988, The
Rehabilitation Act of 1973, The Fair Housing Act of 1988 and The Americans With
Disabilities Act of 1990 (hereinafter, collectively the "Accessibility Laws").
Borrower at all times shall keep the Property and ground water of the Property
free of "Hazardous Materials" (as hereinafter defined). Borrower shall not
permit its tenants or any third party requiring the consent of Borrower to enter
the Property, to use, generate, manufacture, store, release, threaten release,
or dispose of Hazardous Materials in, on or about the Property or the ground
water of the Property in violation of any federal, state or municipal law,
decision, statute, rule, ordinance or regulation currently in evidence or
hereinafter enacted or rendered ("Hazardous Waste Laws"). Borrower shall give
Lender prompt written notice of any claim by any person, entity, or governmental
agency that a significant release or disposal of Hazardous Materials has
occurred on the Property. The Borrower, through its professional engineers and
at its cost, shall promptly and thoroughly investigate suspected Hazardous
Materials contamination of the Property. Borrower shall forthwith remove,
repair, clean up, and/or detoxify any Hazardous Materials from the Property or
the ground water of the Property whether or not such actions are required by
law, and whether or not Borrower was responsible for the existence of the
Hazardous Materials in, on or about the Property or the ground water of the
Property. "Hazardous Materials" shall include but not be limited to substances
defined as "hazardous substances," "hazardous materials," or "toxic substances,"
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Sec. 9601, et. seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et. seq.; the Resources Conservation and
Recovery Act, 42 U.S.C. Sec. 6901 et. seq.; the Toxic Substances Control Act, 15
U.S.C. Sec. 2601 et. seq.; the Clean Air Act, 42 U.S.C. Sec. 7401 et. seq.; and
the Clean Water Act, 33 U.S.C. Sec. 1251 et. seq.

        Borrower hereby agrees to indemnify Lender and hold Lender harmless from
and against any and all losses, liabilities, damages, injuries, costs, expenses
and claims of any and every kind whatsoever paid, incurred or suffered by or
asserted against Lender for, with respect to, or as a direct or indirect result
of the non-compliance of the Property with the Accessibility Laws and/or the
presence on, under or about the Property, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or release from, the Property of any
Hazardous Materials (including, without limitation, any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under any
Hazardous Waste Laws, regardless of whether or not caused by, or within the
control of, Borrower).

        Lender, and/or its agents, shall have the right and shall be permitted,
but shall not be required, at all reasonable times, to enter upon and inspect
the Property to insure compliance with the foregoing covenants and any and all
other covenants, agreements and conditions set forth in this Security Deed.
Liability under this Paragraph of this Security Deed shall extend beyond
repayment of the Note and compliance with the terms of this Security Deed;
provided, however, Borrower shall have no liability under this Paragraph 3 as to
Hazardous Materials: (a) 


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if the Property becomes contaminated subsequent to Lender's acquisition of the
Property by foreclosure, acceptance by Lender of a deed in lieu thereof, or
subsequent to any transfer of ownership of the Property which was approved or
authorized by Lender in writing, provided that such transferee assumes all
obligations of Borrower with respect to Hazardous Materials pursuant to this
Security Deed; or (b) at such time Borrower provides Lender an environmental
assessment report acceptable to Lender showing the Property to be free of
Hazardous Materials and not in violation of Hazardous Waste Laws. The burden of
proof under this Paragraph with regard to establishing the date upon which
Hazardous Material was placed or appeared in, on or under the Property shall be
upon Borrower.


        4. PAYMENT OF TAXES, ASSESSMENTS AND OTHER CHARGES. To pay all and
singular such taxes, assessments and public charges as are already levied or
assessed or that may be hereafter levied or assessed upon or against the
Property, when the same shall become due and payable according to law, before
the same become delinquent, and before any interest or penalty shall attach
thereto, and to deliver official receipts evidencing the payment of the same to
the Lender not later than thirty (30) days following the payment of the same.
Borrower shall have the right to contest, in good faith, the proposed assessment
of ad valorem taxes or special assessments by governmental authorities having
jurisdiction of the Property; provided, however, the Borrower shall give written
notice thereof to Lender and Lender may, in its sole discretion, require
Borrower to post a bond or other collateral satisfactory to Lender in connection
with any such action by Borrower; provided further, however, that so long as
there is no default hereunder (which is not cured within any applicable cure
period, if any) Lender agrees not to require Borrower to post a bond or other
collateral if (i) Borrower is appealing ad valorem taxes in the normal course of
Borrower's business and (ii) no action is taken to commence foreclosure
procedures on the Property or any portion thereof and (iii) the collateral
pledged to Lender to secure the loan evidenced by the Note and this Security
Deed is not otherwise jeopardized in Lender's sole opinion.

        5. PAYMENT OF LIENS, CHARGES AND ENCUMBRANCES. To immediately pay and
discharge from time to time when the same shall become due all lawful claims and
demands of mechanics, materialmen, laborers and others which, if unpaid, might
result in, or permit the creation of, a lien, charge or encumbrance upon the
Property or any part thereof, or on the rents, issues, income, revenues, profits
and proceeds arising therefrom and, in general, to do or cause to be done
everything necessary so that the lien of this Security Deed shall be fully
preserved at the cost of the Borrower, without expense to the Lender. Borrower
shall have the right to contest, in good faith and in accordance with applicable
laws and procedures, mechanic's and materialmen's liens filed against the
Property; provided, however, that Borrower shall give written notice thereof to
Lender, and Lender may at its sole option require Borrower to post a bond or
other collateral satisfactory to Lender (and acceptable to the title company
insuring the Security Deed) in connection with any such action by Borrower.

        6. PAYMENT OF JUNIOR ENCUMBRANCES. To permit no default or delinquency
under any other lien, imposition, charge or encumbrance against the Property,
even though junior and inferior to the lien of this Security Deed; provided,
however, the foregoing shall not be construed to permit any other lien or
encumbrance against the Property.

        7. PAYMENT OF MORTGAGE TAXES. To pay any and all taxes which may be
levied or assessed directly or indirectly upon the Note and this Security Deed
(except for income taxes payable by the Lender) or the debt secured hereby,
without regard to any law which may be hereafter enacted imposing payment of the
whole or any part thereof upon the Lender, its successors or assigns. Upon
violation of this agreement to pay such taxes levied or assessed upon the Note
and this Security Deed, or upon the rendering by any court of competent
jurisdiction of a decision that such an agreement by the Borrower is legally
inoperative, or if any court of competent jurisdiction shall render a decision
that the rate of said tax when added to the rate of interest provided for in the
Note exceeds the then maximum rate of interest allowed by law, then, and in any
such event, the debt hereby secured shall, at the option of the Lender, its
successors or assigns, become immediately due and payable, anything contained in
this Security Deed or in the Note secured hereby notwithstanding, without the
imposition of a Prepayment 


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Premium (as defined in the Note). The additional amounts which may become due
and payable hereunder shall be part of the debt secured by this Security Deed.

        8. HAZARD INSURANCE. To continuously, during the term hereof, keep the
Improvements and the Fixtures and Personal Property now or hereafter existing,
erected, installed and located in or upon the Real Property insured with
extended coverage insurance against loss or damage resulting from fire,
windstorm, flood (but only if any of the Improvements are located in a flood
plain), sinkhole and such other hazards, casualties, contingencies and perils,
including, without limitation, other risks insured against by persons operating
like properties in the locality of the Property, on such forms as may be
required by Lender, covering the Property in the amount of the full replacement
cost thereof (provided that Borrower provides a replacement cost endorsement
satisfactory to Lender; otherwise, the amount of such insurance shall not be
less than the difference between the outstanding balance of the Note and eighty
(80%) percent of the then appraised value of the Land and Improvements as
determined by Lender in its sole discretion), and covering all loss or abatement
of rental or other income without provision for co-insurance in an amount equal
to the scheduled rental income of the Property for a period of twelve (12)
months, or if applicable, business interruption insurance in an amount
sufficient to pay debt service, operating expenses, taxes and insurance for the
Property for twelve (12) months, and covering loss by flood (if the Property
lies in a specified Flood Hazard Area as designated on the Department of Housing
and Urban Development Maps, or other flood prone designation) in an amount equal
to the outstanding principal balance of the indebtedness secured hereby or such
other amount of coverage as approved by Lender. All such insurance shall be
carried with such company or companies as may be acceptable to the Lender, which
company or companies shall have a current rating equivalent to at least A:VIII
as shown in Best's Key Rating Guide, and the original policy or policies and
renewals thereof (or duplicate originals or certified copies thereof), together
with receipts evidencing payment of the premium therefor, shall be deposited
with, held by and are hereby assigned to Lender as additional security for the
indebtedness secured hereby. Each such policy of insurance shall contain a
non-contributing loss payable clause in favor of and in form acceptable to
Lender and shall provide for not less than thirty (30) days' prior written
notice to Lender of intent to modify, cancel or terminate or the expiration of
such policies of insurance. Not less than fifteen (15) days prior to the
expiration dates of each policy required of the Borrower hereunder, Borrower
will deliver to Lender a renewal policy or policies or a certified copy thereof
marked "premium paid" or accompanied by other evidence of payment and renewal
satisfactory to Lender (Lender agrees that a binder for a renewal policy
accompanied by a copy of an invoice for the premium associated therewith (which
may show that the premium can be paid in quarterly installments) shall be
satisfactory evidence of payment and renewal provided that Borrower delivers to
Lender evidence of the payment of such premium on or before the date the premium
(or installments thereof, if applicable) is due); and in the event of
foreclosure of or exercise of the power of sale in this Security Deed, any
purchaser or purchasers of the Property shall succeed to all rights of the
Borrower, including any rights to unearned premiums, in and to all insurance
policies assigned and delivered to Lender pursuant to the provisions of this
Paragraph 8.

        In the event of loss by reason of hazards, casualties, contingencies or
perils for which insurance has been required by the Lender hereunder, the
Borrower shall give immediate notice thereof to the Lender, and the Lender is
hereby irrevocably appointed attorney-in-fact coupled with an interest, for the
Borrower to, at Lender's option, make proof of loss if not made promptly by the
Borrower, and each insurance company concerned is hereby notified, authorized
and directed to make payment for such loss directly to the Lender, instead of to
the Borrower and Lender jointly, and Borrower hereby authorizes Lender to adjust
and compromise any losses for which insurance proceeds are payable under any of
the aforesaid insurance policies and, after deducting the costs of collection,
to apply the proceeds of such insurance, at its option, as follows: (a) to the
restoration or repair of the insured Improvements, Fixtures and Personal
Property, provided that, in the opinion and sole discretion of the Lender, such
restoration or repair is reasonably practical and, provided further, that, in
the opinion and sole discretion of the Lender, either: (i) the insurance
proceeds so collected are sufficient to cover the cost of such restoration or
repair of the damage or destruction with respect to which such proceeds were
paid, or (ii) the insurance proceeds so collected are not sufficient alone to
cover the cost of such restoration or repair, but are sufficient therefor when
taken together with funds provided and 

                                      -6-
<PAGE>   7


made available by the Borrower from other sources; in which event the Lender
shall make such insurance proceeds available to the Borrower for the purpose of
effecting such restoration or repair; but Lender shall not be obligated to see
to the proper application of such insurance proceeds nor shall the amount of
funds so released or used be deemed to be payment of or on account of the
indebtedness secured hereby, or (b) to the reduction of the outstanding
principal indebtedness secured hereby, notwithstanding the fact that the amount
owing thereon may not then be due and payable or that said indebtedness is
otherwise adequately secured, in which event such proceeds shall be applied at
par against the indebtedness secured hereby and the monthly payment due on
account of such indebtedness shall be adjusted accordingly. None of such actions
taken by the Lender shall be deemed to be or result in a waiver or impairment of
any equity, lien or right of the Lender under and by virtue of this Security
Deed, nor will the application of such insurance proceeds to the reduction of
the indebtedness serve to cure any default in the payment thereof. In the event
of foreclosure of this Security Deed or other transfer of title to the Property
in extinguishment of the indebtedness secured hereby, all right, title and
interest of the Borrower in and to any insurance policies then in force and
insurance proceeds then payable shall pass to the purchaser or grantee.

        In case of Borrower's failure to keep the Property so insured, Lender or
its assigns, may, at its option (but shall not be required to) effect such
insurance at Borrower's expense.

        Notwithstanding anything set forth in this Paragraph 8 to the contrary,
in the event of loss or damage to the Property by fire or other casualty for
which insurance has been required by Lender and provided by Borrower, and the
amount of such loss or damage does not exceed fifty percent (50%) of the
outstanding principal balance of the Note, the Lender hereby agrees to allow the
proceeds of insurance to be used for restoration of the Property and to release
such insurance proceeds to Borrower as such restoration progresses, provided:

                (a)      Borrower is not in default under any of the terms, 
                         covenants and conditions of this Security Deed, the 
                         Note or any of the Loan Documents evidencing or 
                         securing the Note;

                (b)      [intentionally omitted]

                (c)      The plans and specifications for restoration of the 
                         Property are approved in writing by the Lender;

                (d)      At all times during such restoration, Borrower has
                         deposited with Lender funds which, when added to such
                         insurance proceeds, are sufficient to complete the
                         restoration of the Property as certified by an
                         architect approved by Lender in accordance with the
                         approved plans and specifications and all applicable
                         building codes and zoning ordinances and regulations,
                         and further, that the sufficiency of such funds is
                         certified to Lender by Lender's inspecting
                         architect/engineer;

                (e)      Borrower provides payment and performance bonds and 
                         builder's all risk insurance for such restoration in 
                         form and amount acceptable to Lender;

                (f)      The insurer under such policies of fire or other
                         casualty insurance does not assert any defense to
                         payment under such policies against Lender, Borrower or
                         any tenant of the Property;

                (g)      The insurance proceeds held by Lender shall be 
                         disbursed no more often than once per month and in not
                         more than five (5) increments of amounts of not less
                         than FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00)
                         each (except the final disbursement of such proceeds
                         which may be in an amount less than FIFTY THOUSAND AND
                         NO/100 DOLLARS ($50,000.00). Lender's obligation to
                         make any such disbursement shall be conditioned upon
                         Lender's receipt of a written certification from the
                         Lender's inspecting architect/engineer that all
                         construction and work for 

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<PAGE>   8


                         which such disbursement is requested has been 
                         completed in accordance with the approved plans and
                         specifications and all applicable building codes,
                         zoning ordinances and all other local or federal
                         governmental regulations and, further, that Borrower
                         has deposited with Lender sufficient funds to complete
                         such restoration in accordance with subparagraph (d)
                         above;

                (h)      Lender shall have the option, upon the completion of
                         such restoration of the Property, to apply any surplus
                         insurance proceeds remaining after the completion of
                         such restoration, at par, to the reduction of the
                         indebtedness secured by this Security Deed;
                         notwithstanding the fact that the amount owing thereon
                         may not then be due and payable or that said
                         indebtedness is otherwise adequately secured; and

                (i)      Lender shall be entitled to require and to impose such
                         other conditions to the release of such insurance
                         proceeds for restoration of the Property as would be
                         customarily or reasonably required and imposed by a
                         construction lender for a project of similar nature and
                         cost.

