Document:

<PAGE>
                                                                  EXHIBIT 10.4.2

                                PROMISSORY NOTE

                                                            Birmingham, Alabama
$24,000,000                                                   February 21, 2002

         For value received, without grace, ROBERTS PROPERTIES RESIDENTIAL,
L.P., a Georgia limited partnership authorized to do business in North Carolina
as Roberts Properties Residential, Limited Partnership (the "Borrower"),
promises to pay to the order of AMSOUTH BANK, a state banking corporation (the
"Bank") (the Bank, hereinafter, along with any other holder of this note,
called the "Creditor"), the principal sum of Twenty-Four Million and No/100
Dollars ($24,000,000), with interest on the unpaid balance thereof from the
date hereof until paid in full at the LIBOR-Based Rate or the Prime Rate, as
such terms are defined in, and selected under, the hereafter defined Loan
Agreement. Unless otherwise defined herein, capitalized terms shall have the
meaning assigned to them in the Loan Agreement. Pursuant to Section 2.03 of the
Loan Agreement, no more than three (3) LIBOR-Based Contracts may be in effect
hereunder at any one time. Interest shall be computed on the basis that each
year contains 360 days, by multiplying the principal amount by the per annum
rate set forth above, dividing the product so obtained by 360, and multiplying
the quotient thereof by the actual number of days elapsed.

         Notwithstanding the foregoing, to enable the Creditor to send periodic
billing statements in advance of each interest payment date, the Creditor shall
have the option of basing such billing statements on the applicable interest
rate and outstanding principal balance in effect fifteen (15) days prior to
each such payment and computing the amount of interest on the billing statement
on the assumption that the applicable interest rate and outstanding principal
balance will continue in effect until the payment date. If the Creditor elects
to do so and the applicable interest rate or outstanding principal balance
changes during such fifteen (15)-day period, the difference between the amount
of interest that actually accrues during such period and the amount of interest
paid will be added to or subtracted from (as the case may be) the interest
otherwise payable in preparing the next billing statement. In determining the
amount of interest payable at the final maturity or upon full prepayment of
this note, all changes in the applicable interest rate and outstanding
principal balance occurring on or prior to the day before the final maturity
date or the date of such prepayment shall be taken into account.

         Accrued interest only shall be payable monthly, beginning on April 10,
2002, and continuing on the same day of each month thereafter, through the
payment due on March 10, 2005. Commencing on April 10, 2005, and continuing on
the same day of each month thereafter through the payment due on February 10,
2006, principal and interest shall be payable in monthly installments, with the
principal portion of such installments calculated on an assumed amortization
period of thirty (30) years at an assumed interest rate of seven percent
(7.0%), plus actual interest. The entire principal balance of said debt,
together with accrued interest thereon, shall be due and payable in full on
March 10, 2006, which payment shall be a balloon payment. If the Borrower
exercises the first extension option described in Section 2.10 of the Loan
Agreement and is granted a twelve (12)-month extension of the debt evidenced
hereby, the March 10, 2006 payment shall be another payment of principal and
interest, and similar payments of principal and interest (utilizing

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the same amortization schedule) shall be made on the 10th day of each
consecutive month through the payment due on February 10, 2007. The entire
principal balance of said debt, together with accrued interest thereon, shall
be due and payable in full on March 10, 2007, which payment shall be a balloon
payment. If the Borrower exercises the second extension option described in
Section 2.10 of the Loan Agreement and is granted another twelve (12)-month
extension of the debt evidenced hereby, the March 10, 2007 payment shall be
another payment of principal and interest, and similar payments of principal
and interest (utilizing the same amortization schedule) shall be made on the
10th day of each consecutive month through the payment due on February 10, 2008.
The entire principal balance of said debt, together with accrued interest
thereon, shall be due and payable in full on March 10, 2008, which payment
shall be a balloon payment. Each installment shall be applied first to
accumulated interest and the remainder to the unpaid principal balance.

         The Borrower may pay in advance the principal sum of this loan, in
whole or in part, with accrued interest to the date of prepayment, without
penalty or fee, subject to the terms of Section 2.03D of the Loan Agreement.
This note shall be payable at the main office of the Creditor or such other
place as the Creditor shall designate from time to time.

         If any installment of principal or interest is in default ten (10)
days or more (whether by acceleration or otherwise) such amount in default
shall bear interest at the rate equal to two percent (2%) in excess of the
Prime Rate.

         Unless otherwise stipulated, the Borrower agrees to pay to the
Creditor, on demand, a late charge computed as follows to cover the extra
expense involved in handling late payments: If interest or principal and
interest are payable in installments, the late charge will be equal to 5% of
any payment that is not paid within twelve (12) days after it is due. If
principal and interest are payable at maturity, the late charge will be equal
to 5% of the interest portion of the payment that is not paid within twelve
(12) days after it is due.

         This late charge will never be less than $10.00 nor more than $250.00
on each payment. This provision shall not be deemed to excuse a late payment or
be deemed a waiver of any other right the Creditor may have including, without
limitation, the right to declare the entire unpaid principal and interest
immediately due and payable.

         The proceeds of this note are to be advanced in accordance with the
terms of a Loan Agreement between the Borrower and the Bank of even date
herewith (the "Loan Agreement"). This note is secured and guaranteed by the
following instruments executed and delivered to the Creditor, together with
such other instruments as may have been delivered previously or simultaneously
to the Bank, even though not listed (all of such instruments are hereinafter
referred to as the "Security Documents"):

<TABLE>
<CAPTION>
Instrument                                 Executed By                         Date
----------                                 -----------                         ----
<S>                                        <C>                                 <C>
Deed of Trust, Security Agreement and      Borrower                            of even date
Assignment of Rents and Leases

Guaranty Agreement                         Roberts Realty Investors, Inc.      of even date

Assignment of Contract Documents           Borrower                            of even date
</TABLE>

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         It is hereby agreed that if default be made in the payment of this
note or any part hereof or any interest hereon (subject to the notice and cure
period described in Section 6.01(a) of the Loan Agreement), or if an event of
default occurs under any Security Document or the Loan Agreement (after the
expiration of any applicable notice and cure period provided therein), then, at
the option of the Creditor, the entire unpaid principal balance of this note,
with accrued interest thereon, shall at once become due and payable in full,
without notice, time being of the essence of this contract.

         Subject to the provisions of the next paragraph below, any
controversy, claim, dispute or disagreement arising out of, in connection with
or relating to (1) the negotiation, execution, collateralization,
administration, repayment, modification, extension or collection of this note,
or the debt evidenced hereby (the "Loan") or any agreement or instrument
relating to this note or the Loan, or (2) an alleged tort relating in any way
to this note, the Loan or any agreement or instrument relating to this note or
the Loan, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the "Rules"). The
"Expedited Procedures" as provided in those Rules shall apply in any dispute
where the aggregate of all claims and the aggregate of all counterclaims each
is an amount less than $500,000. Judgment upon any award rendered by the
arbitrator(s) in any such arbitration may be entered in any Court having
jurisdiction thereof. Any demand for arbitration under this note shall be made
no later than the date when any judicial action upon the same matter would be
barred by any applicable statute of limitations. The locale of any arbitration
proceedings under this note shall be in Birmingham, Alabama, unless the
Borrower and the Creditor mutually agree otherwise. The Borrower and the
Creditor specifically acknowledge and agree that this note evidences, and the
Loan is, a "transaction involving commerce" under the Federal Arbitration Act,
and the Borrower and the Creditor hereby waive and relinquish any right to
claim otherwise.