        9. LIABILITY INSURANCE. To carry and maintain such comprehensive general
liability insurance as may from time to time be required by Lender, taking into
consideration the type of property insured and the corresponding liability
exposure, on forms, in amounts and with such company or companies as may be
acceptable to Lender. All such comprehensive general liability insurance shall
be carried with a company or companies as may be acceptable to Lender, which
company or companies shall have a current rating equivalent to at least A:VIII
as shown in Best's Key Rating Guide. Such policy or policies of insurance shall
name Lender as an additional insured and shall provide for not less than thirty
(30) days' prior written notice to Lender of modification, cancellation,
termination or expiration of such policy or policies of insurance. Not less than
fifteen (15) days prior to the expiration dates of such policy or policies,
Borrower will deliver to Lender a renewal policy or policies or a certified copy
thereof marked "premium paid" or accompanied by other evidence of payment and
renewal satisfactory to Lender (Lender agrees that a binder for a renewal policy
accompanied by a copy of an invoice for the premium associated therewith (which
may show that the premium can be paid in quarterly installments) shall be
satisfactory evidence of payment and renewal provided that Borrower delivers to
Lender evidence of the payment of such premium on or before the date the premium
(or installments thereof, if applicable) is due). The original policy or
policies and all renewals thereof (or duplicate originals or certified copies
thereof), together with receipts evidencing payment of the premium therefor,
shall be deposited with, held by and are hereby assigned to Lender as additional
security for the indebtedness secured hereby.

        10. COMPLIANCE WITH LAWS. To observe, abide by and comply with all
statutes ordinances, laws, orders, requirements or decrees relating to the
Property enacted, promulgated or issued by any federal, state, county or
municipal authority or any agency or subdivision thereof having jurisdiction
over the Borrower or the Property, and to observe and comply with all conditions
and requirements necessary to preserve and extend any and all rights, licenses,
permits (including, but not limited to, zoning variances, special exceptions and
nonconforming uses), privileges, franchises and concessions which are applicable
to the Property or which have been granted to or contracted for by Borrower in
connection with any existing, presently contemplated or future use of the
Property.

        11. MAINTENANCE OF PERMITS. To obtain, keep and constantly maintain in
full force and effect during the entire term of this Security Deed, all
certificates, licenses and permits necessary to keep the Property operating as
an apartment complex project, and, except as specifically provided for in this
mortgage, not to assign, transfer or in any manner change such certificates,
licenses or permits without first receiving the written consent of the Lender.

        12. OBLIGATIONS OF BORROWER AS LESSOR. To perform every obligation of
the Borrower (as the lessor) and enforce every obligation of the lessee in any
and every lease or other occupancy agreement affecting the Property or any part
thereof (hereinafter referred to as 

                                      -8-
<PAGE>   9


the "Occupancy Leases"), and not to modify, alter, waive or cancel any such
Occupancy Leases or any part thereof, nor collect for more than thirty (30) days
in advance any rents that may be collectible under any such Occupancy Leases
and, except as provided for in this Security Deed, not to assign any such
Occupancy Lease or any such rents to any party other than Lender, without the
prior written consent of the Lender. In the event of default under any such
Occupancy Lease by reason of failure of the Borrower to keep or perform one or
more of the covenants, agreements or conditions thereof, the Lender is hereby
authorized and empowered, and may, at its sole option, remedy, remove or cure
any such default, and further, Lender may, at its sole option and in its sole
discretion, but without obligation to do so, pay any sum of money deemed
necessary by it for the performance of said covenants, agreements and
conditions, or for the curing or removal of any such default, and incur all
expenses and obligations which it may consider necessary or reasonable in
connection therewith, and Borrower shall repay on demand all such sums so paid
or advanced by Lender together with interest thereon until paid at the lesser of
either (i) the highest rate then allowed by the laws of the State of Georgia,
or, if controlling, the laws of the United States, or (ii) the then-applicable
interest rate of the Note plus five hundred (500) basis points; all of such
sums, if unpaid, shall be added to and become part of the indebtedness secured
hereby. All such Occupancy Leases hereafter made shall be subject to the
approval of Lender and (a) shall be at competitive market rental rates then
prevailing in the geographic area for apartment complexes comparable to the
Property and (b) at Lender's option shall be superior or subordinate in all
respects to the lien of this Security Deed. Provided, however, that the Lender
shall not require approval in advance of any Occupancy Leases which conform to
the Borrower's Form Lease (as hereinafter defined) as previously approved by
Lender, except as set forth below. Neither the right nor the exercise of the
right herein granted unto Lender to keep or perform any such covenants,
agreements, or conditions as aforesaid shall preclude Lender from exercising its
option to cause the whole indebtedness secured hereby to become immediately, but
subject to the notice and cure period in Paragraph 23, due and payable by reason
of Borrower's default in keeping or performing any such covenants, agreements or
conditions as hereinabove required.

        Lender has heretofore approved a form of Occupancy Lease to be used by
Borrower in connection with the Property (hereinafter referred to as the "Form
Lease"). Borrower shall not, without the prior written consent of the Lender,
modify or alter the Form Lease in any material respect. In addition Borrower
shall not, without the prior written consent of Lender, surrender or terminate
(except in the ordinary course of business), either orally or in writing, any
Occupancy Lease now existing or hereafter made for all or part of the Property,
permit an assignment or sublease of any such Occupancy Lease, or request or
consent to the subordination of any Occupancy Lease to any lien subordinate to
this Security Deed. Upon request, the Borrower shall furnish the Lender with
copies of all executed Occupancy Leases of all or any part of the Property now
existing or hereafter made, and Borrower shall assign to the Lender (which
assignment shall be in form and content acceptable to Lender), as additional
security for the Note, all Occupancy Leases now existing or hereafter made of
all or any part of the Property.

        13. MAINTENANCE OF PARKING AND ACCESS; PROHIBITION AGAINST ALTERATION.
To construct, keep and constantly maintain, as the case may be, all curbs,
drives, parking areas and the number of parking spaces heretofore approved by
the Lender or heretofore or hereafter required by any governmental body, agency
or authority having jurisdiction over the Borrower or the Property, and not to
alter, erect, build or construct upon any portion of the Property, any building
or structure of any kind whatsoever, the erection, building or construction of
which has not been previously approved by Lender in writing, which approval
shall be at the sole discretion of Lender. To the extent any alterations or
improvements are required to be approved by any tenants of the Property, no such
alterations or improvements shall be made unless and until such consent has been
obtained in writing and a copy thereof furnished to Lender.

        14. EXECUTION OF ADDITIONAL DOCUMENTS. To do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages, deeds to
secure debt, assignments, notices of assignments, transfers, assurances and
other instruments, including security agreements and financing statements, as
the Lender shall from time to time require for the purpose of better assuring,
conveying, assigning, transferring and confirming unto the Lender 

                                      -9-
<PAGE>   10


the Property and rights hereby encumbered, created, conveyed, assigned or
intended now or hereafter so to be encumbered, created, conveyed or assigned or
which the Borrower may now be or may hereafter become bound to encumber, create,
convey, or assign to the Lender, or for the purpose of carrying out the
intention or facilitating the performance of the terms of this Security Deed, or
for filing, registering or recording this Security Deed, and to pay all filing,
registration or recording fees and all taxes, costs and other expenses,
including Reasonable Attorneys' Fees (as defined in Paragraph 47), incident to
the preparation, execution, acknowledgment, delivery, and recordation of any of
the same.

        15. AFTER-ACQUIRED PROPERTY SECURED. It is understood and agreed that
all right, title and interest of the Borrower in and to all extensions,
improvements, betterments, renewals, substitutions and replacements of, and all
additions and appurtenances to, the Property hereinabove described, hereafter
acquired by or released to the Borrower, or constructed, assembled or placed by
the Borrower on the Real Property, and all conversions of the security
constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further mortgage, encumbrance, conveyance, assignment or other act
by the Borrower, shall become subject to the lien and security title of this
Security Deed as fully and completely and with the same effect as though now
owned by the Borrower and specifically described herein, but at any and all
times the Borrower will execute and deliver to the Lender any and all such
further assurances, mortgages, deeds to secure debt, conveyances, or assignments
thereof or security interests therein as the Lender may reasonably require for
the purpose of expressly and specifically subjecting the same to the lien of
this Security Deed.

        16. PAYMENTS BY LENDER ON BEHALF OF BORROWER. Should the Borrower fail
to make payment of any taxes, assessments or public charges on or with respect
to the Property before the same shall become delinquent, or shall fail to make
payment of any insurance premiums or other charges, impositions or liens herein
or elsewhere required to be paid by the Borrower, then the Lender, at its sole
option, but without obligation to do so, may make payment or payments of the
same and also may redeem the Property from tax sale without any obligation to
inquire into the validity of such taxes, assessments and tax sales. In the case
of any such payment by the Lender, the Borrower agrees to reimburse the Lender,
upon demand therefor, the amount of such payment and of any fees and expenses
attendant in making the same, together with interest thereon at the lesser of
either (i) the highest rate then allowed by the laws of the State of Georgia, or
if controlling, the laws of the United States, or (ii) the then applicable
interest rate of the Note plus five hundred (500) basis points; and until paid,
such amounts and interest shall be added to and become part of the debt secured
hereby to the same extent that this Security Deed secures the repayment of the
indebtedness evidenced by the Note. In making payments hereby authorized by the
provisions of this Paragraph 16; the Lender may do so whenever, in its sole
judgment and discretion, such advance or advances are necessary or desirable to
protect the full security intended to be afforded by this instrument. Neither
the right nor the exercise of the right herein granted unto the Lender to make
any such payments as aforesaid shall preclude the Lender from exercising its
option to cause the whole indebtedness secured hereby to become immediately due
and payable by reason of the Borrower's default in making such payments as
hereinabove required.

        17. FUNDS HELD BY LENDER FOR TAXES, INSURANCE PREMIUMS, ASSESSMENTS AND
OTHER CHARGES. In order to more fully protect the security of this Security
Deed, Borrower shall deposit with the Lender, together with and in addition to
each monthly payment due on account of the indebtedness evidenced by the Note,
an amount equal to one-twelfth (1/12) of the annual total of such taxes,
insurance premiums, assessments and charges (all as estimated by the Lender in
its sole discretion) so that, at least thirty (30) days prior to the due date
thereof, Lender shall be able to pay in full all such taxes, insurance premiums,
assessments and other charges as the same shall become due, and the Lender may
hold without paying interest and commingle with its general funds the sums so
deposited and apply the same to the payment of said taxes, insurance premiums,
assessments or other charges as they become due and payable. If at any time the
funds so held by Lender are insufficient to pay such taxes, insurance premiums,
assessments or other charges as they become due and payable the Borrower shall
immediately, upon notice and demand by Lender, deposit with Lender the amount of
such 

                                      -10-
<PAGE>   11

deficiency, and the failure on the part of the Borrower to do so shall entitle
the Lender, at its sole option, to make such payments in accordance with its
rights and pursuant to the conditions elsewhere provided in this Security Deed.
Notwithstanding any default under this Security Deed, Lender agrees to apply any
funds deposited by Borrower and being held by Lender pursuant to this paragraph
for the payment of taxes toward the payment of taxes which are then a lien on
the Property. Thereafter, at its sole option, Lender may apply any funds so held
by it pursuant to this Paragraph 17 toward the payment of the indebtedness
secured hereby, notwithstanding the fact that the amount owing thereon may not
then be due and payable or that said indebtedness is otherwise adequately
secured in such order and manner of application as Lender may elect.

        18. CONDEMNATION; EMINENT DOMAIN. All awards and other compensation
heretofore or hereafter made to Borrower and all subsequent owners of the
Property in any taking by eminent domain or recovery for inverse condemnation,
either permanent or temporary, of all or any part of the Property or any
easement or any appurtenance thereto, including severance and consequential
damages and change in grade of any street, are hereby assigned to Lender, and
Borrower hereby irrevocably appoints Lender as its attorney-in-fact, coupled
with an interest, and authorizes, directs and empowers such attorney, at the
option of said attorney, on behalf of Borrower, its successors and assigns, to
adjust or compromise the claim for any such award and alone to collect and
receive the proceeds thereof, to give proper receipts and acquittances therefor
and, after deducting any expenses of collection, at its sole option:

        (i)     to apply the net proceeds as a credit upon the outstanding
                principal balance of the indebtedness secured hereby, as
                selected by Lender, notwithstanding the fact that the amount
                owing thereon may not then be due and payable or that the
                indebtedness is otherwise adequately secured. In the event
                Lender applies such awards to the reduction of the outstanding
                indebtedness evidenced by the Note, such proceeds shall be
                applied at par and the monthly installments due and payable
                under the Note shall be adjusted accordingly; however no such
                application shall serve to cure an existing default in the
                payment of the Note; or

        (ii)    to hold said proceeds without any allowance of interest and make
                the same available for restoration or rebuilding the Property.
                In the event that Lender elects to make said proceeds available
                to reimburse Borrower for the cost of the restoration or
                rebuilding of the buildings or improvements on the Property,
                such proceeds shall be made available in the manner and under
                the conditions that Lender may require as provided under
                Paragraph 8 hereof. If the proceeds are made available by Lender
                to reimburse Borrower for the cost of said restoration or
                rebuilding, any surplus which may remain out of said award after
                payment of such cost of restoration or rebuilding shall be
                applied on account of the indebtedness secured hereby at par
                notwithstanding the fact that the amount owing thereon may not
                then be due and payable or that said indebtedness is otherwise
                adequately secured.

        Borrower further covenants and agrees to give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
and to deliver to Lender copies of any and all papers served in connection with
any proceedings. Borrower further covenants and agrees to make, execute and
deliver to Lender, at any time or times, upon request, free, clear and
discharged of any encumbrance of any kind whatsoever, any and all further
assignments and/or other instruments deemed necessary by Lender for the purpose
of validly and sufficiently assigning all such awards and other compensation
heretofore or hereafter made to Lender (including the assignment of any award
from the United States government at any time after the allowance of the claim
therefor, the ascertainment of the amount thereof and the issuance of the
warrant for payment thereof).