         Neither anything contained in the preceding paragraph nor the exercise
of any right to arbitrate shall limit the right of any party to (1) foreclose
against any real or personal property collateral by the exercise of the power
of sale under a deed of trust, mortgage, security deed, deed to secure debt, or
other security agreement or instrument or under applicable law; (2) exercise
any self-help remedies such as setoff or repossession; or (3) obtain
provisional or ancillary remedies such as replevin, injunctive relief,
attachment, or appointment of a receiver from a court having jurisdiction,
before, during or after the pendency of any arbitration proceeding. This
arbitration provision shall not be interpreted to require that any such
remedies be stayed, abated or otherwise suspended pending any arbitration or
request for arbitration. The exercise of a remedy shall not be deemed a waiver
of either party's right to resort to arbitration.

         The Borrower waives demand, presentment, protest, notice of protest,
suit and all other requirements necessary to hold it liable, and the Borrower
agrees that time of payment may be extended or renewal notes taken or other
indulgences granted without notice of, or consent to, such action, and without
release of liability. The Borrower agrees to pay after default all costs of

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<PAGE>

collecting or securing or attempting to collect or secure this note, including
reasonable attorneys' fees.

         The Borrower hereby waives as to this debt or any renewal or extension
thereof all rights of exemption under the constitution or laws of Alabama or
any other state as to personal property.

         The Creditor, if a bank, may, but shall not be required to, apply to
the payment of the debt evidenced hereby, on or after the maturity of said
debt, whether by acceleration or otherwise, any money or credit held by the
Creditor on deposit, in trust or otherwise, for the account of the Borrower.

         This note has been executed by the Borrower without condition that
anyone else should sign or become bound hereunder and without any other
conditions whatever being made. The provisions hereof are binding on the
successors and assigns of the Borrower, and shall inure to the benefit of the
Creditor, its successors and assigns.

         The Creditor shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies, and no waiver of any kind
shall be valid against the Creditor unless in writing and signed by the
Creditor. All rights and remedies of the Creditor hereunder and under any
statute or rule of law shall be cumulative and may be exercised successively or
concurrently. This note shall be governed by and construed in accordance with
the laws of the State of Alabama.

                                ROBERTS PROPERTIES RESIDENTIAL, L.P.,
                                a Georgia limited partnership authorized to do
                                business in North Carolina as Roberts Properties
                                Residential, Limited Partnership

                                By: Roberts Realty Investors, Inc., a Georgia
                                    corporation, sole general partner

                                 By: /s/ Charles R. Elliott
                                    --------------------------------------------
                                    Charles R. Elliott, Secretary and Treasurer

                                8010 Roswell Road, Suite 120
                                Atlanta, Georgia 30350

                                Tax I.D. Number 58-2122875

                                       4<PAGE>
                                                                  EXHIBIT 10.4.3

This Instrument prepared by:

Dawn Helms Sharff, Esq.
Walston, Wells, Anderson & Bains, LLP
505 20th Street North, Suite 500
Birmingham, AL 35203
205-251-9600

STATE OF NORTH CAROLINA    )

MECKLENBURG COUNTY         )

                       DEED OF TRUST, SECURITY AGREEMENT
                       AND ASSIGNMENT OF RENTS AND LEASES

                  THIS Deed of Trust, Security Agreement and Assignment of Rents
and Leases (the "deed of trust") is made and entered into as of this 21st day of
February, 2002, by and between ROBERTS PROPERTIES RESIDENTIAL, L.P., a Georgia
limited partnership authorized to do business in North Carolina as Roberts
Properties Residential, Limited Partnership (the "Mortgagor"), whose address for
notice purposes is 8010 Roswell Road, Suite 120, Atlanta, Georgia 30350, in
favor of L. HUNTER MEACHAM, JR. of Fidelity National Title Insurance Company,
201 South Tryon Street, Suite 1450, Charlotte, NC 28202 (the "Trustee"), for the
benefit of AMSOUTH BANK, an Alabama banking corporation (the "Beneficiary")
whose address is P.O. Box 11007, Birmingham, Alabama 35288, Attention:
Commercial Real Estate Loan Department.

                                    RECITALS

                  A.       The Mortgagor is, or hereafter shall be, justly
indebted to the Beneficiary in the aggregate principal amount of $24,000,000, as
evidenced by a promissory note of even date herewith, in the principal amount of
$24,000,000, which note bears interest as provided therein (the "Note").

                  B.       To secure the Note, and to induce the Beneficiary to
extend credit to the Mortgagor on the strength of the security provided by this
deed of trust and convey the property described herein to the Beneficiary as
hereinafter set forth, the Mortgagor has agreed to execute and deliver this deed
of trust to the Trustee for the benefit of the Beneficiary.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the above Recitals, and to
secure the payment of the following (hereinafter collectively referred to as the
"Debt"):

                  (1)      the payment of the debt evidenced by the Note, and
         interest thereon and any and every extension, renewal and modification
         thereof, or of any part thereof, and all interest on all such
         extensions, renewals and modifications;

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                  (2)      all indebtedness, obligations and liabilities of the
         Mortgagor to the Beneficiary with regard to any interest rate swap or
         interest rate hedge agreement (or other similar derivative product) now
         existing or hereafter executed that is related to the Note; and

                  (3)      the compliance with all of the stipulations,
         covenants, agreements, representations, warranties and conditions
         contained in this deed of trust;

the Mortgagor does hereby grant, bargain, sell, convey and confirm unto the
Trustee, its successors and assigns in trust, the property and interests in
property described in the following Granting Clauses A through E, both
inclusive, and does grant to the Trustee a security interest in said property
and interests in property:

         A.       The real estate described on Exhibit A attached hereto and
                  made a part hereof (the "Real Estate") and all improvements,
                  structures, buildings and fixtures now or hereafter situated
                  thereon (the "Improvements").

         B.       All permits, easements, licenses, rights-of-way, contracts,
                  privileges, immunities, tenements and hereditaments now or
                  hereafter pertaining to or affecting the Real Estate or the
                  Improvements.

         C.                (i)      All leases, written or oral, and all
                  agreements for use or occupancy of any portion of the Real
                  Estate or the Improvements with respect to which the
                  Mortgagor is the lessor, including but not limited to any
                  existing leases, any and all extensions and renewals of said
                  leases and agreements and any and all further leases or
                  agreements, now existing or hereafter made, including
                  subleases thereunder, upon or covering the use or occupancy
                  of all or any part of the Real Estate or the Improvements
                  (all such leases, subleases, agreements and tenancies
                  heretofore mentioned, being hereinafter collectively referred
                  to as the "Leases");

                           (ii)     any and all guaranties of the lessee's and
                  any sublessee's performance under any of the Leases;

                           (iii)    the immediate and continuing right to
                  collect and receive all of the rents, income, receipts,
                  revenues, issues and profits now due or which may become due
                  or to which the Mortgagor may now or shall hereafter
                  (including during the period of redemption, if any) become
                  entitled or may demand or claim, arising or issuing from or
                  out of the Leases or from or out of the Real Estate or any of
                  the Improvements, or any part thereof, including but not
                  limited to, minimum rents, additional rents, percentage
                  rents, common area maintenance charges, parking charges, tax
                  and insurance premium contributions, and liquidated damages
                  following default, the premium payable by any lessee upon the
                  exercise of any cancellation privilege provided for in any of
                  the Leases, and all proceeds payable under any policy of
                  insurance covering loss of rents resulting from
                  untenantability caused by destruction or damage to the Real
                  Estate or the Improvements, together with any and all rights
                  and claims of any kind that the Mortgagor may have against
                  any such lessee

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                  under the Leases or against any subtenants or occupants of the
                  Real Estate or any of the Improvements, all such moneys,
                  rights and claims in this paragraph described being
                  hereinafter referred to as the "Rents"; provided, however, so
                  long as no Event of Default has occurred, the Mortgagor shall
                  have the right under a license granted hereby to collect,
                  receive and retain the Rents (but not prior to accrual
                  thereof); and

                           (iv)     any award, dividend or other payment made
                  hereafter to the Mortgagor in any court procedure involving
                  any of the lessees under the Leases in any bankruptcy,
                  insolvency or reorganization proceedings in any state or
                  federal court and any and all payments made by lessees in lieu
                  of rent. The Mortgagor hereby appoints the Trustee as the
                  Mortgagor's irrevocable attorney in fact to appear in any
                  action and/or to collect any such award, dividend or other
                  payment.