        It shall be a default hereunder if any part of any of the Improvements
situated on the Property shall be condemned by any governmental authority having
jurisdiction, or if lands constituting a portion of the Property shall be
condemned by any governmental authority having jurisdiction, such that the
Property is in violation of applicable parking, zoning or other ordinances, or
fails to comply with the terms of the Occupancy Leases, and in either of said

                                      -11-

<PAGE>   12

events, Lender shall be entitled to exercise any or all remedies provided or
referenced in this Security Deed.

        19. COSTS OF COLLECTION. In the event that the Note secured hereby is
placed in the hands of an attorney for collection, or in the event that the
Lender shall become a party either as plaintiff or as defendant, in any action,
suit, appeal or legal proceeding (including, without limitation, foreclosure,
condemnation, bankruptcy, administrative proceedings or any proceeding wherein
proof of claim is by law required to be filed), hearing, motion or application
before any court or administrative body in relation to the Property or the lien
and security interest granted or created hereby or herein, or for the recovery
or protection of said indebtedness or the Property, or for the foreclosure of
this Security Deed, the Borrower shall save and hold the Lender harmless from
and against any and all costs and expenses incurred by the Lender on account
thereof, including, but not limited to, Reasonable Attorneys' Fees, title
searches and abstract and survey charges, at all trial and appellate levels, and
the Borrower shall repay, on demand, all such costs and expenses, together with
interest thereon until paid at the lesser of either (i) the highest rate then
allowed by the laws of the State of Georgia, or, if controlling, the laws of the
United States, or (ii) the applicable rate of interest of the Note plus five
hundred (500) basis point; all of which sums, if unpaid, shall be added to and
become a part of the indebtedness secured hereby.

        20. DEFAULT RATE. If the entire outstanding balance of the Note is due,
whether at maturity, by acceleration or otherwise, the total amount due, whether
principal, interest or money owing for advancements pursuant to the terms of
this Security Deed or any other Loan Document, shall bear interest until paid at
the lesser of (i) the highest rate then allowed by the laws of the State of
Georgia, or, if controlling, the laws of the United States, or (ii) the then
applicable rate of interest of the Note plus five hundred (500) basis points
(five percent per annum); all of which sums shall be added to and become a part
of the indebtedness secured hereby.

        21. SAVINGS CLAUSE; SEVERABILITY. Notwithstanding any provisions in the
Note or in this Security Deed to the contrary, the total liability for payments
in the nature of interest including but not limited to Prepayment Premiums,
default interest and late fees shall not exceed the limits imposed by laws of
the State of Georgia or the United States of America relating to maximum
allowable charges of interest. Lender shall not be entitled to receive, collect
or apply, as interest on the indebtedness evidenced by the Note, any amount in
excess of the maximum lawful rate of interest permitted to be charged by
applicable law. In the event Lender ever receives, collects or applies as
interest any such excess, such amount which would be excessive interest shall be
applied to reduce the unpaid principal balance of the indebtedness evidenced by
the note. If the unpaid principal balance of such indebtedness is paid in full
any remaining excess shall be paid forthwith to the Borrower. If any clauses or
provisions herein contained operate or would prospectively operate to invalidate
this Security Deed, then such clauses or provisions only shall be held for
naught, as though not herein contained, and the remainder of this Security Deed
shall remain operative and in full force and effect.

        22. BANKRUPTCY, REORGANIZATION OR ASSIGNMENT. It shall be a default
hereunder if the Borrower or any general partner of Borrower shall: (a) consent
to the appointment of a receiver, trustee or liquidator of all or a substantial
part of Borrower's assets, or (b) be adjudicated a bankrupt or insolvent, or
file a voluntary petition in bankruptcy, or admit in writing its inability to
pay its debts as they become due, or (c) make a general assignment for the
benefit of creditors, or (d) file a petition under or take advantage of any
insolvency law, or (e) file an answer admitting the material allegations of a
petition filed against the Borrower or any general partner of Borrower in any
bankruptcy, reorganization or insolvency proceeding or fail to cause the
dismissal of such petition within sixty (60) days after the filing of said
petition, or (f) take action for the purpose of effecting any of the foregoing,
or (g) if any order, judgment or decree shall be entered upon an application of
a creditor of Borrower or any general partner of Borrower by a court of
competent jurisdiction approving a petition seeking appointment of a receiver or
trustee of all or a substantial part of the Borrower's assets or any of
Borrower's general partner's assets and such order, judgment or decree shall
continue unstayed and in effect for a period of sixty (60) days.

                                      -12-
<PAGE>   13


        23. TIME IS OF THE ESSENCE; MONETARY AND NON-MONETARY DEFAULTS. It is
understood by Borrower that time is of the essence hereof in connection with all
obligations of Borrower herein, in the Note, the Assignment (as defined in
Paragraph 34) and any of the other Loan Documents.

        If default be made in the payment of any installment of the Note,
whether of principal or interest, or in the payment of any other sums of money
referred to herein or in the Note, promptly and fully when the same shall be due
and such Monetary Default (as hereinafter defined) remains uncured after the
Monetary Cure Period (as hereinafter defined), if applicable (if the Monetary
Cure Period is not applicable, no notice or demand from Lender to Borrower shall
be required), or in the event a breach or default be made by the Borrower in any
one of the agreements, conditions and covenants of said Note, this Security
Deed, the Assignment or any Loan Documents evidencing or securing the Note, or
in the event that each and every one of said agreements, conditions and
covenants are not otherwise duly, promptly and fully discharged or performed,
and any such Non-Monetary Default (as hereinafter defined) remains uncured for a
period of thirty (30) days after written notice thereof from the Lender to the
Borrower has been delivered in the manner prescribed in Paragraph 41 hereof
(except that if such Non-Monetary Default cannot reasonably be cured within the
30 day period Borrower shall have a reasonable period of time to cure such
default provided that Borrower commences the cure of such default within the 30
day period and thereafter diligently pursues the cure to completion), Lender at
its sole option may thereupon or thereafter declare the indebtedness evidenced
by the Note, as well as all other monies secured hereby, including, without
limitation, all Prepayment Premiums and late payment charges, to be forthwith
due and payable, whereupon the principal of and the interest accrued on the
indebtedness evidenced by the Note and all other sums secured by this Security
Deed at the option of Lender shall immediately become due and payable as if all
of said sums of money were originally stipulated to be paid on such day, and
thereupon, the Lender may avail itself of all rights and remedies provided by
law and may prosecute a suit at law or in equity as if all monies secured hereby
had matured prior to its institution, anything in this Security Deed or in the
Note to the contrary notwithstanding. Lender shall give Borrower notice in the
manner described in Paragraph 41 hereof of, and a 5 day right-to-cure period
("Monetary Cure Period") to cure, any Monetary Default (as hereinafter defined);
provided, however such Monetary Cure Period shall be limited to once per loan
year for the term of the Note. Lender shall have no obligation to give Borrower
notice of any Incurable Default (as hereinafter defined) prior to exercising its
right, power and privilege to accelerate the maturity of the indebtedness
secured hereby.

        As used herein, the term "Monetary Default" shall mean any default which
can be cured by the payment of money such as, but not limited to, the payment of
principal and interest due under the Note, the payment of taxes, assessments and
insurance premiums when due as provided in this Security Deed. As used herein,
the term "Non-Monetary Default" shall mean any default which is not a Monetary
Default or an Incurable Default. As used herein, the term "Incurable Default"
shall mean (i) any voluntary or involuntary sale, assignment, mortgaging,
encumbering or transfer in violation of the covenants contained in Paragraph 30
hereof; or (ii) if Borrower, or its general partner, should make an assignment
for the benefit of creditors, become insolvent, or file a petition in bankruptcy
(including but not limited to, a petition seeking a rearrangement or
reorganization).

        If a default shall occur hereunder and is not timely cured as herein
provided, and, as a result thereof, the indebtedness secured hereby is
accelerated and is due and payable in full, the Lender, at its option, may sell
the Property or any part of the Property at public sale or sales before the door
of the courthouse of the County in which the Property or any part of the
Property is situated, to the highest bidder for cash, in order to pay the
indebtedness secured hereby and accrued interest thereon and insurance premiums,
liens, assessments, taxes and charges, including utility charges, if any, with
accrued interest thereon, and all expenses of the sale and of all proceedings in
connection therewith, including Reasonable Attorney's Fees after advertising the
time, place and terms of sale once a week for four (4) weeks immediately
preceding such sale (but without regard to the number of days) in a newspaper in
which Sheriff's sales are advertised in said County. The foregoing
notwithstanding, the Lender may sell, or cause to be sold, any tangible or
intangible personal property, or any part thereof, and which constitute a part
of the 

                                      -13-
<PAGE>   14

security hereunder, in the foregoing manner, or as may otherwise be provided by
law. The Lender may bid and purchase at any such sale and, if Lender should be
the successful bidder at such sale, may satisfy the Lender's obligation to
purchase pursuant to the Lender's bid by canceling an equivalent portion of any
indebtedness then outstanding and secured hereby. At any such sale, the Lender
may execute and deliver to the purchaser a conveyance of the Property or any
part of the Property in fee simple with full warranties of title and to this
end, the Borrower hereby constitutes and appoints the Lender the agent and
attorney in fact of the Borrower to make such sale and conveyance, and thereby
to divest the Borrower of all right, title and equity that the Borrower may have
in and to the Property and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and attorney in
fact are hereby ratified and confirmed and any recitals in said conveyance or
conveyances as to facts essential to a valid sale shall be binding on the
Borrower. The aforesaid power of sale and agency hereby granted are coupled with
an interest and are irrevocable by death or otherwise, are granted as cumulative
of the other remedies provided by law for collection of the indebtedness secured
hereby and shall not be exhausted by one exercise thereof but may be exercised
until full payment of all sums secured hereby. Upon any such sale pursuant to
the aforementioned power of sale and agency, the proceeds of said sale shall be
applied first to payment of the indebtedness secured hereby and accrued interest
and late charges thereon, then to said insurance premiums, liens, assessments,
taxes and charges including utility charges with accrued interest thereon and
then to the reasonable expenses of such sale and of all proceedings in
connection therewith, including reasonable attorney's fees, and finally, the
remainder, if any, shall be paid to the party legally entitled to same.

        In the event of any such public sale pursuant to the aforesaid power of
sale and agency, the Borrower shall be deemed a tenant holding over and shall
forthwith deliver possession of the Property to the purchaser or purchasers at
such sale or be summarily dispossessed according to provisions of law applicable
to tenants holding over.

        The failure or omission on the part of the Lender to exercise the option
for acceleration of maturity and to foreclose or exercise the power of sale in
this Security Deed following any default as aforesaid or to exercise any other
option or remedy granted hereunder to Lender when entitled to do so in any one
or more instances, or the acceptance by Lender of partial payment of the
indebtedness secured hereby, whether before or subsequent to Borrower's defaults
hereunder, shall not constitute a waiver of any such default or the right to
exercise any such option or remedy, but such option or remedy shall remain
continuously in force. Acceleration of maturity, once claimed hereunder by
Lender, at the option of Lender, may be rescinded by written acknowledgment to
that effect by Lender, but the tender and acceptance of partial payments alone
shall not in any way affect or rescind such acceleration of maturity.

            In case Lender shall have proceeded to enforce any right, power
or remedy under this Security Deed by foreclosure, entry or otherwise, or in the
event Lender commences advertising of the intended exercise of the sale under
power provided hereunder and such proceeding or advertisement shall have been
withdrawn, discontinued or abandoned for any reason, or shall have been
determined adversely to Lender, then in every such case (i) Borrower and Lender
shall be restored to their former positions and rights, (ii) all rights, powers
and remedies of Lender shall continue as if no such proceeding had been taken,
(iii) each and every Default declared or occurring prior or subsequent to such
withdrawal, discontinuance or abandonment shall be and shall be deemed to be a
continuing Default, and (iv) neither this Security Deed, nor the Note, nor any
other instrument concerned therewith, shall be or shall be deemed to have been
reinstated or otherwise affected by such withdrawal, discontinuance or
abandonment, and Borrower hereby expressly waives the benefit of any statute or
rule of law now provided, or which may hereafter be provided, which would
produce a result contrary to or in conflict with the above.

        24. PROTECTION OF LENDER'S SECURITY. At any time after default
hereunder, the Lender is authorized, without notice and in its sole discretion,
to enter upon and take possession of the Property or any part thereof and to
perform any acts which the Lender deems necessary or proper to conserve the
security herein intended to be provided by the Property, to 

                                      -14-

<PAGE>   15

operate any business or businesses conducted thereon and to collect and receive
all rents, issues and profits thereof and therefrom, including those past due as
well as those accruing thereafter.

        25. APPOINTMENT OF RECEIVER. If, at any time after a default hereunder,
in the sole discretion of the Lender, a receivership may be necessary to protect
the Property or its rents, issues, revenue, profits or proceeds, whether before
or after maturity of the indebtedness secured hereby and whether before or at
the time of or after the institution of suit to collect such indebtedness, or to
enforce this Security Deed, the Lender, as a matter of strict right and
regardless of the value of the Property or the amounts due hereunder or secured
hereby, or of the solvency of any party bound for the payment of such
indebtedness, shall have the right, upon ex parte application and without notice
to anyone, and by any court having jurisdiction, to the appointment of a
receiver to take charge of, manage, preserve, protect and operate the Property,
to collect the rents, issues, revenues, profits, proceeds and income thereof, to
make all necessary and needful repairs, and to pay all taxes, assessments and
charges against the Property and all premiums for insurance thereon, and to do
such other acts as may by such court be authorized and directed, and after
payment of the expenses of the receivership and the management of the Property,
to apply the net proceeds of such receivership in reduction of the indebtedness
secured hereby or in such other manner as the said court shall direct,
notwithstanding the fact that the amount owing thereon may not then be due and
payable or the said indebtedness is otherwise adequately secured. Such
receivership shall, at the option of Lender, continue until full payment of all
sums hereby secured or until title to the Property shall have passed by sale
under this Security Deed. Borrower hereby specifically waives its right to
object to the appointment of a receiver as aforesaid and hereby expressly agrees
that such appointment shall be made as an admitted equity and as a matter of
absolute right to the Lender.

        26. RIGHTS AND REMEDIES CUMULATIVE; FORBEARANCE NOT A WAIVER. The rights
and remedies herein provided are cumulative and Lender, as the holder of the
Note and of every other obligation secured hereby, may recover judgment thereon,
issue execution therefor and resort to every other right or remedy available at
law or in equity, without first exhausting any right or remedy available to
Lender and without affecting or impairing the security of any right or remedy
afforded hereby, and no enumeration of special rights or powers by any
provisions hereof shall be construed to limit any grant of general rights or
powers, or to take away or limit any and all rights granted to or vested in
Lender by law, and Borrower further agrees that no delay or omission on the part
of the Lender to exercise any rights or powers accruing to it hereunder shall
impair any such right or power or shall be construed to be a waiver of any such
event of default hereunder or any acquiescence therein; and every right, power
and remedy granted herein or by law to the Lender may be exercised from time to
time as often as may be deemed expedient by the Lender.

        27. MODIFICATION NOT AN IMPAIRMENT OF SECURITY. Lender, without notice
and without regard to the consideration, if any, paid therefor, and
notwithstanding the existence at the time of any inferior mortgages, deeds to
secure debt, or other liens thereon, may release any part of the security
described herein or may release any person or entity liable for any indebtedness
secured hereby without in any way affecting the priority of this Security Deed,
to the full extent of the indebtedness remaining unpaid hereunder, upon any part
of the security not expressly released. Lender may, at its option and within its
sole discretion, also agree with any party obligated on said indebtedness, or
having any interest in the security described herein, to extend the time for
payment of any part or all of the indebtedness secured hereby, and such
agreement shall not, in any way, release or impair this Security Deed, but shall
extend the same as against the title of all parties having any interest in said
security, which interest is subject to this Security Deed.

        28. PROPERTY MANAGER. The exclusive manager of the Property shall be the
Borrower or such other manager as may be first approved in writing by Lender.
The exclusive leasing agent of the Property, if other than the foregoing party,
shall be first approved in writing by the Lender. The governing management and
leasing contracts shall be subordinate to this Security Deed and satisfactory to
and subject to the written approval of Lender throughout the term of the
indebtedness secured hereby. Upon default in either of these requirements, then
the whole of the indebtedness hereby secured shall, at the election of the
Lender, become 

                                      -15-
<PAGE>   16

immediately (subject to the cure period for a Non-Monetary Default) due and
payable, together with any default premium and late payment charges required by
the Note, and the Lender shall be entitled to exercise any or all remedies
provided or referenced in this Security Deed.

        29. MODIFICATION NOT A WAIVER. In the event Lender: (a) releases, as
aforesaid any part of the security described herein or any person or entity
liable for any indebtedness secured hereby, or (b) grants an extension of time
for the payment of the Note, or (c) takes other or additional security for the
payment of the Note, or (d) waives or fails to exercise any rights granted
herein, in the Note, or any of the other Loan Documents, any said act or
omission shall not release Borrower, subsequent purchasers of the Property or
any part thereof, or makers, sureties, endorsers or guarantors of the Note, if
any, from any obligation or any covenant of this Security Deed, the Note, or any
of the other Loan Documents, nor preclude Lender from exercising any right,
power or privilege herein granted or intended to be granted in the event of any
other default then made, or any subsequent default.

        30. TRANSFER OF PROPERTY OR CONTROLLING INTEREST IN BORROWER;
ASSUMPTION. Except as hereafter provided, without the prior written consent of
the Lender, the sale, transfer, assignment, or conveyance of all or any portion
of the Property, or a transfer, assignment, or conveyance of a "controlling
interest" in Borrower whether voluntarily or by operation of law, without the
prior written consent of Lender, shall constitute a default under the terms of
this Security Deed and entitle the Lender, at its sole option, to accelerate all
sums due on the Note together with any Prepayment Premiums, late payment
charges, or any other amounts secured hereby. As used herein the term
"controlling interest" means, in the case of a partnership, greater than a 50%
interest in the partnership or votes greater than 50% of the votes required to
approve any major decisions (as opposed to day-to-day or ministerial decisions)
of the partnership, and in the case of a corporation, greater than 50% of the
outstanding voting shares of stock of the corporation. (Notwithstanding the
foregoing sentence, a transfer of partnership interests or partnership units in
the ordinary course of business of Borrower as an "up-REIT" real estate
investment trust structure shall be permitted and shall not constitute a
conveyance of a "controlling interest" in Borrower.) Lender, may, however, elect
to waive the option to accelerate granted hereunder if, prior to any such sale,
transfer, assignment or conveyance of the Property, the following conditions
shall be fully satisfied: (a) the Lender acknowledges in writing that, in its
sole discretion, the creditworthiness of the proposed transferee and the ability
and experience of the proposed transferee to operate the Property are
satisfactory to Lender, and (b) Lender and the proposed transferee shall enter
into an agreement in writing that (i) the interest payable on the indebtedness
secured hereby shall be at such rate as Lender shall determine, (ii) the
repayment schedule as set forth in the Note shall be modified by the Lender in
its sole discretion to amortize the then unpaid principal balance secured hereby
over a period determined by Lender in its sole discretion without a change in
the maturity date of the Note, (iii) an assumption fee to be determined by
Lender may be charged by the Lender in its sole discretion, and (iv) the
proposed transferee shall assume in writing all obligations of Borrower under
the Note, this Security Deed and the other Loan Documents. In the event the
ownership of the Property, or any part thereof, shall become vested in a person
or entity other than the Borrower, whether with or without the prior written
consent of the Lender, the Lender may, without notice to the Borrower, deal with
such successor or successors in interest with reference to the Property, this
Security Deed and the Note in the same manner and to the same extent as with the
Borrower without in any way vitiating or discharging the Borrower's liability
hereunder or under the Note. No sale, transfer or conveyance of the Property, no
forbearance on the part of the Lender and no extension of time for the payment
of the debt hereby secured given by the Lender shall operate to release,
discharge, modify, change or affect the original liability of the Borrower,
either in whole or in part, unless expressly set forth in writing executed by
the Lender. Notwithstanding anything contained herein to the contrary, Borrower
hereby waives any right it now has or may hereafter have to require Lender to
prove an impairment of its security as a condition to exercise the Lender's
rights under this Paragraph 30. If a transfer of the Property, or a portion
thereof, or a transfer of a "controlling interest" in Borrower is approved by
Lender: (a) Lender must receive for its review and approval copies of all
transfer documents, (b) the approved transferee must assume in writing all
obligations under the Note, this Security Deed and any other Loan Documents, and
(c) Borrower or the approved transferee must pay all costs 

                                      -16-
<PAGE>   17

and expenses in connection with such transfer and assumption, including without
limitation, all fees and expenses incurred by Lender.

        Lender acknowledges that Borrower's general partner, Roberts Realty
Investors, Inc. ("RRII"), is a real estate investment trust and that it is
contemplated that Borrower may convey its interest in the Property to RRII.
Therefore, notwithstanding anything contained in this Paragraph 30 to the
contrary, the prior written consent of the Lender shall not be required and
Lender shall not be entitled to accelerate the indebtedness evidenced by the
Note or change the Loan terms upon a transfer so long as (i) the transfer is
made to RRII; (ii) there is no change in the ownership interest of RRII except
for transfers of shares of the real estate investment trust in the ordinary
course of business; and (iii) Lender shall be given prompt notice and
documentation of such transfer, and Borrower shall pay all of Lender's
out-of-pocket expenses associated with such transfer; provided, however, that
Borrower shall notify Lender in writing of any such transfer not less than
thirty (30) days prior to the effective date of such transfer. In addition to
the foregoing, Lender shall permit one (1) bona fide, arm's length transfer of
the Property to any transferee without change in the loan terms; provided,
however, that no such transfer shall be valid or permitted hereunder unless: (i)
Lender receives prior written notice of such proposed transfer, (ii) such
proposed transferee has been approved in writing by the Lender (taking into
account such factors as transferee's creditworthiness, business experience and
managerial capabilities) such approval not to be unreasonably withheld, (iii)
Lender is paid a transfer fee in the amount of one percent (1%) of the then
outstanding principal balance of the Note, (iv) Borrower or the approved
transferee pays all fees and expenses incurred by Lender in connection with such
transfer and assumption, including, without limitation, inspection and
investigation fees and Reasonable Attorneys' Fees (as hereinafter defined), and
(v) there is no existing default hereunder or event which with the passage of
time would constitute a default hereunder. Any transfer of all or any portion of
the Property which does not strictly comply with the terms and conditions of the
foregoing shall be a default hereunder and shall entitle the Lender to exercise
all rights and remedies provided in this Security Deed.

        31. FURTHER ENCUMBRANCE PROHIBITED; SUBROGATION. So long as the Note
secured hereby remains unpaid, the Borrower shall neither voluntarily nor
involuntarily permit the Property or any part thereof to become subject to any
secondary or other junior lien, mortgage, security interest or encumbrance of
any kind whatsoever other than taxes for the current year and the Permitted
Exceptions, without the prior written consent of the Lender, and the imposition
of any such secondary lien, mortgage, security interest or encumbrance shall
constitute an event of default hereunder and entitle the Lender, at its sole
option, to declare all sums due on account of the Note to be and become
immediately due and payable. In the event that Lender shall hereafter give its
written consent to the imposition of any such secondary lien, mortgage, security
interest or other encumbrance upon the Property, the Lender, at its sole option,
shall be entitled to accelerate the maturity of the Note and exercise any and
all remedies provided and available to Lender hereunder in the event that the
holder of any such secondary lien or encumbrance shall institute foreclosure or
other proceedings to enforce the same; it being understood and agreed that a
default under any instrument or document evidencing, securing or secured by any
such secondary lien or encumbrance shall be and constitute an event of default
hereunder. In the event all or any portion of the proceeds of the loan secured
hereby are used for the purpose of retiring debt or debts secured by prior liens
on the Property, the Lender shall be subrogated to the rights and lien priority
of the holder of the lien so discharged.

        32. CONVEYANCE OF MINERAL RIGHTS PROHIBITED. Borrower agrees that the
making of any oil, gas or mineral lease or the sale or conveyance of any mineral
interest or right to explore for minerals under, through or upon the Property
would impair the value of the Property securing the Note, and that the Borrower
shall have no right, power or authority to lease the Property, or any part
thereof, for oil, gas or other mineral purposes, or to grant, assign or convey
any mineral interest of any nature, or the right to explore for oil, gas and
other minerals, without first obtaining from the Lender express written
permission therefor, which permission shall not be valid until recorded among
the Public Records of Gwinnett County, Georgia. The Borrower further agrees that
if the Borrower shall make, execute or enter into any such lease or attempt to
grant any such mineral rights without such prior written permission of the
Lender, then the Lender shall have the option, without notice, to declare the
same to be a default 

                                      -17-
<PAGE>   18

hereunder and to declare the indebtedness hereby secured immediately due and
payable. Whether or not the Lender shall consent to such lease or grant of
mineral rights, the Lender shall receive the entire consideration to be paid for
such lease or grant of mineral rights, with the same to be applied to the
indebtedness hereby secured notwithstanding the fact that the amount owing
thereon may not then be due and payable or the said indebtedness is otherwise
adequately secured; provided, however, that the acceptance of such consideration
shall in no way impair the lien of this Security Deed on the Property.

        33. ESTOPPEL CERTIFICATION BY BORROWER. Borrower, upon request therefor
made either personally or by mail, shall certify in writing to Lender (or any
party designated by Lender) in form satisfactory to Lender the amount of
principal and interest then outstanding under the terms of the Note and any
other sums due and owing under this Security Deed or any of the other Loan
Documents and whether any offsets or defenses exist against the mortgage debt.
Such certification shall be made by Borrower within ten (10) days if the request
is made personally, or within twenty (20) days if the request is made by mail.

        34. CROSS-DEFAULT. The Note is also secured by the terms, conditions and
provisions of an Assignment of Leases, Rents and Profits (hereinafter referred
to as the "Assignment") recorded among the Public Records of Gwinnett County,
Georgia and, additionally, may be secured by contracts or agreements of guaranty
or other security instruments. The terms, conditions and provisions of each
security instrument shall be considered a part hereof as fully as if set forth
herein verbatim. Any default under this Security Deed or the Note secured hereby
shall constitute an event of default under the Assignment or any of the other
Loan Documents, and any default under the Assignment or other Loan Documents
shall likewise constitute a default hereunder and under the Note.
Notwithstanding the foregoing, the enforcement or attempted enforcement of this
Security Deed or any of the other Loan Documents now or hereafter held by Lender
shall not prejudice or in any manner affect the right of Lender to enforce any
other Loan Document; it being understood and agreed that the Lender shall be
entitled to enforce this Security Deed and any of the other Loan Documents now
or hereafter held by it in such order and manner as Lender, in its sole
discretion, shall determine.

        35. EXAMINATION OF BORROWER'S RECORDS. Borrower will maintain complete
and accurate books and records showing in detail the income and expenses of the
Property, and will permit upon no less than two (2) days notice the Lender and
its representatives to examine said books and records and all supporting
vouchers and data during normal business hours and from time to time upon
request by the Lender, in such place as such books and records are customarily
kept, and will furnish to the Lender, within one hundred twenty (120) days after
the close of each calendar year, audited financial statements of each general
partner of Borrower and statements of operations of the Property certified by
the general partner of the Borrower to be true and correct and showing in detail
all income derived from and expenses incurred in connection with the ownership
of the Property. All such statements shall be in form acceptable to Lender and
shall be prepared in accordance with generally accepted accounting principles
and shall include an annual rent schedule. In the event the Borrower fails to
provide such statements to the Lender within the time prescribed above, the
Borrower shall pay the Lender the sum of TWO HUNDRED AND NO/100 DOLLARS
($200.00) for each successive month for which statements are delinquent. In the
event of default hereunder, Lender shall have the right to require that said
financial statements of the Property be audited and certified by a certified
public accountant acceptable to the Lender, all at the sole cost and expense of
the Borrower.

        36.     ALTERATION, REMOVAL AND CHANGE IN USE OF PROPERTY PROHIBITED.  
Borrower covenants and agrees to permit or suffer none of the following
without the prior written consent of the Lender:

                (a) Any structural alteration of, or addition to, the
        Improvements now or hereafter situated upon the Real Property or the
        addition of any new buildings or other structure(s) thereto other than
        erection or removal of non-load bearing interior walls; or

                (b) The removal, transfer, sale or lease of the Property, except
        that the renewal, replacement or substitution of fixtures, equipment,
        machinery, apparatus and articles of 

                                      -18-
<PAGE>   19

        personal property (replacement or substituted items must be of like or 
        better quality than the removed items in their original condition) 
        encumbered hereby may be made in the normal course of business; or

                (c) The use of any of the Improvements now or hereafter situated
        on the Real Property for any purpose other than as an apartment complex
        project and related facilities.