         D.       All building materials, equipment, fixtures, tools, apparatus
                  and fittings of every kind or character now owned or hereafter
                  acquired by the Mortgagor for the purpose of, or used or
                  useful in connection with, the Improvements, wherever the same
                  may be located, including, without limitation, all lumber and
                  lumber products, bricks, stones, building blocks, sand,
                  cement, roofing materials, paint, doors, windows, hardware,
                  nails, wires, wiring, engines, boilers, furnaces, tanks,
                  motors, generators, switchboards, elevators, escalators,
                  plumbing, plumbing fixtures, air-conditioning and heating
                  equipment and appliances, electrical and gas equipment and
                  appliances, stoves, refrigerators, dishwashers, hot water
                  heaters, garbage disposers, trash compactors, other
                  appliances, carpets, rugs, window treatments, lighting,
                  fixtures, pipes, piping, decorative fixtures, and all other
                  building materials, equipment and fixtures of every kind and
                  character used or useful in connection with the Improvements.

         E.       Any and all other real or personal property of every kind and
                  nature from time to time hereafter by delivery or by writing
                  of any kind conveyed, mortgaged, pledged, assigned or
                  transferred to the Trustee or the Beneficiary, or in which the
                  Beneficiary is granted a security interest, as and for
                  additional security hereunder by the Mortgagor, or by anyone
                  on behalf of, or with the written consent of, the Mortgagor.

(All of the property and interests in property described in the foregoing
Granting Clauses A through E, both inclusive, are herein sometimes collectively
called the "Property". The personal property described in Granting Clause D and
all other personal property covered by this deed of trust are herein sometimes
collectively called the "Personal Property".)

                  SUBJECT, HOWEVER, to the easements, rights-of-way and other
exceptions described on Exhibit B hereto ("Permitted Exceptions").

                  To have and to hold the Property unto the Trustee, its
successors and assigns in fee simple forever, but upon the trust and for the
uses and purposes hereinafter set forth.

                                       3

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                  This deed of trust is executed and delivered in part to secure
future advances which may be made by the Beneficiary in conjunction with the
Debt. The amount of present obligations secured hereby is "________" and No/100
Dollars ($__________), and the maximum principal amount secured hereby
including such present obligations and future advances is Twenty-Four Million
and No/100 Dollars ($24,000,000). The period within which the future advances
may be made hereunder will expire fifteen (15) years from the date hereof, and
the making of such future advances is "obligatory" as that term is used in ss.
45-70 of the General Statutes of North Carolina.

                  1.       Warranties of Title. The Mortgagor covenants with the
Beneficiary and Trustee, their respective successors and assigns, that the
Mortgagor is lawfully seized in fee simple of the Real Estate and the rest of
the Property to the extent it constitutes Real Estate and is the lawful owner
of, and has good title to, the Personal Property, Improvements and other
Property and has a good right to sell and convey the Property as aforesaid; that
the Property is free of all encumbrances, unless otherwise provided hereinbefore
as Permitted Exceptions; and that the Mortgagor will warrant and forever defend
the title to the Property unto the Beneficiary and Trustee, their respective
successors and assigns, against the lawful claims of all persons.

                  2.       Maintenance of Lien Priority. The Mortgagor shall
take all steps necessary to preserve and protect the validity and priority of
the liens on, security interests in, and assignment of, the Property created
hereby. The Mortgagor shall execute, acknowledge and deliver such additional
instruments as the Beneficiary may deem necessary in order to preserve, protect,
continue, extend or maintain the liens, security interests and assignments
created hereby as first liens on, security interests in, and assignments of, the
Property, except as otherwise permitted under the terms of this deed of trust.
All costs and expenses incurred in connection with the protection, preservation,
continuation, extension or maintaining of the liens, security interests and
assignments hereby created shall be paid by the Mortgagor.

                  3.       Representations and Warranties Related to Rents and
Leases.

                  (a)      The Mortgagor has good title to the Rents and Leases
hereby assigned and good right to assign the same, and no other person,
corporation or entity has any right, title or interest therein.

                  (b)      The Mortgagor has not previously sold, assigned,
transferred, mortgaged or pledged the Leases or the Rents, whether now due or
hereafter to become due.

                  (c)      No Rents due for any period subsequent to the month
next succeeding the date of this deed of trust have been collected, and no
payment of any of the Rents has otherwise been anticipated, waived, released,
discounted, set-off or otherwise discharged or compromised, other than as
occurring in the ordinary course of business.

                  (d)      The Mortgagor has not received any funds or deposits
from any lessee in excess of one month's rent for which credit has not already
been made on account of accrued rents.

                                       4

<PAGE>

                  4.       Covenants To Pav Liens and Maintain Insurance. For
the purpose of further securing the payment of the Debt, the Mortgagor agrees
to: (a) pay all taxes, assessments, and other liens taking priority over this
deed of trust (hereinafter jointly called "Liens"), and if default is made in
the payment of the Liens, or any part thereof, the Beneficiary, at its option,
may pay the same; and (b) keep the Property continuously insured (or cause the
Property to be so continuously insured), in such manner and with such companies
as may be satisfactory to the Beneficiary, against loss by flood (to the extent
allowed by law, if the Property is located in a flood-prone area), fire,
windstorm, vandalism and malicious mischief and other perils usually covered by
a fire insurance policy with standard extended coverage endorsement, with loss,
if any, payable (pursuant to loss payable clauses in form and content
satisfactory to the Beneficiary) to the Beneficiary, as its interests may
appear. During construction of the Improvements, said insurance requirement may
be satisfied by an acceptable builder's risk insurance policy maintained by
either the Mortgagor or the Mortgagor's general contractor. To the extent
allowed by law, such insurance shall be in an amount at least equal to the full
insurable value of the Personal Property and Improvements unless the Beneficiary
agrees in writing that such insurance may be in a lesser amount. A copy of the
insurance policy and all replacements therefor, shall be delivered to, and held
by, the Beneficiary until the Debt is paid in full. The insurance policy and all
replacements therefor must provide that they may not be canceled without the
insurer's giving at least thirty (30) days' prior written notice of such
cancellation to the Beneficiary. So long as no Improvements are located on the
Real Estate, fire and casualty insurance are waived.

                  5.       Assignment of Insurance Policies, etc. The Mortgagor
hereby assigns and pledges to the Beneficiary and Trustee, as further security
for the payment of the Debt, each and every policy of hazard insurance now or
hereafter in effect which insures the Property, or any part thereof (including
without limitation the Personal Property and Improvements, or any part thereof),
together with all right, title and interest of the Mortgagor in and to each and
every such policy, including, but not limited to, all the Mortgagor's right,
title and interest in and to any premiums paid on each such policy, including
all rights to return premiums. If the Mortgagor fails to keep the Property
insured as specified above then, at the election of the Beneficiary and without
notice to any person, the Beneficiary may, but shall not be obligated to, insure
the Property for its full insurable value (or for such lesser amount as the
Beneficiary may wish) against such risks of loss and for its own benefit. In the
event of a loss, the proceeds from such insurance shall be paid to the
Beneficiary and (after reimbursement to the Beneficiary for any costs and
expenses incurred by the Beneficiary in collecting same) remitted to the
Mortgagor for restoration of and repairs to the Property, in accordance with the
Beneficiary's standard construction loan procedures unless either (i) the
casualty or loss occurs within one (1) year from the maturity date of the Note
or (ii) the loss represents more than 75% of the value of the Improvements, in
which case the proceeds from the insurance (less the costs of collecting the
same) may be credited against the Debt, at the election of the Beneficiary. The
ability of the Mortgagor to receive the insurance proceeds, as set forth in the
preceding sentence, shall be contingent on there being no Event of Default that
is continuing and the Mortgagor's possessing all insurance for the Property
required by the Beneficiary, specifically including coverage for loss of rents.
To the extent allowed by law, all amounts spent by the Beneficiary for insurance
or for the payment of Liens shall become a debt due by the Mortgagor to the
Beneficiary and at once payable, without demand upon, or notice to, the
Mortgagor, and shall be secured by this deed of trust, and shall bear interest
at the rate of interest set forth in the Note, or such lesser rate of interest

                                       5

<PAGE>
as shall then be the maximum amount permitted by law, from the date of payment
by the Beneficiary until paid by the Mortgagor.

                  6.       Assignment of Condemnation Proceeds, etc. As further
security for the Debt and the full and complete performance of each and every
obligation, covenant, agreement and duty of the Mortgagor contained herein, and
to the extent of the full amount of the Debt secured hereby and of the costs and
expenses (including reasonable attorney's fees) incurred by the Trustee and
Beneficiary in the collection of any award or payment, the Mortgagor hereby
assigns to the Trustee and Beneficiary any and all awards or payments, including
all interest thereon, together with the right to receive the same, that may be
made to the Mortgagor with respect to the Property as a result of (a) the
exercise of the right of eminent domain, (b) the alteration of the grade or of
any street or (c) any other injury to or decrease in value of the Property. In
the event of such an award or payment, the proceeds of such award shall be paid
to the Beneficiary and (after reimbursement to the Beneficiary for any costs and
expenses incurred by the Beneficiary in collecting same) remitted to the
Mortgagor if needed for restoration of or repairs to the Property, in accordance
with the Beneficiary's standard construction loan procedures unless either (i)
the award or payment is made within one (1) year from the maturity date of the
Note or (ii) more than 25% of the Property is taken as a result of such eminent
domain or other proceeding, in which case the proceeds from such award (less the
costs of collecting the same) may be credited against the Debt, at the election
of the Beneficiary. The ability of the Mortgagor to receive the proceeds of any
such award, as set forth in the preceding sentence, shall be contingent on there
being no Event of Default that is continuing and the Mortgagor's possessing all
insurance for the Property required by the Beneficiary, specifically including
coverage for loss of rents.

                  7.       Covenant Against Waste. The Mortgagor agrees to take
good care of the Real Estate and all Improvements and Personal Property and not
to commit or permit any waste thereon, and at all times to maintain such
Improvements and Personal Property in as good condition as they now are,
reasonable wear and tear excepted.

                  8.       Hazardous Substances.

                  (a)      Except for the hazardous materials and substances and
the use thereof required to operate and maintain the Improvements and materials
and substances typically located in garden-style apartment communities (so long
as such materials and substances are maintained and stored in compliance with
all applicable federal, state and local statutory and regulatory environmental
requirements), the Mortgagor shall not make, store, use, treat, release or
dispose of any hazardous substances, pollutants or other contaminants
("Prohibited Substances") on or under the Real Estate. If any such Prohibited
Substances are nonetheless made, stored, used, treated, released, disposed of or
found to exist on or under the Real Estate, the Mortgagor shall give immediate
written notice to the Beneficiary of such occurrence or existence. If the
Mortgagor fails to keep the Real Estate or Improvements free of such Prohibited
Substances, the Beneficiary may, but shall not be obligated to, do or cause to
be done such acts as are necessary or desirable in the Beneficiary's opinion to
test for, remove and dispose of such Prohibited Substances. All amounts spent by
the Beneficiary for the testing, removal and disposal of such Prohibited
Substances and the return of the Real Estate and Improvements to a condition
free of Prohibited Substances to the extent necessary to comply with

                                       6

<PAGE>

applicable law shall become a debt due by the Mortgagor to the Beneficiary and
at once payable, without demand or notice, and shall become a part of the Debt
secured by this deed of trust, to bear interest as provided in the Note from the
date of payment by the Beneficiary until paid by the Mortgagor.

                  (b)      The Mortgagor hereby warrants that (i) there are no
civil, criminal or administrative environmental proceedings involving the Real
Estate that are pending or to the Mortgagor's knowledge threatened; (ii) the
Mortgagor knows of no facts or circumstances that might give rise to such a
proceeding in the future; (iii) to the Mortgagor's knowledge, the Real Estate is
in compliance with all applicable federal, state and local statutory and
regulatory environmental requirements; and (iv) to the Mortgagor's knowledge,
the Real Estate is free from any and all "hazardous substances," "pollutants"
and other "contaminants," as those terms are defined in the federal
Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA")
and rules and regulations thereunder. The Mortgagor shall give immediate written
notice to the Beneficiary of any actual or threatened "release" (as defined in
CERCLA and rules and regulations thereunder) of such substances on or from the
Real Estate or any portion thereof at any time during or preceding the
Mortgagor's ownership of the Real Estate. The Mortgagor shall indemnify and hold
the Beneficiary and Trustee harmless from and against all loss, damages, fines,
penalties, liability and expenses (including but not limited to reasonable
attorneys' fees and costs of investigation and litigation) caused by or in any
manner resulting from such substances on or under the Real Estate or any portion
thereof at any time during or preceding the Mortgagor's ownership of the Real
Estate. The indemnity provisions of this paragraph 8 shall survive the
satisfaction of this deed of trust and shall continue in full force and effect
notwithstanding the payment of the Debt in full for claims arising during or
preceding the Mortgagor's ownership of the Real Estate.