        37. FUTURE ADVANCES SECURED. This Security Deed shall secure not only
existing indebtedness, but also such future advances, whether such advances are
obligatory or to be made at the option of the Lender. Upon request of Borrower,
and at Lender's option prior to release of this Security Deed, Lender may make
future advances to Borrower. All future advances with interest thereon shall be
secured by this Security Deed to the same extent as if such future advances were
made on the date of the execution of this Security Deed unless the parties shall
agree otherwise in writing, but the total secured indebtedness shall not exceed
at any one time a maximum principal amount equal to double the face amount of
the Note plus interest, and costs of collection including court costs and
Reasonable Attorneys' Fees. Any advances or disbursements made for the benefit
or protection of or the payment of taxes, assessments, levies or insurance upon
the Property, with interest on such disbursements as provided herein, shall be
added to the principal balance of the Note and collected as a part thereof. To
the extent that this Security Deed may secure more than one note, a default in
the payment of any note shall constitute a default in the payment of all such
notes.

        38. EFFECT OF SECURITY AGREEMENT. Borrower does hereby grant and this
Security Deed is and shall be deemed to create, grant, give and convey a
mortgage of, a lien and encumbrance upon, and a present security interest in
both real and personal property, including all improvements, goods, chattels,
furniture, furnishings, fixtures, equipment, apparatus, appliances and other
items of tangible or intangible personal property, hereinabove particularly or
generally described and conveyed, whether now or hereafter affixed to, located
upon, necessary for or used or useful, either directly or indirectly, in
connection with the operation of the Property as an apartment complex project,
and this Security Deed shall also serve as a "security agreement" within the
meaning of that term as used in the Uniform Commercial Code as adopted and in
force from time to time in the State of Georgia, and shall be operative and
effective as a security agreement in addition to, and not in substitution for,
any other security agreement executed by the Borrower in connection with the
extension of credit or loan transaction secured hereby. Upon the occurrence of a
default hereunder or Borrower's breach of any other covenants or agreements
between the parties entered into in conjunction herewith, Lender shall have the
remedies (i) as prescribed herein, or (ii) as prescribed by general law, or
(iii) as prescribed by the specific statutory consequences now or hereafter
enacted and specified in said Uniform Commercial Code, all at Lender's sole
election. Borrower and Lender agree that the filing of any such financing
statement or statements in the records normally having to do with personal
property shall not in any way affect the agreement of Borrower and Lender that
everything used in connection with the production of income from the Property or
adapted for use therein or which is described or reflected in this Security
Deed, is, and at all times and for all purposes and in all proceedings, both
legal or equitable, shall be, regarded as part of the real estate conveyed
hereby regardless of whether (i) any such item is physically attached to the
improvements, (ii) serial numbers are used for the better identification of
certain items capable of being thus identified in an exhibit to this Security
Deed or elsewhere, or (iii) any such item is referred to or reflected in any
such financing statement or statements so filed at any time. Similarly, the
mention in any such financing statement or statements of the rights in and to
(i) the proceeds of any fire and hazard insurance policy, or (ii) any award in
eminent domain proceedings for a taking or for loss of value, or (iii)
Borrower's interest as lessor or landlord in any present or future lease or
rights to income growing out of the use and occupancy of the Property, whether
pursuant to lease or otherwise, shall not in any way alter any of the rights of
Lender as determined by this Security Deed or affect the priority of Lender's
security interest granted hereby or by any other recorded document, it being
understood and agreed that such mention in such financing statement or
statements is solely for the protection of Lender in the event any court shall
at any time hold, with respect to the foregoing clauses (i), (ii) or (iii) of
this sentence, that notice of Lender's priority of interest, to be effective
against a particular class of persons, must be filed in the Uniform Commercial
Code records. Borrower warrants that 

                                      -20-

<PAGE>   20

(i) Borrower's (that is, "Debtor's") name, identity and residence or principal
place of business are as set forth in Exhibit C attached hereto and made a part
hereof; (ii) Borrower (that is, "Debtor") has been using or operating under said
name and identity without change for the time period set forth in Exhibit C; and
(iii) the location of the collateral is upon the Property. Borrower covenants
and agrees that Borrower will furnish Lender with notice of any change in the
matters addressed by clauses (i) or (iii) of this paragraph within thirty (30)
days of the effective date of any such change and Borrower will promptly execute
any financing statements or other instruments deemed necessary by Lender to
prevent any filed financing statement from becoming misleading or losing its
perfected status. If Borrower fails to promptly execute any such financing
statements or other instruments, Lender may make, execute, record, file,
re-record, and re-file any and all such financing statements or other
instruments for and in the name of Borrower, and Borrower hereby irrevocably
appoints Lender the agent and attorney-in-fact of Borrower so to do. This
appointment of Lender as Borrower's attorney-in-fact is coupled with an interest
and is irrevocable by death or otherwise. The information contained in this
paragraph is provided in order that this Security Deed shall comply with the
requirements of the Uniform Commercial Code, as enacted in the State of Georgia,
for instruments to be filed as financing statements. The names of the "Debtor"
and the "Secured Party," the identity and residence or principal place of
business of "Debtor," the time period for which "Debtor" has been using or
operating under said name and identity without change are as set forth in
Schedule 1 of Exhibit C; the mailing address of the "Secured Party" from which
information concerning the security interest may be obtained, and the mailing
address of "Debtor," are as set forth in Schedule 2 of said Exhibit C; and a
statement indicating the types, or describing the items, of collateral is set
forth hereinabove.

        The Borrower agrees to and shall, upon the request of Lender, execute
and deliver to Lender, in form and content satisfactory to Lender, such
financing statements, descriptions of property and such further assurances as
Lender, in its sole discretion, may from time to time consider necessary to
create, perfect, continue and preserve the lien and encumbrances hereof and the
security interest granted herein upon and in such real and personal property and
fixtures described herein, including all buildings, improvements, goods,
chattels, furniture, furnishings, fixtures, equipment, apparatus, appliances and
other items of tangible and intangible personal property herein specifically or
generally described and intended to be the subject of the security interest,
lien and encumbrance hereby created, granted and conveyed. Without the prior
written consent of Lender, Borrower shall not create or suffer to be created,
pursuant to the Uniform Commercial Code, any other security interest in such
real and personal property and fixtures described herein. The Lender, at the
expense of the Borrower, may or shall cause such statements, descriptions and
assurances, as herein provided in this Paragraph 38, and this Security Deed to
be recorded and re-recorded, filed and refiled, at such times and in such places
as may be required or permitted by law to so create, perfect and preserve the
lien and encumbrance hereof upon all of the Property.

        39. TERMS OF CONTRACT SURVIVE CLOSING. The terms and provisions of the
application/contract between Lender and Borrower are incorporated herein by
reference, said application/contract being dated January 23, 1996, and any
subsequent amendment thereto (hereinafter referred to as the "Contract"). All
terms and conditions of the Contract not expressly set forth in this Security
Deed, the Note and any other Loan Documents shall survive the closing hereof and
remain in full force and effect. In the event any conflict exists between the
terms, conditions and provisions of the Contract and the Loan Documents, the
terms, conditions and provisions of the Loan Documents shall prevail.

        40. SUCCESSORS AND ASSIGNS; TERMINOLOGY. The provisions hereof shall be
binding upon the Borrower and the successors and assigns of the Borrower, and
inure to the benefit of Lender and its successors and assigns. Where more than
one Borrower is named herein, the obligations and liabilities of said Borrower
shall be joint and several. Wherever used in this Security Deed, unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided herein, the word "Borrower" shall mean Borrower and/or any subsequent
owner or owners of the Property, the word "Lender" shall mean Lender or any
subsequent holder or holders of this Security Deed, the word "Note" shall mean
Note(s) secured by this Security 

                                      -20-
<PAGE>   21


Deed, and the word "person" shall mean an individual, trustee, trust,
corporation, partnership or unincorporated association.

        41. NOTICES. All notices hereunder shall be deemed to have been duly
given if mailed by United States registered or certified mail, with return
receipt requested, postage prepaid, or if deposited with a nationally recognized
overnight courier such as Federal Express, to the parties at the following
addresses (or at such other addresses as shall be given in writing by any party
to the others), and shall be deemed complete upon receipt (which, in the case of
delivery by certified mail, shall be as evidenced by the return receipt, and, in
the case of delivery by a nationally recognized overnight courier, shall be as
evidenced by the confirmation of delivery received by the courier) or refusal to
accept receipt:

                         To Borrower:      Roberts Properties Residential, L.P.
                                           8010 Roswell Road
                                           Suite 120
                                           Atlanta, Georgia 30350
                                           Attn: Charles S. Roberts

                         To Lender:        Nationwide Life & Annuity Insurance
                         Company

                                           c/o Nationwide Life Insurance Company
                                           One Nationwide Plaza
                                           Columbus, Ohio  43215-2220
                                           Attn: Real Estate Investments

                                           Nationwide Life Insurance Company
                                           One Nationwide Plaza
                                           Columbus, Ohio 43215-2220
                                           Attn: Real Estate Investments


        42.     GOVERNING LAW.  This Security Deed is to be governed by and 
construed in accordance with the laws of the State of Georgia, and, if
controlling, by the laws of the United States.

        43. RIGHTS OF LENDER CUMULATIVE. The rights of the Lender arising under
the clauses and covenants contained in this Security Deed shall be separate,
distinct and cumulative and none of them shall be in exclusion of the others;
and no act of the Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provisions, anything herein
or otherwise to the contrary notwithstanding.

        44.     MODIFICATIONS.  This Security Deed cannot be changed, altered, 
amended or modified except by an agreement in writing and in recordable form,
executed by both Borrower and Lender.

        45. EXCULPATION. Subject to the last sentence of this Paragraph 45, the
liability of Borrower with respect to the payment of principal and interest
under the Note shall be "non-recourse" and, accordingly, Lender's source of
satisfaction of said indebtedness and Borrower's other obligations hereunder and
under the other Loan Documents shall be limited to the Property and Lender's
receipt of the rents, issues and profits from the Property and Lender shall not
seek to procure payment out of any other assets of Borrower or any person or
entity comprising Borrower, or to seek any judgment (except as hereinafter
provided) for any sums which are or may be payable under the Note, this Security
Deed or any of the other Loan Documents, or for any claim or judgment (except as
hereafter provided) for any deficiency remaining after foreclosure of this
Security Deed. Notwithstanding the above, nothing herein contained shall be
deemed to be a release or impairment of the Note or the security therefor
intended by this Security Deed and the other Loan Documents, or be deemed to
preclude Lender from exercising its rights to foreclose this Security Deed or to
enforce any of its other rights or remedies under the Loan Documents.


                                      -21-
<PAGE>   22

        Notwithstanding the foregoing, it is expressly understood and agreed
that the aforesaid limitation on liability shall in no way affect or apply to
the Borrower's continued personal liability for:

        (1)     fraud or intentional misrepresentation made in or in connection
                with the Note or any of the other Loan Documents governing, 
                securing or pertaining to the payment thereof;

        (2)     failure to pay taxes prior to delinquency or to pay assessments 
                prior to delinquency, or to pay charges for labor, materials or
                other charges which can create liens on any portion of the 
                Property;

        (3)     the misapplication of (i) proceeds of insurance covering any
                portion of the Property, or (ii) proceeds of the sale or
                condemnation of any portion of the Property, or (iii) rentals
                received by or on behalf of Borrower subsequent to the date on
                which Lender gives written notice of the commencement of
                foreclosure proceedings;

        (4)     causing or permitting waste to occur on, in or about the 
                Property, and failure to maintain the Property, excepting 
                ordinary wear and tear;

        (5)     loss by fire or casualty to the extent not compensated by 
                insurance proceeds collected by Lender;

        (6)     the return to Lender of all unearned advance rentals and 
                security deposits paid by tenants of the Property and not 
                refunded to or forfeited by such tenants;

        (7)     the return to Borrower of any and all fees paid to Borrower by
                tenants of the Property which fees permit tenants to terminate
                their leases;

        (8)     the return of, or reimbursement for, all personalty owned by
                Borrower taken from the Property by or on behalf of Borrower,
                out of the ordinary course of business, and not replaced by
                items of equal or greater value than the original value of the
                personalty so removed;

        (9)     all court costs and Reasonable Attorneys' Fees actually 
                incurred which are provided for in the Note or in any other 
                Loan Document governing, securing or pertaining to the payment
                of the Note; and

        (10)    (i) the removal of any chemical, material or substance, exposure
                to which is prohibited, limited or regulated by any Federal,
                State, County, Regional or Local Authority which may or could
                pose a hazard to the health and safety of the occupants of the
                Property, regardless of the source of origination; and (ii) the
                restoration of the Property to comply with all governmental
                regulations pertaining to hazardous waste found in, on or under
                the Property, regardless of the source of origination; and (iii)
                any indemnity or other agreement to hold the Lender harmless
                from and against any and all losses, liabilities, damages,
                injuries, costs, expenses of any and every kind arising under
                Paragraph 3 of this Security Deed or under the Environmental
                Indemnity Agreement. Borrower shall not be liable for removal of
                any of the foregoing materials from the Property if such
                materials were placed on the Property subsequent to the date of
                foreclosure of this Security Deed or acceptance of a deed in
                lieu thereof, or relinquishment of control of the Property
                pursuant to a transfer approved in writing by Lender; provided,
                that such transferee assumes in writing all obligations of
                Borrower pertaining to Hazardous Materials pursuant to the Loan
                Documents. Liability under this subparagraph shall extend beyond
                repayment of the Note and compliance with the terms of this
                Security Deed unless at such time Borrower provides Lender an
                environmental assessment report acceptable to Lender showing the
                Property to be free of Hazardous Materials and 

                                      -22-
<PAGE>   23

                not in violation of Hazardous Waste Laws. Borrower shall bear 
                the burden of proof in establishing the date on which any such
                Hazardous Materials were placed on the Property.

        (11)    (a) any and all costs incurred in order to cause the Property to
                comply with the applicable accessibility provisions of The Fair
                Housing Act of 1988, as the same may now or hereafter be
                amended, and The Americans With Disabilities Act of 1990, as the
                same may now or hereafter be amended, and any and all rules and
                regulations that may now or hereafter be promulgated in
                connection with said acts, and (b) any indemnity or other
                agreement to hold the Lender harmless from and against any and
                all losses, liabilities, damages, injuries, costs and expenses
                of any and every kind arising under Paragraph 3 of this Security
                Deed regarding accessibility for the disabled or handicapped or
                under the Accessibility Indemnity Agreement from Borrower to
                Lender of even date herewith; provided, however, Borrower shall
                not be liable for compliance with any accessibility laws that
                first become effective, or for any violation of any
                accessibility laws resulting from alterations or improvements to
                the Property that are performed, subsequent to Lender's actually
                taking possession of the Property pursuant to foreclosure of
                this Security Deed or acceptance of a deed in lieu thereof, or
                subsequent to any transfer of ownership of the Property that has
                the prior written approval of Lender; provided that such
                transferee assumes in writing all obligations of Borrower with
                respect to compliance with accessibility laws under this
                Security Deed and the Accessibility Indemnity Agreement.

        (12)    Obligation of Borrower for the face amount of any Letter of
                Credit held by Lender and delivered by Borrower in connection
                with the loan evidenced by the Notes in the event Lender is
                unable to collect the full amount of said Letter of Credit for
                any reason.

        The obligations of Borrower in subparagraphs 1-12 above, except as
        provided in subparagraphs 10 and 11, shall survive the repayment and
        satisfaction of the Note and compliance with the terms of this Security
        Deed.

        Notwithstanding any provisions herein to the contrary, Borrower shall
become personally liable for the entire amount due under the Note (including all
principal, interest and other charges) in the event that Borrower (i) violates
the covenants set forth in this Security Deed governing the placing of
subordinate financing on the Property or (ii) violates the covenants set forth
in this Security Deed restricting transfers in the Property or transfers of
ownership interests in Borrower.

        46.     CAPTIONS.  The captions set forth at the beginning of the 
various paragraphs of this Security Deed are for convenience only and shall 
not be used to interpret or construe the provisions of this Security Deed.

        47. REASONABLE ATTORNEYS' FEES. As used herein, the phrase "Reasonable
Attorney's Fees" shall mean fees charged by attorneys selected by Lender based
upon such attorney's then prevailing hourly rates, as opposed to any amount or
percentage specified by any statute then in effect in the State of Georgia.

        IN WITNESS WHEREOF, the said Borrower has caused these presents to be
executed under seal by persons duly authorized thereunto as of the day and year
first above written.


Signed, sealed and delivered in the  ROBERTS PROPERTIES 
presence of:                         RESIDENTIAL, L.P., a Georgia 
                                     limited partnership


/s/ Charles R. Elliott               By: Roberts Realty Investors, Inc., its
----------------------                   sole General Partner 
Unofficial Witness  

                                      -23-

<PAGE>   24


/s/ Leslie A. Camp                           
------------------
Notary Public                                By: /s/ Charles S. Roberts
                                                ------------------------
                                                Name: Charles S. Roberts
                                                Title: President
       (NOTARY SEAL)
                                                
My Commission Expires:                          (Corporate Seal)



                                      -24-


<PAGE>   25

                                    EXHIBIT A


FEE PARCEL

All that tract of land in Land Lots 321 and 326 of the 6th District, City of
Duluth, Gwinnett County, Georgia described as follows:

BEGINNING at a 1/2-inch reinforcing rod found on the northeast right-of-way line
of Pleasant Hill Road (variable right-of-way), said 1/2-inch reinforcing rod
found being 1924.03 feet northwest along the northeast right-of-way line of
Pleasant Hill Road from the mitered intersection of the west right-of-way line
of Peachtree Industrial Boulevard (150 foot right-of-way) and the northeast
right-of-way line of Pleasant Hill Road (said 1/2-inch reinforcing rod found
also being 1973.90 feet northwest along the northeast right-of-way line of
Pleasant Hill Road from the intersection of the northeast right-of-way line of
Pleasant Hill Road and the west right-of-way line of Peachtree Industrial
Boulevard; said 1/2-inch reinforcing rod found also being the southwest corner
of property now or formerly known as Phase One, Plantation Trace Apartments as
per Deed Book 5215, page 151, Gwinnett County, Georgia records); running thence
along the said northeast right-of-way line of Pleasant Hill Road the following
courses and distances: (1) along the arc of a curve to the left (which arc is
subtended by a chord having a bearing and distance of North 61 degrees 48
minutes 40 seconds West 242.78 feet and a radius of 1548.326 feet) 243.03 feet
to a point, and (2) North 66 degrees 47 minutes 46 seconds West 81.46 feet to a
1/2-inch reinforcing rod found; thence, leaving said right-of-way line, North 23
degrees 09 minutes 50 seconds East 205.89 feet to a 1/2-inch reinforcing rod
found; thence North 39 degrees 12 minutes 37 seconds West 76.90 feet to a
1/2-inch reinforcing rod found; thence South 77 degrees 41 minutes 15 seconds
West 89.99 feet to a point; thence South 60 degrees 09 minutes 27 seconds West
45.03 feet to a 1/2-inch reinforcing rod found; thence South 38 degrees 09
minutes 50 seconds West 84.98 feet to a 1/2-inch reinforcing rod found; thence
South 23 degrees 17 minutes 54 seconds West 44.00 feet to a 1/2-inch reinforcing
rod found; thence South 66 degrees 49 minutes 53 seconds East 22.00 feet to a
point; thence South 23 degrees 10 minutes 07 seconds West 27.00 feet to a
1/2-inch reinforcing rod found on the northeast right-of-way line of Pleasant
Hill Road; thence along said right-of-way line the following courses and
distances: (1) North 66 degrees 46 minutes 36 seconds West 248.23 feet to a
point, and (2) North 71 degrees 12 minutes 08 seconds West 314.65 feet to a
point on the top bank of the Chattahoochee River; thence leaving said
right-of-way and running along the top bank of the Chattahoochee River the
following courses and distances: (1) North 17 degrees 49 minutes 59 seconds East
17.09 feet to a point, (2) North 15 degrees 49 minutes 59 seconds East 125.63
feet to a point, (3) North 13 degrees 18 minutes 00 seconds East 151.29 feet to
a point, (4) North 16 degrees 41 minutes 32 seconds East 126.35 feet to a point,
(5) North 19 degrees 38 minutes 59 seconds East 179.27 feet to a point, (6)
North 14 degrees 04 minutes 09 seconds East 135.20 feet to a point, (7) North 07
degrees 56 minutes 24 seconds East 133.23 feet to a point, and (8) North 07
degrees 57 minutes 06 seconds East 173.55 feet to a point; thence, leaving said
top bank of the Chattahoochee River, South 87 degrees 59 minutes 08 seconds East
902.71 feet to 1/2-inch reinforcing rod found; thence South 62 degrees 13
minutes 06 seconds East 244.24 feet to a 1/2-inch reinforcing rod found; thence
South 18 degrees 33 minutes 59 seconds East 189.71 feet to a point; thence South
22 degrees 29 minutes 29 seconds West 137.19 feet to a point; thence South 00
degrees 13 minutes 30 seconds West 129.61 feet to a point; thence South 18
degrees 34 minutes 13 seconds West 348.80 feet to a point; thence South 32
degrees 26 minutes 03 seconds West 216.62 feet to a point; thence South 28
degrees 09 minutes 32 seconds West 370.40 feet to the POINT OF BEGINNING; said
tract containing approximately 31.60012 acres and being shown on that certain
plat of ALTA/ACSM Land Title Survey for Roberts Properties Residential, L.P.,
Nationwide Life Insurance Company, Nationwide Life & Annuity Insurance Company
and Commonwealth Land Title Insurance Company prepared by Watts & Browning -
Engineers, bearing the seal and certification of V.T. Hammond, Georgia
Registered Professional Land Surveyor No. 2554, dated September 9, 1996, last
revised October 14, 1996.

                                      -25-

<PAGE>   26

EASEMENT NO. 1

TOGETHER WITH a non-exclusive right, title and interest in and to the easements
appurtenant to the above described fee tract created by and described in that
certain Reciprocal Easement and Covenant Agreement between Partridge Greene,
Inc. and Roberts Properties River Oaks, L.P., a Georgia limited partnership,
dated August 21, 1991, recorded in Deed Book 6714, page 142, Gwinnett County,
Georgia records, as amended by First Amendment to Reciprocal Easement and
Covenant Agreement between Roberts Properties River Oaks, L.P. and Roberts
Properties, Inc., dated August 15, 1994, filed for record August 17, 1994, and
recorded in Deed Book 10601, page 180, aforesaid records, over, across and
through that certain 0.86088 acre parcel shown on the above described plat of
ALTA/ACSM Land Title Survey for Roberts Properties Residential, L.P., Nationwide
Life Insurance Company, Nationwide Life & Annuity Insurance Company and
Commonwealth Land Title Insurance Company.

EASEMENT NO. 2

TOGETHER WITH a non-exclusive right, title and interest in and to the easement
appurtenant to the above-described fee tract created by and described in that
certain Reciprocal Drainage Easement Agreement dated November 21, 1988, between
David Berkman and Gerald A. Blonder and Partridge Greene, Inc., recorded in Deed
Book 5215, page 141, aforesaid records.


                                      -26-

<PAGE>   27


                                    EXHIBIT B


    1.   General and special taxes and assessments for the year 1996 and
         subsequent years, not yet due and payable.

    2.   Easement from Mrs. C.W.  Summerour to Georgia Power Company,  dated 
         September 9, 1940, filed for record September 19, 1940, and recorded 
         in Deed Book 69, page 125, Gwinnett County, Georgia records.

    3.   Easement from Mrs. C.W. Summerour to Georgia Power Company, dated 
         October 28, 1948, filed for record November 3, 1948, and recorded in 
         Deed Book 90, page 249, aforesaid records.

    4.   Easement from Miss Nelle Summerour to Georgia Power Company, dated
         March 16, 1956, filed for record March 24, 1956, and recorded in Deed
         Book 128, page 165, aforesaid records.

    5.   Easement from John H. Summerour to Georgia Power Company, dated July
         16, 1958, filed for record July 18, 1958, and recorded in Deed Book
         142, page 443, aforesaid records.

    6.   Easement for Right-of-Way from Partridge-Greene, Inc. to Georgia Power
         Company, dated March 1, 1984, filed for record March 29, 1984, and
         recorded in Deed Book 2750, page 275, aforesaid records.

    7.   Easement from Partridge-Greene, Inc. to S. Donald Norton Properties,
         Inc., dated June 12, 1984, filed for record June 18, 1984, and recorded
         in Deed Book 2809, page 434, aforesaid records; as assigned by Easement
         from S. Donald Norton Properties, Inc. to Gwinnett County, dated
         November 4, 1985, filed for record November 7, 1985, and recorded in
         Deed Book 3230, page 53, aforesaid records.

    8.   Sewer easements dedicated pursuant to plats recorded in Plat Book 37,
         page 164, aforesaid records, and Plat Book 40, page 4, aforesaid 
         records.

    9.   Easement from The Village Group, Inc. to Gwinnett County, dated
         January 23, 1987, filed for record February 17, 1987, and recorded in
         Deed Book 4115, page 220, aforesaid records.

    10.  The following matters disclosed by plat of ALTA/ACSM Land Title Survey
         for Roberts Properties Residential, L.P., Nationwide Life Insurance
         Company, Nationwide Life & Annuity Insurance Company & Commonwealth
         Land Title Insurance Company prepared by Watts & Browning Engineers,
         Inc., dated September 9, 1996, last revised October 14, 1996, bearing
         the seal and certification of V.T. Hammond, Georgia Registered
         Professional Land Surveyor No. 2554:

         a)    20-foot sanitary sewer easement crossing the southern portion of
               the subject property;
         b)    20-foot sanitary sewer easement crossing the western portion of
               the subject property;
         c)    20-foot sanitary sewer easements crossing the central and
               northern portions of the subject property;
         d)    Easement for construction and maintenance of drainage located
               along the southern boundary line of the subject property along
               Pleasant Hill Road;
         e)    Light poles, power poles, power meters, power boxes and guy wires
               located throughout the subject property;
         f)    50-foot Georgia Power Company easement located in the southern
               portion of the subject property along Pleasant Hill Road;


                                      -27-
<PAGE>   28

         g)    500-foot Atlanta Regional Commission setback line in the western
               portion of the subject property;
         h)    20 x 20 foot sign tract located on subject property along
               Pleasant Hill Road;
         i)    Ingress and egress easement located in the southern portion of
               subject property;
         j)    Water vault located in the southern portion of the subject
               property along Pleasant Hill Road;
         k)    Portion of 10-foot drainage easement located along the eastern
               boundary line of the subject property;
         l)    Water valves, water meters and fire hydrants located throughout
               the subject property;
         m)    BellSouth telephone facilities located throughout the subject
               property; 
         n)    Cable T.V. facilities located throughout the subject property;
         o)    Cleanouts located throughout the subject property;
         p)    Gas meters located throughout the subject property; and
         q)    Fence encroaches from the subject property over the western
               boundary line thereof onto adjacent property.

    11.  Rights of upper and lower riparian owners in and to the waters of the
         Chattahoochee River and creeks or branches flowing thereto, and the
         natural flow thereof, free from diminution or pollution (affects only
         the Fee Parcel).

    12.  Restrictions contained in General Warranty Deed from Partridge Greene,
         Inc. to Roberts Properties River Oaks, L.P., a Georgia limited
         partnership, dated August 21, 1991, filed for record August 26, 1991,
         and recorded in Deed Book 6714, page 134, aforesaid records; as
         supplemented by Notice of Approval executed by Partridge Greene, Inc.,
         dated October 29, 1991, filed for record November 8, 1991, and recorded
         in Deed Book 6867, page 94, aforesaid records (affects only the Fee
         Parcel).

    13.  Permanent Drainage Easement from Partridge-Greene, Inc. to Gwinnett
         County, dated July 13, 1990, filed for record October 19, 1990, and
         recorded in Deed Book 6249, page 253, aforesaid records (affects only
         the Fee Parcel and Easement No. 1).

    14.  Reciprocal Easement and Covenant Agreement between Partridge Greene,
         Inc. and Roberts Properties River Oaks, L.P., a Georgia limited
         partnership, dated August 21, 1991, filed for record August 26, 1991,
         and recorded in Deed Book 6714, page 142, aforesaid records; as amended
         by First Amendment to Reciprocal Easement and Covenant Agreement
         between Roberts Properties River Oaks, L.P., a Georgia limited
         partnership, and Roberts Properties, Inc., dated August 15, 1994, filed
         for record August 17, 1994, and recorded in Deed Book 10601, page 180,
         aforesaid records (affects only the Fee Parcel and Easement No. 1).