                  9.       Covenants Related to Rents and Leases. The Mortgagor
covenants and agrees that the Mortgagor shall:

                  (a)      observe, perform and discharge all obligations,
covenants and warranties provided for under the terms of the Leases to be kept,
observed and performed by the Mortgagor, and shall give prompt notice to the
Beneficiary in the event the Mortgagor fails to observe, perform and discharge
the same;

                  (b)      enforce or secure in the name of the Beneficiary the
performance of each and every obligation, term, covenant, condition and
agreement to be performed by any lessee under the terms of the Leases;

                  (c)      appear in and defend any action or proceeding arising
under, occurring out of, or in any manner connected with the Leases or the
obligations, duties or liabilities of the Mortgagor and any lessee thereunder,
and, upon request by the Beneficiary to do so in the name and on behalf of the
Beneficiary but at the expense of the Mortgagor, and to pay all costs and
expenses of the Beneficiary, including reasonable attorneys' fees, in any action
or proceeding in which the Beneficiary may appear;

                                       7

<PAGE>

                  (d)      except in the ordinary course of the apartment
leasing business, not receive or collect any Rents from any present or future
lessee of the Real Estate or any of the Improvements, or any part thereof, for a
period of more than one month in advance, or pledge, transfer, mortgage or
otherwise encumber or assign future payments of the Rents;

                  (e)      except in the ordinary course of the apartment
leasing business, not waive, excuse, condone, discount, set off, compromise, or
in any manner release or discharge any lessee of the Real Estate or any of the
Improvements of and from any obligations, covenants, conditions and agreements
by said lessee to be kept, observed and performed, including the obligation to
pay rent in the manner and at the place and time specified in any Lease;

                  (f)      except in the ordinary course of the apartment
leasing business, not cancel, terminate or consent to any surrender of any
Lease, or modify or in any way alter the terms thereof without, in each such
instance, the prior written consent of the Beneficiary;

                  (g)      lease the Property only under arms length leases for
a rental rate, which, in the Mortgagor's best judgment, represents a fair market
rental rate;

                  (h)      promptly upon the request of the Beneficiary, furnish
the Beneficiary with a current rent roll; and

                  (i)      promptly upon the execution by the Mortgagor of any
future Lease not pertaining to the leasing by a tenant for an apartment unit,
(i) furnish the Beneficiary with the name and address of the lessee thereunder,
the term of such Lease and a description of the premises covered thereby and,
upon request of the Beneficiary, a copy of such Lease, and (ii) execute all such
further assignments of such Lease and the Rents therefrom as the Beneficiary may
require.

                  10.      Covenant Against Sale, Lease or Transfer, etc.
Notwithstanding any other provision of this deed of trust or the Note, if the
Real Estate or the Improvements, or any part thereof, or any interest therein,
is sold, leased (other than in the ordinary course of business), conveyed or
transferred, without the Beneficiary's prior written consent, or if the Real
Estate or the Improvements, or any part thereof, or any interest therein,
becomes subject to any additional lien, deed of trust, mortgage or other
encumbrance, either voluntarily or involuntarily, without the Beneficiary's
prior written consent, the Beneficiary may, at its sole option: (a) declare the
Debt immediately due and payable in full; or (b) require the payment, after the
date of such sale, lease, conveyance or transfer, of a higher rate of interest
on the unpaid principal portion of the Debt as a condition to not exercising
such option to accelerate the Debt, whether such rights be exercised by the
Beneficiary to obtain a higher rate of interest on the Debt or to protect the
security of mortgage. Notwithstanding anything to the contrary set forth in this
paragraph 10, the Mortgagor shall be permitted to convey the Real Estate and
Improvements to Roberts Realty Investors, Inc. in certain circumstances, as
described in Section 5.04 of the Loan Agreement.

                  11.      Defeasance. This deed of trust is made upon the
condition that if the Debt, as defined in this deed of trust, is paid in full,
and if the Mortgagor reimburses the Beneficiary and Trustee for any amounts the
Beneficiary and Trustee have paid in respect of Liens or insurance

                                       8

<PAGE>

premiums, and interest thereon, and fulfills all of its other obligations under
this deed of trust, this conveyance shall be null and void.

                  12.      Events of Default. The Mortgagor shall be deemed in
default hereunder upon the occurrence of any of the following events ("Events of
Default"): (a) if a default occurs under the terms of the Note or the Loan
Agreement between Mortgagor and Beneficiary dated of even date and such default
continues after any applicable notice and right to cure; or (b) if the interest
of the Beneficiary in any of the Property becomes endangered by reason of the
enforcement of any prior lien or encumbrance thereon; or (c) if any law is
passed imposing, or authorizing the imposition of, any specific tax upon this
deed of trust or the Debt or permitting or authorizing the deduction of any such
tax from the principal of, or interest on, the Debt, or by virtue of which any
tax, lien or assessment upon the Property shall be chargeable against the owner
of this deed of trust and the Mortgagor does not promptly pay such tax or
assessment; provided, however, that if the Mortgagor is prohibited by law from
so paying such tax or assessment, an Event of Default shall not be deemed to
have occurred hereunder unless the Mortgagor, within six (6) months from the
date such law is passed, has not paid the Debt in full.

                  13.      Rights and Remedies upon Default.

                  (a)      Acceleration of Debt. Upon the occurrence of an Event
of Default or at any time thereafter, the Beneficiary may at its option and with
notice to the Mortgagor, declare all or any part of the Debt immediately due and
payable, whereupon all such Debt shall forthwith become due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Mortgagor, and the Beneficiary may immediately
enforce payment of all such amounts and may exercise any or all of its rights
and remedies under this deed of trust, the Note and applicable law. The
Mortgagor also waives any and all rights the Mortgagor may have to a hearing
before any judicial authority prior to the exercise by the Beneficiary of any of
its rights under this deed of trust, the Note, and applicable law.

                  (b)      Access to Property; Operation of Property by
Beneficiary. Upon the occurrence of an Event of Default or at any time
thereafter, in addition to all other rights herein conferred on the Beneficiary,
the Beneficiary (or any person, firm or corporation designated by the
Beneficiary) may, but will not be obligated to, enter upon and without taking
possession thereof, inspect or cause to be inspected, the Property, including
testing for hazardous substances, and/or to take possession of any or all of the
Property, exclude the Mortgagor therefrom, and hold, use, administer, manage and
operate the same to the extent that the Mortgagor could do so, without any
liability to the Mortgagor resulting therefrom; and the Beneficiary may collect,
receive and receipt for all proceeds accruing from such operation and
management, make repairs and purchase needed additional property, and exercise
every power, right and privilege of the Mortgagor with respect to the Property.

                  (c)      Judicial Proceedings; Right to Receiver. Upon the
occurrence of an Event of Default or at any other time thereafter the
Beneficiary, in lieu of, or in addition to, exercising the power of sale
hereinafter given, may proceed by suit by the Trustee to foreclose its lien on,
security interest in, and assignment of, the Property, to sue the Mortgagor for
damages on account of or

                                       9

<PAGE>

arising out of said default or breach, or for specific performance of any
provision contained herein, or to enforce any other appropriate legal or
equitable right or remedy. The Beneficiary shall be entitled, as a matter of
right, upon bill filed or other proper legal proceedings being commenced for the
foreclosure of this deed of trust, to the appointment by any competent court or
tribunal, without notice to the Mortgagor or any other party, of a receiver of
the rents, issues and profits of the Property, with power to lease and control
the Property and with such other powers as may be deemed necessary.

                  (d)      Foreclosure Sale. If the Mortgagor shall pay the Note
secured hereby in accordance with its terms, together with interest thereon, and
any renewals or extensions thereof in whole or in part, all other sums secured
hereby and shall comply with all of the covenants, terms and conditions of this
deed of trust then this conveyance shall be null and void and may be canceled of
record at the request and the expense of the Mortgagor. If, however, there shall
be any Event of Default, then, without further notice, it shall be lawful for
and the duty of the Trustee, upon request of the Beneficiary, to sell the land
herein conveyed at public auction for cash, after having first giving such
notice of hearing as to commencement of foreclosure proceedings and obtained
such findings or leave of court as may then be required by law and giving such
notice and advertising the time and place of such sale in such manner as may
then be provided by law, and upon such and any resales and upon compliance with
the law then relating to foreclosure proceedings under the power of sale to
convey title to the purchaser in as full and ample manner as the Trustee is
empowered. The Trustee shall be authorized to retain an attorney to represent
him in such proceedings.