    15.  Reciprocal Drainage Easement Agreement among David Berkman, Gerald A.
         Blonder and Partridge Greene, Inc., dated November 21, 1988, filed for
         record November 28, 1988, and recorded in Deed Book 5215, page 141,
         aforesaid records (affects only the Fee Parcel and Easement No. 2).

    16.  Easement from David Berkman and Gerald A. Blonder to Gwinnett County,
         dated October 16, 1986, filed for record April 13, 1987, and recorded
         in Deed Book 4226, page 296, aforesaid records (affects only Easement
         No. 2).

    17.  Agreement for Grant of Easement and Cable Television Service between
         Cable Equities of Colorado, Ltd. d/b/a N.E. Gwinnett Cablevision, and
         Roberts Properties River Oaks, L.P., a Georgia limited partnership,
         dated June 16, 1992, filed for record July 1, 1992, and recorded in
         Deed Book 7587, page 173, aforesaid records.

    18.  Rights of tenants in possession of individual apartment units, as
         tenants only.


                                      -28-

<PAGE>   29

                                    EXHIBIT C


                                   Schedule 1
                  (Description of "Debtor" and "Secured Party")

A.      Debtor:

        1.      Name and Identity or Corporate Structure: Roberts Properties 
                Residential, L.P., a Georgia limited partnership.

        2.      The principal place of business of Debtor in the State of 
                Georgia is located at 8010 Roswell Road, Suite 120, Atlanta, 
                Georgia 30350.

        3.      Debtor has been using or operating without change under the 
                name and identity indicated in item 1 above for the following 
                time period: Since July 22, 1994.

B.      Secured Party:

        Nationwide Life Insurance Company
        Nationwide Life & Annuity Life Insurance Company


                                   Schedule 2
            (Notice Mailing Address of "Debtor" and "Secured Party")

A.      The mailing address of Debtor is:

        Roberts Properties Residential, L.P.
        8010 Roswell Road
        Suite 120
        Atlanta, Georgia 30350

B.      The mailing address of Secured Party is:

        Nationwide Life & Annuity Insurance Company
        c/o Nationwide Life Insurance Company
        One Nationwide Plaza
        Columbus, Ohio 43215-2220
        Attn: Real Estate Investments

        Nationwide Life Insurance Company
        One Nationwide Plaza
        Columbus, Ohio 43215-2220
        Attn: Real Estate Investments


                                      -29-
<PAGE>   30


     
Return to:
Charles A. Brake, Jr., Esq.
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424

                    ASSIGNMENT OF LEASES, RENTS, AND PROFITS


        THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (hereinafter referred to as
"Assignment") is executed and delivered this 17th day of October, 1996, by
Roberts Properties Residential, L.P., a Georgia limited partnership (hereinafter
referred to as "Assignor"), to and in favor of NATIONWIDE LIFE INSURANCE
COMPANY, an Ohio corporation, its successors or assigns, having its principal
office at One Nationwide Plaza, Columbus, Ohio 43215-2220 Attention: Real Estate
Investments and NATIONWIDE LIFE & ANNUITY INSURANCE COMPANY, an Ohio corporation
whose address is c/o Nationwide Life Insurance Company, One Nationwide Plaza,
Columbus, Ohio 43215-2220, Attention: Real Estate Investments,(hereinafter
collectively referred to as the "Assignee");

                              W I T N E S S E T H:

        WHEREAS, Assignor is the present owner in fee simple of certain real
property located in Gwinnett County, Georgia more particularly described on
Exhibit "A" attached hereto and by this reference made a part hereof
(hereinafter referred to as the "Real Property"); and

        WHEREAS, Assignee is the owner and holder of a Deed to Secure Debt and
Security Agreement of even date herewith (hereinafter referred to as the
"Security Deed") encumbering the Real Property and other Property more
specifically described in the Security Deed (all of which property is referred
to herein and in the Security Deed as the "Property"), which Deed secures the
payment of a Real Estate Note A and Real Estate Note B of even date herewith in
the aggregate amount of NINE MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($9,250,000.00) made by Assignor as Maker to and in favor of Assignee as
Holder (hereinafter collectively referred to as the "Note");

        WHEREAS, Assignee, as a condition to making the aforesaid loan and to
obtain additional security therefor, has required the execution of this
Assignment by Assignor; and

        NOW THEREFORE, in order further to secure the payment of the
indebtedness of Assignor to Assignee evidenced by the Note, and secured by the
Security Deed, and in further consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) in hand paid by Assignee to Assignor, the receipt and sufficiency of
which are hereby acknowledged, Assignor does hereby sell, assign, transfer and
set over unto Assignee all of the leases (and guarantees thereof), rents,
issues, profits and income of, from or pertaining to the Property, including,
but not limited to any fees that permit the tenant to terminate its lease which
fees are payable to the landlord under the terms and conditions of any of the
Property's leases. This Assignment shall include any and all leases or rental
agreements and guarantees thereof that may now be in effect specifically
including without limitation those leases and guarantees set forth in Exhibit B
attached hereto and by this reference made a part hereof, as well as any future
or additional leases or rental agreements and guarantees thereof, and any
renewals or extensions of the same, that may be entered into by Assignor.
Assignor hereby agrees to execute and deliver such further assignments of said
leases or rental agreements or guarantees thereof as Assignee may from time to
time request.

        This Assignment is absolute and effective immediately and without
possession. Notwithstanding the foregoing, Assignor shall have a license to
receive, collect and enjoy the rents, issues, profits and income accruing from
the Property until a default has occurred under the Note, the Security Deed or
any other instrument evidencing or securing the Note. Upon the occurrence of a
default, the license shall cease automatically, without need of notice,
possession, foreclosure or any other act or procedure, and all leases, rents,
issues, profits and income assigned hereby shall thereafter be payable to
Assignee.

        PROVIDED, ALWAYS that if the Assignor shall pay unto the Assignee the
indebtedness evidenced by the Note, and if the Assignor shall duly, promptly and
fully perform, discharge, 


<PAGE>   31


execute, effect, complete, comply with and abide by each and every one of the
agreements, conditions and covenants of the Note, the Security Deed, this
Assignment and all other instruments executed by Assignor to and in favor of
Assignee as further evidence of or as additional security for the indebtedness
(hereinafter together referred to as the "Loan Documents"), then this Assignment
and the estates and interests hereby granted and created shall terminate.

REPRESENTATIONS AND WARRANTIES OF ASSIGNOR

        1.  In furtherance of the foregoing assignment, Assignor:

                A. Represents and warrants that it is the owner in fee simple of
        the Property and has good title to the leases, rents, income, issues and
        profits hereby assigned and good right to assign the same, and that,
        except for a mortgage loan being paid off concurrently with the
        execution hereof, no other person, entity, firm or corporation has any
        right, title or interest therein; that Assignor has not previously sold,
        assigned, transferred, mortgaged or pledged said rents, issues, profits,
        income and leases of the Property; and that payment of any of the same
        has not otherwise been anticipated, waived, released, discounted, set
        off or otherwise discharged or compromised.

                B. Agrees and warrants that, without the prior written consent
        of the Assignee, except for matters normally occurring in connection
        with the operation of a garden apartment community, the terms of any and
        all leases will not be amended, altered, modified or changed in any
        manner whatsoever, nor will they be surrendered or canceled, nor will
        any proceedings for dispossession or eviction of any lessee under said
        leases be instituted by Assignor.

                C. Agrees and warrants that no request will be made of any
        lessee to pay any rent, and no rent will be accepted by Assignor, for
        more than one month in advance of the date such rent becomes due and
        payable under the terms of any and all leases, it being agreed between
        Assignor and Assignee that rent shall be paid as provided in said leases
        and not otherwise. The foregoing shall not prevent Assignor from
        charging and collecting security deposits from each tenant leasing space
        on the Real Property.

                D. Authorizes Assignee, by and through its employees or agents
        or a duly appointed receiver, at its option, after the occurrence of a
        default under this Assignment, the Note, the Security Deed or any of the
        Loan Documents, to enter upon the Property and to collect, in the name
        of Assignor, as its lawful attorney, or in its own name as assignee, any
        rents, income or profits accrued but unpaid and/or in arrears at the
        date of such default, as well as the rents, income or profits thereafter
        accruing and becoming payable during the period of the continuation of
        the said default or any other default. To this end, Assignor further
        agrees that it will cooperate with and facilitate, in all reasonable
        ways, Assignee's collection of said rents, income or profits and will,
        upon request by Assignee, execute a written notice to each tenant,
        occupant or licensee directing said tenant, occupant or licensee to pay
        directly to Assignee all income, rents and profits due and payable under
        said leases; provided, however, that Assignee may notify said tenant,
        occupant or licensee of the effectiveness of this Assignment without
        giving notice to Assignor or requesting Assignor to give such notice or
        join in such notice.

                E. Authorizes Assignee, upon such entry as specified in "D."
        above, at its option, to take over and assume the management, operation
        and maintenance of the Property and to perform all acts necessary and
        proper, and to expend such sums out of the income of the Property as in
        Assignee's sole discretion may be reasonable or necessary in connection
        therewith, in the same manner and to the same extent as Assignor
        theretofore might do. Assignor hereby releases all claims against
        Assignee arising out of such management, operation and maintenance.

                F. Agrees to execute, upon the request of the Assignee, any and
        all other instruments requested by the Assignee to effectuate this
        Assignment or to accomplish any 

                                      -2-
<PAGE>   32


        other purpose deemed by the Assignee to be necessary or appropriate in
        connection with, this Assignment.

                G. Agrees and acknowledges that nothing in this Assignment shall
        be construed to limit or restrict in any way the rights and powers
        granted to Assignee in the Note, the Security Deed or any of the other
        Loan Documents. The collection and application of the rents, issues and
        profits as described herein shall not constitute a waiver of any default
        which might at the time of application or thereafter exist under the
        Note, the Security Deed or any of the other Loan Documents, and the
        exercise by Assignee of the rights herein provided shall not prevent
        Assignee's exercise of any rights provided under the Note, the Security
        Deed or any of the other Loan Documents.

ASSIGNEE'S RIGHTS FOLLOWING DEFAULT BY ASSIGNOR

        2. Assignee may, after the occurrence of a default as hereinabove
provided, from time to time, appoint and dismiss such agents or employees as
shall be necessary or reasonable for the collection of the rents, issues and
profits derived from the Property and for the proper care and operation of the
Property, and Assignor hereby grants to Assignee the authority to give such
agents or employees so appointed full and irrevocable authority on Assignor's
behalf to manage the Property and to do all acts relating to such management,
including, without limitation, the entry into and execution of new leases in the
name of the Assignor or otherwise, the alteration or amendment of existing
leases, the authorization to repair or replace any items necessary in order to
maintain the building or buildings and chattels incidental thereto in good and
tenantable condition, and the effectuation of such alterations or improvements
as in the judgment of the Assignee may be reasonable or necessary to maintain or
increase the income from the Property. Assignee shall have the sole control of
such agents or employees, whose remuneration shall be paid out of the rents,
issues and profits as hereinabove provided, at the rate of compensation accepted
in the community wherein the Property is situated.

APPLICATION BY ASSIGNEE OF NET INCOME FROM THE PROPERTY

        3. Assignee shall, after payment of all charges and expenses enumerated
under Paragraph 2 above, and after retaining sufficient sums to meet taxes,
assessments, utilities and insurance coverages in requisite amounts (including
liability, fire and extended coverage), credit the net income received by
Assignee from the Property, by virtue of this Assignment, to any amounts due and
owing to Assignee by Assignor under and pursuant to the terms of the Note and
the Security Deed, but the manner of the application of such net income shall be
determined in the sole discretion of Assignee. Assignee shall make a reasonable
effort to collect rents, income and profits, reserving, however, within its sole
discretion, the right to determine the method of collection and the extent to
which enforcement of the collection of delinquent rents, income and profits
shall be prosecuted. Notwithstanding the foregoing, no such credit shall be
given by Assignee for any sum or sums received from the rents, issues and
profits of the Property until the sums collected are actually received by
Assignee at its principal office as stated above (or at such other place as
Assignee shall designate in writing), and no credit shall be given for any
uncollected rents or other uncollected amounts or bills, nor shall credit be
given for any rents, issues and profits derived from the Property under any
order of court or by operation of law until such amounts are actually received
by Assignee at its principal offices stated above. The net amount of income
received by Assignee hereunder applied by Assignee to the amounts due and owing
by the Assignor shall not serve to cure any default under the Note, the Security
Deed or any of the Loan Documents, nor shall any amounts received by Assignee
hereunder be in full satisfaction of the indebtedness evidenced by the Note
unless such amounts are sufficient to pay such indebtedness in full (including
any prepayment premiums, late payment charges, and advancements) in accordance
with the terms of the Note, the Security Deed and the other Loan Documents.

LIMITATION OF ASSIGNEE'S LIABILITY

        4. Assignee shall not be obligated to perform or discharge any
obligation under the leases hereby assigned or under or by reason of this
Assignment, and Assignor hereby agrees to 


                                      -3-
<PAGE>   33

indemnify and hold Assignee harmless against any and all liability, loss or
damage which Assignee might incur under the leases or under or by reason of this
Assignment and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on Assignee's part to perform or discharge any of the terms of such leases,
except for claims and demands arising by reason of Assignee's gross negligence
or willful misconduct.

REINSTATEMENT AFTER DEFAULT

        5. In the event that Assignor shall, with the consent of Assignee,
reinstate the indebtedness evidenced by the Note completely in good standing,
having complied with all the terms, covenants and conditions of the Note,
Security Deed, this Assignment and all of the other Loan Documents, then, in
such event, Assignee shall return possession of the Property to Assignor, and
Assignor shall remain in possession of the Property unless and until another
default occurs under the Note, the Security Deed, this Assignment or any of the
other Loan Documents, at which time Assignee may, at its option, again take
possession of the Property under authority of and pursuant to the terms and
provisions of this Assignment.

TENANT'S NOTIFICATION OF ASSIGNMENT

        6. Upon request by Assignee, at any time, Assignor will deliver a
written notice to each of the tenants and lessees of the Property, which notice
shall inform such tenants and lessees of this Assignment and instruct them that
upon receipt of notice by them from Assignee of the existence of a default by
Assignor under the Note, the Security Deed or any of the other Loan Document,
all rent due thereafter shall be paid directly to Assignee.