         The proceeds of the sale shall after the Trustee retains his
commission, together with reasonable attorneys fees incurred by the Trustee in
such proceeding, be applied to the costs of sale, including, but not limited to,
costs of collection, taxes, assessments, costs of recording, service fees and
incidental expenditures, the amount due on the Note hereby secured and
advancements and other sums expended by the Beneficiary according to the
provisions hereof and otherwise as required by the existing law relating to
foreclosures. Notwithstanding any provision to the contrary in this deed of
trust, the Trustee's commission shall be limited to reasonable trustee's fees
actually incurred (based on the actual number of hours worked by Trustee, at
Trustee's usual and customary hourly rate then in effect) and Trustee's actual
out-of-pocket expenses, without regard to any statutory presumption. The
Beneficiary, its successors and assigns, may bid at any sale or sales had under
the terms of this deed of trust and may purchase the Property, or any part
thereof, if the highest bidder therefor. The purchaser at any such sale or sales
shall be under no obligation to see to the proper application of the purchase
money. At any foreclosure sale, any part or all of the Property, real, personal
or mixed, may be offered for sale in parcels or en masse for one total price,
the proceeds of any such sale en masse to be accounted for in one account
without distinction between the items included therein or without assigning to
them any proportion of such proceeds, the Mortgagor hereby waiving the
application of any doctrine of marshalling or like proceeding. In case the
Beneficiary, in the exercise of the power of sale herein given, elects to sell
the Property in parts or parcels, sales thereof may be held from time to time,
and the power of sale granted herein shall not be fully exercised until all of
the Property not previously sold shall have been sold or all the Debt secured
hereby shall have been paid in full.

                                       10

<PAGE>

                  (e)      Personal Property and Fixtures. Upon the occurrence
of an Event of Default or at any time thereafter, the Beneficiary shall have and
may exercise with respect to the Personal Property and fixtures included in the
Property (the "Collateral") all rights, remedies and powers of a secured party
under the North Carolina Uniform Commercial Code with reference to the
Collateral or any other items in which a security interest has been granted
herein, including, without limitation, the right and power to sell at public or
private sale or sales or otherwise dispose of, lease or utilize the Collateral
and any part or parts thereof in any manner to the fullest extent authorized or
permitted under the North Carolina Uniform Commercial Code after default
hereunder, without regard to preservation of the Collateral or its value and
without the necessity of a court order. The Beneficiary shall have, among other
rights, the right to take possession of the Collateral and to enter upon any
premises where the same may be situated for the purpose of repossessing the same
without being guilty of trespass and without liability for damages occasioned
thereby and to take any action deemed appropriate or desirable by the
Beneficiary; at its option and its sole discretion, to repair, restore or
otherwise prepare the Collateral for sale, lease or other use or disposition. At
the Beneficiary's request, the Mortgagor shall assemble the Collateral and make
the Collateral available to the Beneficiary at any place designated by the
Beneficiary. To the extent permitted by law, the Mortgagor expressly waives any
notice of sale or any other disposition of the Collateral and any rights or
remedies of the Beneficiary with respect to, and the formalities prescribed by
law relative to, the sale or disposition of the Collateral or to the exercise of
any other right or remedy of the Beneficiary existing after default. To the
extent that such notice is required and cannot be waived, the Mortgagor agrees
that if such notice is given to the Mortgagor in accordance with the provisions
of paragraph 26 below, at least five (5) days before the time of the sale or
other disposition, such notice shall be deemed reasonable and shall fully
satisfy any requirement for giving said notice.

                  The Mortgagor agrees that the Beneficiary through the Trustee
may proceed to sell or dispose of both the real and personal property comprising
the Property in accordance with the rights and remedies granted under this deed
of trust with respect to the real property covered hereby. The Mortgagor hereby
grants the Trustee the right, at its option after default hereunder, to transfer
at any time to itself or its nominee the Collateral or any part thereof and to
receive the monies, income, proceeds and benefits attributable to the same and
to hold the same as Collateral or to apply it on the Debt in such order and
amounts and manner as the Beneficiary may elect. The Mortgagor covenants and
agrees that all recitals in any instrument transferring, assigning, leasing or
making other disposition of the Collateral or any part thereof shall be full
proof of the matters stated therein and no other proof shall be required to
establish the legal propriety of the sale or other action taken by the
Beneficiary and that all prerequisites of sale shall be presumed conclusively to
have been performed or to have occurred.

                  (f)      Rents and Leases. Upon the occurrence of an Event of
Default or at any time thereafter:

                  (i)      The Trustee, at the option of the Beneficiary, shall
have the right, power and authority to exercise and enforce any or all of the
following rights and remedies with respect to Rents and Leases:

                                       11

<PAGE>

                  (A) to terminate automatically, without the necessity of
         taking any action, the license granted to the Mortgagor in Granting
         Clause C(iii) hereof to collect the Rents, and, without taking
         possession, in the Trustee's own name to demand, collect, receive, sue
         for, attach and levy the Rents, to give proper receipts, releases and
         acquittances therefor, and after deducting all necessary and reasonable
         costs and expenses of collection, including reasonable attorney's fees,
         to apply the net proceeds thereof to the Debt in such order and amounts
         as the Beneficiary may choose (or hold the same in a reserve as
         security for the Debt);

                  (B) without regard to the adequacy of the security, with or
         without any action or proceeding, through any person or by agent, or by
         a receiver to be appointed by court, to enter upon, take possession of,
         manage and operate the Property or any part thereof for the account of
         the Mortgagor, make, modify, enforce, cancel or accept surrender of any
         Lease, remove and evict any lessee or sublessee, increase or reduce
         rents, decorate, clean and make repairs, and otherwise do any act or
         incur any cost or expenses the Trustee or Beneficiary shall deem proper
         to protect the security hereof, as fully and to the same extent as the
         Mortgagor could do if in possession, and in such event to apply any
         funds so collected to the operation and management of the Property
         (including payment of reasonable management, brokerage and attorney's
         fees) and payment of the Debt in such order and amounts as the
         Beneficiary may choose (or hold the same in reserve as security for the
         Debt); and

                  (C) to take whatever legal proceedings may appear necessary or
         desirable to enforce any obligation or covenant or agreement of the
         Mortgagor under this deed of trust.

                  (ii) The collection of the Rents and application thereof (or
         holding thereof in reserve) as aforesaid or the entry upon and taking
         possession of the Property or both shall not cure or waive any default
         or waive, modify or affect any notice of default under this deed of
         trust, or invalidate any act done pursuant to such notice, and the
         enforcement of such right or remedy by the Trustee or Beneficiary, once
         exercised, shall continue for so long as the Trustee or Beneficiary
         shall elect, notwithstanding that the collection and application
         aforesaid of the Rents may have cured the original default. If the
         Beneficiary shall thereafter elect to discontinue the exercise of any
         such right or remedy, the same or any other right or remedy hereunder
         may be reasserted at any time and from time to time following any
         subsequent default.

                  (g)      Application of Proceeds. All payments received by the
Beneficiary as proceeds of the Property, or any part thereof, as well as any and
all amounts realized by the Beneficiary in connection with the enforcement of
any right or remedy under or with respect to this deed of trust, shall be
applied by the Beneficiary as follows: (i) to the payment of all necessary
expenses incident to the execution of any foreclosure sale or sales or other
remedies under this deed of trust, including reasonable attorneys' fees as
provided herein and in the Note, (ii) to the payment in full of any of the Debt
that is then due and payable (including without limitation principal, accrued
interest and all other sums secured hereby) and to the payment of attorneys'
fees as provided herein and in the Note, (iii) to a cash collateral reserve fund
to be held by the Beneficiary in an amount equal to, and as security for, any of
the Debt that is not then due and payable, and (iv) the remainder, if any, shall
be paid to the Mortgagor or such other person or persons as may be entitled
thereto by law, after deducting therefrom the cost of ascertaining their
identity.