SATISFACTION OF SECURITY DEED; SATISFACTION OF ASSIGNMENT

        7. This Assignment shall remain in full force and effect as long as the
indebtedness evidenced by the Note and secured by the Security Deed remain
unpaid in whole or in part. It is understood and agreed that a complete release
or satisfaction of the aforesaid Security Deed shall operate as a complete
release or satisfaction of all of Assignee's rights and interest hereunder, and
that satisfaction of the Security Deed shall operate to satisfy this Assignment.

EXCULPATION

        8. The liability of Assignor with respect to the payment of principal
and interest under the Note shall be "non-recourse" and, accordingly, Assignee's
source of satisfaction of said indebtedness and Assignor's other obligations
hereunder and under the other Loan Documents shall be limited to the Property
and Assignee's receipt of the rents, issues and profits from the Property, and
Assignee shall not seek to procure payment out of any other assets of Assignor
or any person or entity comprising Assignor, nor to seek judgment (except as
hereinafter provided) for any sums which are or may be payable under the Note or
under any of the other Loan Documents, as well as any claim or judgment (except
as hereafter provided) for any deficiency remaining after foreclosure of the
Security Deed. Notwithstanding the above, nothing herein contained shall be
deemed to be a release or impairment of the indebtedness evidenced by the Note
or the security therefor intended by the other Loan Documents or be deemed to
preclude Assignee from exercising its rights to foreclose, or to exercise the
power of sale contained in, the Security Deed or to enforce any of its other
rights or remedies under the Loan Documents.

        Notwithstanding the foregoing, it is expressly understood and agreed
that the aforesaid limitation on liability shall in no way affect or apply to
Assignor's continued personal liability for:

        (A)     fraud or intentional misrepresentation made in or in connection
                with the Note or any of the other Loan Documents governing,
                securing or pertaining to the payment thereof;


                                      -4-
<PAGE>   34

        (B)     failure to pay taxes prior to delinquency or to pay assessments
                prior to delinquency or to pay charges for labor, materials or
                other charges which can create liens on any portion of the
                Property;

        (C)     the misapplication of (i) proceeds of insurance covering any
                portion of the Property, or (ii) proceeds of the sale or
                condemnation of any portion of the Property, or (iii) rentals
                held or received by or on behalf of Assignor subsequent to the
                date on which Assignee gives written notice of the commencement
                of foreclosure proceedings;

        (D)     causing or permitting waste to occur on, in or about the 
                Property, and failure to maintain the Property, excepting 
                ordinary wear and tear;

        (E)     loss by fire or casualty to the extent not compensated by 
                insurance proceeds collected by Assignee;

        (F)     the return to Assignee of all unearned advance rentals and
                security deposits paid by tenants of the Property and not
                refunded to or forfeited by such tenants;

        (G)     the return to Assignor of any and all fees paid to Assignee by
                tenants of the Property which fees permit tenants to terminate
                their leases;

        (H)     the return of, or reimbursement for, all personalty owned by
                Assignor taken from the Property by or on behalf of Assignor out
                of the ordinary course of business, and not replaced by
                personalty of equal or greater value than the original value of
                the personalty so removed;

        (I)     all court costs and Reasonable Attorneys' Fees actually incurred
                which are provided for in the Note or in any other Loan Document
                governing, securing or pertaining to the payment of the Note;

        (J)     (i) the removal of any chemical, material or substance, exposure
                to which is prohibited, limited or regulated by any Federal, 
                State, County, Regional or Local Authority which may or could
                pose a hazard to the health and safety of the occupants of the
                Property; and (ii) the restoration of the Property to comply
                with all governmental regulations pertaining to hazardous waste
                found in, on or under the Property regardless of the source of
                origination; and (iii) any indemnity or other agreement to hold
                the Assignee harmless from and against any and all losses,
                liabilities, damages, injuries, costs, expenses of any and every
                kind arising under Paragraph 3 of the Security Deed or under
                that certain Environmental Indemnity Agreement from Assignor to
                Assignee of even date herewith. Assignor shall not be liable
                hereunder if such materials were placed on the Property
                subsequent to the date of foreclosure of the Security Deed by
                Assignee or acceptance of a deed in lieu thereof, or
                relinquishment of control of the Property pursuant to a transfer
                approved in writing by Assignee; provided such transferee
                assumes in writing all obligations of Maker pertaining to the
                Loan Documents. Liability under this subparagraph shall extend
                beyond repayment of the Note and compliance with the terms of
                the Security Deed, unless at such time Assignor provides
                Assignee with an environmental assessment report acceptable to
                Assignee showing the Property to be free of Hazardous Materials
                and not in violation of Hazardous Waste Laws (as defined in the
                Security Deed). Assignor shall bear the burden of proof in
                establishing the date on which any such Hazardous Materials were
                placed or appeared in, on or under the Property.

        (K)     (a) any and all costs incurred in order to cause the Property 
                to comply with the applicable accessibility provisions of The
                Fair Housing Act of 1988, as the same may now or hereafter be
                amended, and any and all rules and regulations that may now or
                hereafter be promulgated in connection with said acts, and (b)
                any indemnity or other agreement to hold the Assignee harmless
                from and against any 


                                      -5-
<PAGE>   35


                and all losses, liabilities, damages, injuries, costs and
                expenses of any and every kind arising under Paragraph 3 of the
                Security Deed regarding accessibility for the disabled or
                handicapped or under the Accessibility Indemnity Agreement from
                Assignor to Assignee of even date herewith; provided, however,
                Assignor shall not be liable for compliance with any
                accessibility laws that first become effective, or for any
                violation of any accessibility laws resulting from alterations
                or improvements to the Property that are performed, subsequent
                to Assignee's actually taking possession of the Property
                pursuant to foreclosure of the Security Deed or acceptance of a
                deed in lieu thereof, or subsequent to any transfer of ownership
                of the Property that has the prior written approval of Assignee;
                provided that such transferee assumes in writing all obligations
                of Assignor with respect to compliance with accessibility laws
                under the Security Deed and Accessibility Indemnity Agreement.

        (L)     Obligations of Assignor for the face amount of any Letter of
                Credit held by Assignee and delivered by Assignor in connection
                with the loan evidenced by the Note in the event Assignor is
                unable to collect the full amount of said Letter of Credit for
                any reason. The obligations of Assignor in subparagraphs (A)
                through (L) above, except as provided in (J) and (K), shall
                survive the repayment and satisfaction of the Note and
                compliance with the terms of the Security Deed.

Notwithstanding anything in this Paragraph 8 to the contrary, this Paragraph 8
shall not be applicable, and Assignor shall be fully liable for Assignor's
obligations hereunder, as well as under the Note, the Security Deed and the
other Loan Documents, in the event there is a default by Assignor under Section
30 or Section 31 of the Security Deed.

GOVERNING LAWS

        9. This Assignment is executed and delivered as additional Security for
a loan transaction negotiated and consummated in Gwinnett County, Georgia and is
to be construed according to the laws of the State of Georgia, and the laws of
the United States.

REASONABLE ATTORNEYS' FEES

        10. As used herein, the phrase "Reasonable Attorneys' Fees" shall mean
fees charged by attorneys selected by Assignee based upon such attorneys
then-prevailing hourly rates as opposed to any amount or percentage specified by
any statute then in effect in the State of Georgia.

SUCCESSORS AND ASSIGNS

        11. The provisions of this Agreement shall inure to the benefit of
Assignee and its successors and assigns and shall be binding upon Assignor, its
personal representatives, successors and assigns. The creation of rights and
powers under this Agreement in favor of or available to Assignee shall, in no
way whatsoever, be construed to impose concomitant duties or obligations on
Assignee in favor of Assignor except as expressly set forth herein.

                                      -6-

<PAGE>   36


        IN WITNESS WHEREOF, the undersigned has caused this Assignment of
Leases, Rents and Profits to be executed under seal by persons duly authorized
thereunto as of the day and year first above written.

Signed, sealed and delivered in the   ROBERTS PROPERTIES RESIDENTIAL, L.P., a 
presence of:                          Georgia limited partnership

/s/ Charles R. Elliott                By:  Roberts Realty Investors, Inc., its 
------------------------                   sole General Partner
Unofficial Witness
                                           
/s/ Leslie A. Camp                         By:  /s/ Charles S. Roberts   
------------------------                      -------------------------  
Notary Public                                 Name:  Charles S. Roberts
                                              Title: President

     (NOTARY SEAL)                           (Corporate Seal)

My Commission Expires:

                                      -7-

<PAGE>   37


                                    EXHIBIT A


FEE PARCEL

All that tract of land in Land Lots 321 and 326 of the 6th District, City of
Duluth, Gwinnett County, Georgia described as follows:

BEGINNING at a 1/2-inch reinforcing rod found on the northeast right-of-way line
of Pleasant Hill Road (variable right-of-way), said 1/2-inch reinforcing rod
found being 1924.03 feet northwest along the northeast right-of-way line of
Pleasant Hill Road from the mitered intersection of the west right-of-way line
of Peachtree Industrial Boulevard (150 foot right-of-way) and the northeast
right-of-way line of Pleasant Hill Road (said 1/2-inch reinforcing rod found
also being 1973.90 feet northwest along the northeast right-of-way line of
Pleasant Hill Road from the intersection of the northeast right-of-way line of
Pleasant Hill Road and the west right-of-way line of Peachtree Industrial
Boulevard; said 1/2-inch reinforcing rod found also being the southwest corner
of property now or formerly known as Phase One, Plantation Trace Apartments as
per Deed Book 5215, page 151, Gwinnett County, Georgia records); running thence
along the said northeast right-of-way line of Pleasant Hill Road the following
courses and distances: (1) along the arc of a curve to the left (which arc is
subtended by a chord having a bearing and distance of North 61 degrees 48
minutes 40 seconds West 242.78 feet and a radius of 1548.326 feet) 243.03 feet
to a point, and (2) North 66 degrees 47 minutes 46 seconds West 81.46 feet to a
1/2-inch reinforcing rod found; thence, leaving said right-of-way line, North 23
degrees 09 minutes 50 seconds East 205.89 feet to a 1/2-inch reinforcing rod
found; thence North 39 degrees 12 minutes 37 seconds West 76.90 feet to a
1/2-inch reinforcing rod found; thence South 77 degrees 41 minutes 15 seconds
West 89.99 feet to a point; thence South 60 degrees 09 minutes 27 seconds West
45.03 feet to a 1/2-inch reinforcing rod found; thence South 38 degrees 09
minutes 50 seconds West 84.98 feet to a 1/2-inch reinforcing rod found; thence
South 23 degrees 17 minutes 54 seconds West 44.00 feet to a 1/2-inch reinforcing
rod found; thence South 66 degrees 49 minutes 53 seconds East 22.00 feet to a
point; thence South 23 degrees 10 minutes 07 seconds West 27.00 feet to a
1/2-inch reinforcing rod found on the northeast right-of-way line of Pleasant
Hill Road; thence along said right-of-way line the following courses and
distances: (1) North 66 degrees 46 minutes 36 seconds West 248.23 feet to a
point, and (2) North 71 degrees 12 minutes 08 seconds West 314.65 feet to a
point on the top bank of the Chattahoochee River; thence leaving said
right-of-way and running along the top bank of the Chattahoochee River the
following courses and distances: (1) North 17 degrees 49 minutes 59 seconds East
17.09 feet to a point, (2) North 15 degrees 49 minutes 59 seconds East 125.63
feet to a point, (3) North 13 degrees 18 minutes 00 seconds East 151.29 feet to
a point, (4) North 16 degrees 41 minutes 32 seconds East 126.35 feet to a point,
(5) North 19 degrees 38 minutes 59 seconds East 179.27 feet to a point, (6)
North 14 degrees 04 minutes 09 seconds East 135.20 feet to a point, (7) North 07
degrees 56 minutes 24 seconds East 133.23 feet to a point, and (8) North 07
degrees 57 minutes 06 seconds East 173.55 feet to a point; thence, leaving said
top bank of the Chattahoochee River, South 87 degrees 59 minutes 08 seconds East
902.71 feet to 1/2-inch reinforcing rod found; thence South 62 degrees 13
minutes 06 seconds East 244.24 feet to a 1/2-inch reinforcing rod found; thence
South 18 degrees 33 minutes 59 seconds East 189.71 feet to a point; thence South
22 degrees 29 minutes 29 seconds West 137.19 feet to a point; thence South 00
degrees 13 minutes 30 seconds West 129.61 feet to a point; thence South 18
degrees 34 minutes 13 seconds West 348.80 feet to a point; thence South 32
degrees 26 minutes 03 seconds West 216.62 feet to a point; thence South 28
degrees 09 minutes 32 seconds West 370.40 feet to the POINT OF BEGINNING; said
tract containing approximately 31.60012 acres and being shown on that certain
plat of ALTA/ACSM Land Title Survey for Roberts Properties Residential, L.P.,
Nationwide Life Insurance Company, Nationwide Life & Annuity Insurance Company
and Commonwealth Land Title Insurance Company prepared by Watts & Browning -
Engineers, bearing the seal and certification of V.T. Hammond, Georgia
Registered Professional Land Surveyor No. 2554, dated September 9, 1996, last
revised October 14, 1996.

                                      -8-

<PAGE>   38

EASEMENT NO. 1

TOGETHER WITH a non-exclusive right, title and interest in and to the easements
appurtenant to the above described fee tract created by and described in that
certain Reciprocal Easement and Covenant Agreement between Partridge Greene,
Inc. and Roberts Properties River Oaks, L.P., a Georgia limited partnership,
dated August 21, 1991, recorded in Deed Book 6714, page 142, Gwinnett County,
Georgia records, as amended by First Amendment to Reciprocal Easement and
Covenant Agreement between Roberts Properties River Oaks, L.P. and Roberts
Properties, Inc., dated August 15, 1994, filed for record August 17, 1994, and
recorded in Deed Book 10601, page 180, aforesaid records, over, across and
through that certain 0.86088 acre parcel shown on the above described plat of
ALTA/ACSM Land Title Survey for Roberts Properties Residential, L.P., Nationwide
Life Insurance Company, Nationwide Life & Annuity Insurance Company and
Commonwealth Land Title Insurance Company.

EASEMENT NO. 2

TOGETHER WITH a non-exclusive right, title and interest in and to the easement
appurtenant to the above-described fee tract created by and described in that
certain Reciprocal Drainage Easement Agreement dated November 21, 1988, between
David Berkman and Gerald A. Blonder and Partridge Greene, Inc., recorded in Deed
Book 5215, page 141, aforesaid records.


                                      -9-