                                       12

<PAGE>

                  (h)      Multiple Sales. Upon the occurrence of an Event of
Default or at any time thereafter, the Beneficiary shall have the option to
proceed with foreclosure, either through the courts or by proceeding with
foreclosure as provided for in this deed of trust, but without declaring the
whole Debt due. Any such sale may be made subject to the unmatured part of the
Debt secured by this deed of trust, and such sale, if so made, shall not in any
manner affect the unmatured part of the Debt secured by this deed of trust, but
as to such unmatured part of the Debt this deed of trust shall remain in full
force and effect as though no sale had been made under the provisions of this
paragraph. Several sales may be made under the provisions of this paragraph
without exhausting the right of sale for any remaining part of the Debt whether
then matured or unmatured, the purpose hereof being to provide for a foreclosure
and sale of the Property for any matured part of the Debt without exhausting any
power of foreclosure and the power to sell the Property for any other part of
the Debt, whether matured at the time or subsequently maturing.

                  (i)      Waiver of Appraisement Laws. The Mortgagor waives, to
the fullest extent permitted by law, the benefit of all laws now existing or
hereafter enacted providing for (i) any appraisement before sale of any portion
of the Property (commonly known as appraisement laws), or (ii) any extension of
time for the enforcement of the collection of the Debt or any creation or
extension of a period of redemption from any sale made in collecting the Debt
(commonly known as stay laws and redemption laws).

                  (j)      Prerequisites of Sales. In case of any sale of the
Property as authorized by this paragraph 13, all prerequisites to the sale shall
be presumed to have been performed, and in any conveyance given hereunder all
statements of facts, or other recitals therein made, as to the nonpayment of any
of the Debt or as to the advertisement of sale, or the time, place and manner of
sale, or as to any other fact or thing, shall be taken in all courts of law or
equity as prima facie evidence that the facts so stated or recited are true.

                  14.      Collection Costs. The Mortgagor agrees to pay all
costs, including reasonable attorneys' fees, incurred by the Trustee and
Beneficiary in collecting or securing, or attempting to collect or secure, the
Debt, or any part thereof, or in defending or attempting to defend the priority
of this deed of trust against any Lien on the Property, unless this deed of
trust is herein expressly made subject to any such Lien; and/or all costs
incurred in the foreclosure of this deed of trust, either under the power of
sale contained herein, or by virtue of the decree of any court of competent
jurisdiction. The full amount of such costs incurred by the Trustee and
Beneficiary shall be a part of the Debt and shall be secured by this deed of
trust.

                  15.      No Obligations with Respect to Leases. Neither the
Trustee nor Beneficiary shall by virtue of this deed of trust or otherwise
assume any duties, responsibilities, liabilities or obligations with respect to
Leases, the Improvements, the Personal Property, the Real Estate or any of the
other Property (unless expressly assumed by the Trustee or Beneficiary under a
separate agreement in writing), and this deed of trust shall not be deemed to
confer on the Trustee or Beneficiary any duties or obligations that would make
the Trustee or Beneficiary directly or derivatively liable for any person's
negligent, reckless or wilful conduct. The Mortgagor agrees to defend, indemnify
and save harmless the Trustee and Beneficiary from and against any and all
claims, causes of action and judgments relating to the Mortgagor's performance
of its duties,

                                       13

<PAGE>

responsibilities and obligations under Leases and with respect to the Real
Estate, the Improvements, the Personal Property, or any of the other Property,
except as such claims, causes of action and judgments are caused solely by the
gross negligence or willful misconduct of the Beneficiary or the Trustee.

                  16.      Construction of Deed of Trust. This deed of trust is
and may be construed as a deed of trust, mortgage, conveyance, assignment,
security agreement, pledge, financing statement, hypothecation or contract, or
any one or more of them, in order fully to effectuate the lien hereof and the
assignment and security interest created hereby and the purposes and agreements
herein set forth.

                  17.      Successors and Assigns. All covenants and agreements
herein made by the undersigned shall bind the undersigned and the successors and
assigns of the undersigned; and every option, right and privilege herein
reserved or secured to the Trustee and the Beneficiary shall inure to the
benefit of the Trustee's and Beneficiary's respective heirs, successors and
assigns.

                  18.      Waiver and Election. The exercise by the Beneficiary
of any option given under the terms of this deed of trust shall not be
considered as a waiver of the right to exercise any other option given herein,
and the filing of a suit to foreclose the lien, security interest and assignment
granted by this deed of trust, either on any matured portion of the Debt or for
the whole of the Debt, shall not be considered an election so as to preclude
foreclosure under power of sale after a dismissal of the suit; nor shall the
publication of notices for foreclosure preclude the prosecution of a later suit
thereon. No failure or delay on the part of the Beneficiary in exercising any
right, power or remedy under this deed of trust shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder or thereunder. The remedies provided in
this deed of trust are cumulative and not exclusive of any remedies provided by
law. No amendment, modification, termination or waiver of any provisions of this
deed of trust, nor consent to any departure by the Mortgagor therefrom, shall be
effective unless the same shall be in writing and signed by an executive officer
of the Beneficiary, and then such waiver or consent shall be effective only in
this specific instance and for the specific purpose for which given. No notice
to, or demand on, the Mortgagor in any case shall entitle the Mortgagor to any
other or further notice or demand in similar or other circumstances.

                  19.      Landlord-Tenant Relationship. Any sale of the
Property under this deed of trust shall, without further notice, create the
relationship of landlord and tenant at sufferance between the purchaser and the
Mortgagor.

                  20.      Enforceability. If any provision of this deed of
trust is now or at any time hereafter becomes invalid or unenforceable, the
other provisions hereof shall remain in full force and effect, and the remaining
provisions hereof shall be construed in favor of the Beneficiary to effectuate
the provisions hereof.

                  21.      Application of Payments. If the lien, assignment or
security interest created by this deed of trust is invalid or unenforceable as
to any part of the Debt or is invalid or unenforceable as to any part of the
Property, the unsecured or partially secured portion of the Debt

                                       14

<PAGE>

shall be completely paid prior to the payment of the remaining and secured or
partially secured portion of the Debt, and all payments made on the Debt,
whether voluntary or under foreclosure or other enforcement action or
procedures, shall be considered to have been first paid on, and applied to, the
full payment of that portion of the Debt which is not secured or not fully
secured by said lien, assignment or security interest created hereby.

                  22.      Meaning of Particular Terms. Whenever used, the
singular number shall include the plural and the plural the singular, and
pronouns of one gender shall include all genders; and the words "Mortgagor",
"Trustee" and "Beneficiary" shall include their respective successors and
assigns. Plural or singular words used herein to designate the undersigned shall
be construed to refer to the maker or makers of this instrument, whether one or
more natural persons, corporations, associations, partnerships or other
entities.

                  23.      Advances by the Beneficiary. If the Mortgagor shall
fail to comply with the provisions hereof with respect to the securing of
insurance, the payment of Liens, the keeping of the Property in repair, the
performance of the Mortgagor's obligations under any Lease, the payment of any
prior deeds of trust, or the performance of any other term or covenant herein
contained, the Beneficiary may (but shall not be required to) make advances to
perform the same, and where necessary enter the Property for the purpose of
performing any such term or covenant. The Mortgagor agrees to repay all such
sums advanced upon demand, with interest from the date such advances are made,
at the rate provided for in the Note, or the highest rate permitted by law,
whichever shall be less, and all sums so advanced with interest shall be a part
of the Debt and shall be secured hereby. The making of any such advances shall
not be construed as a waiver by the Beneficiary of any Event of Default
resulting from the Mortgagor's failure to pay the amounts paid.

                  24.      Release or Extension by the Beneficiary. The
Beneficiary, without notice to the Mortgagor and without in any way affecting
the rights of the Beneficiary hereunder as to any part of the Property not
expressly released, may release any part of the Property or any person liable
for any of the Debt and may agree with any party with an interest in the
Property to extend the time for payment of all or any part of the Debt or to
waive the prompt and full performance of any term, condition or covenant of the
Note, this deed of trust or any other instrument evidencing or securing the
Debt.

                  25.      Partial Payments. Acceptance by the Beneficiary of
any payment of less than the full amount due on the Debt shall be deemed
acceptance on account only, and the failure of the Mortgagor to pay the entire
amount then due shall be and continue to constitute an Event of Default, and at
any time thereafter and until the entire amount due on the Debt has been paid,
the Beneficiary shall be entitled to exercise all rights conferred on it by the
terms of this deed of trust in case of the occurrence of an Event of Default.

                  26.      Addresses for Notices. All notices, requests, demands
and other communications provided for hereunder shall be delivered to the
applicable party in accordance with the notice provision set forth in Section
7.01 of the Loan Agreement.

                                       15

<PAGE>

                  27.      Titles. All section, paragraph, subparagraph or other
titles contained in this deed of trust are for reference purposes only, and this
deed of trust shall be construed without reference to said titles.

                  28.      Substitution of Trustee. If the individual herein
named as Trustee shall die, become incapable of acting, renounce his trust, or
should Beneficiary, its successors or assigns, for any reason desire to
substitute the Trustee herein named (or substitute for any of his successors),
then the Beneficiary, its successors or assigns shall have the right to appoint
successor Trustee(s) by instrument in writing, duly acknowledged so as to
entitle the same to record in this State, and the individual or individuals
named as new Trustee, immediately upon recordation of the written substitution
of trustee instrument in the Mecklenburg County Public Registry, shall become
successor to the title to the said property, and said successor(s) shall become
vested with the title in trust for the uses and purposes herein conferred on
Trustee in the same manner and with the same effect as though said individual(s)
were named herein as Trustee.

                                       16

<PAGE>

                  IN TESTIMONY WHEREOF, the undersigned has caused this
instrument to be executed by its sole general partner and its seal affixed as of
this the day and year first above written.

                                    ROBERTS PROPERTIES RESIDENTIAL, L.P.,
                                    a Georgia limited partnership authorized to
                                    do business in North Carolina as Roberts
                                    Properties Residential, Limited Partnership

                                    By: Roberts Realty Investors, Inc., a
                                        Georgia corporation, sole general
                                        partner

                                        By: /s/ Charles R. Elliott
                                           -------------------------------------
                                           Charles R. Elliott, Secretary and
                                           Treasurer

STATE OF GEORGIA  )

FULTON COUNTY     )

         I, the undersigned, a Notary Public, do hereby certify that Charles R.
Elliott personally appeared before me this day and who being by me first duly
sworn, acknowledged the due execution of the foregoing instrument as Secretary
and Treasurer of Roberts Realty Investors, Inc., the sole general partner of
Roberts Properties Residential, L.P., a Georgia limited partnership authorized
to do business in North Carolina as Roberts Properties Residential, Limited
Partnership, and that the foregoing instrument was signed and sealed by him, on
behalf of said corporation all by authority duly given and additionally, he
acknowledged the foregoing instrument to be the act and deed of the corporation,
acting in its capacity as sole general partner of said limited partnership.

         Witness my hand and notarial seal this 19th day of February, 2002.

                                       /s/ Abigail M. Carmichael
                                       -----------------------------------------
                                       Notary Public

AFFIX SEAL

[SEAL]

My commission expires: June 17, 2005

                                       17

<PAGE>

                                    Exhibit A

                               [Legal Description]

The land, referred to in this Commitment is located in Mecklenburg County, State
of North Carolina, and more particularly described as follows:

Being all of the 23.757 acre tract designated as Parcel E on the plat recorded
in Map Book 29, Page 305 of the Mecklenburg County Public Registry.

TOGETHER WITH a non-exclusive right, title and interest in and to the easements
appurtenant to the above described tract described in that certain Reciprocal
Easement Agreement dated June 22, 1998 among Bissell Ballantyne, LLC, CMH-DWH
Ballantyne, LLC, MRI Ballantyne Limited Partnership and Roberts Properties
Residential, L.P., recorded in Book 9747, Page 862, Mecklenburg County Registry.

ALSO TOGETHER WITH the non-exclusive right, title and interest in and to the
easement appurtenant to the above described tract described in (1) ARTICLE II
"Property Rights" of the Declaration of Covenants, Conditions and Restrictions
for Ballantyne recorded in Book 7524, Page I, Mecklenburg County Registry, and
(2) ARTICLE III "Property Rights" of the Declaration of Covenants, Conditions
and Restrictions for Ballantyne Commons recorded in Book 9747, Page 777,
Mecklenburg County Registry.

<PAGE>

                                    EXHIBIT B
                                       TO
                        DEED OF TRUST, SECURITY AGREEMENT
                       AND ASSIGNMENT OF RENTS AND LEASES

                             [Permitted Exceptions]

1.       The lien of all taxes for the year 2002 and thereafter, which are not
         yet due and payable.

2.       Declaration of Covenants, Conditions and Restrictions for Ballantyne
         recorded in Book 7524, Page 1; modified in Book 8394, Page 699; amended
         in Book 8608, Page 809; and supplemented in Book 9845, Page 292,
         Mecklenburg County Registry.

3.       Easement to Duke Power Company recorded in Book 938, Page 227,
         Mecklenburg County Registry.

4.       Sewer/Water easements recorded in Book 8113, Page 294; Book 8323, Page
         116 and Book 8770, Page 931, Mecklenburg County Registry.

5.       Grant of Easement to First-Citizens Bank & Trust Company recorded in
         Book 8720, Page 920, Mecklenburg County Registry.

6.       Easement to NCDOT recorded in Book 7456, page 696 and right-of-way deed
         recorded in Book 7456, Page 699, Mecklenburg County Registry.

7.       Reciprocal Easement Agreement recorded in Book 9747, Page 862,
         Mecklenburg County Registry.

8.       Restrictive Covenant recorded in Book 9747, Page 891, Mecklenburg
         County Registry.

9.       Declaration of Covenants, Conditions and Restrictions for Ballantyne
         Commons recorded in Book 9747, Page 777, Mecklenburg County Registry.

10.      Building restriction lines, easements and any other facts as shown on
         Map or Plat recorded in Map Book 29, Page 305, Mecklenburg County
         Registry.

11.      Easement to BellSouth Telecommunications, Inc. recorded in Book 11695,
         Page 23, Mecklenburg County Registry.

12.      Easement to City of Charlotte recorded in Book 12316, page 365,
         Mecklenburg County Registry.

13.      Abandonment of Easement recorded in Book 10201, Page 637, Mecklenburg
         County Registry.

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