Document:

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                                                                 EXHIBIT 10.34.4

                THIS MORTGAGE IS SUBJECT TO ARBITRATION PURSUANT
           TO THE FEDERAL ARBITRATION ACT AND/OR Section 15-48-10 OF
               THE SOUTH CAROLINA CODE OF LAWS (1976), AS AMENDED

STATE OF SOUTH CAROLINA   )     MORTGAGE, ASSIGNMENT OF RENTS AND
                          )     LEASES, SECURITY AGREEMENT AND
COUNTY OF HORRY           )     FIXTURE FILING

      THE COLLATERAL SUBJECT TO THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
      SECURITY AGREEMENT AND FIXTURE FILING INCLUDES GOODS THAT ARE OR ARE TO
      BECOME FIXTURES.

      THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND
      FIXTURE FILING IS TO BE FILED IN THE REAL PROPERTY RECORDS FOR HORRY
      COUNTY, AND SHALL SERVE AS A FIXTURE FILING FINANCING STATEMENT

      THIS INSTRUMENT IS A CONSTRUCTION MORTGAGE WITHIN THE MEANING OF SECTION
      36-9-334(h) OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976 (Revised 2003), AS
      AMENDED, AND SECURES AN OBLIGATION INCURRED FOR THE CONSTRUCTION OF AN
      IMPROVEMENT UPON LAND.

            THE PROMISSORY NOTE (DEFINED BELOW) SECURED BY THIS INSTRUMENT
            PROVIDES FOR A VARIABLE RATE OF INTEREST ON THE SECURED INDEBTEDNESS
            (DEFINED BELOW).

(This Document Serves as a Fixture Filing under Section 36-9-502 of the South
Carolina Uniform Commercial Code.)

Mortgagor's Organizational Identification Number: 20-0785850

      THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND
FIXTURE FILING (this "Mortgage") is made this 27th day of April 2005, by GRANDE
PALMS, L.L.C., having a notice address 545 E. John Carpenter Freeway, Suite
1300, Irving, Texas 75062-3933 ("Mortgagor"), for the benefit of BANK OF
AMERICA, N.A., having a notice address at 200 Meeting Street, Suite 104,
Charleston, South Carolina 29401, as Administrative Agent under the Loan
Agreement on behalf of the Lenders (as defined in the Loan Agreement) (together
with its successors and assigns, "Mortgagee").

                                    ARTICLE 1

               Definitions: Granting Clauses; Secured Indebtedness

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      Section 1.1 Principal Secured. This Mortgage secures the aggregate
principal amount of Sixty-Nine Million, Eight Hundred Thousand and No/100
Dollars ($69,800,000.00) plus other obligations as provided herein and such
additional amounts as Mortgagee may from time to time advance pursuant to the
terms and conditions of this Mortgage or for the protection of the lien of this
Mortgage, together with interest thereon.

      Section 1.2 Definitions.

      (a) In addition to other terms defined herein, each of the following terms
shall have the meaning assigned to it, such definitions to be applicable equally
to the singular and the plural forms of such terms and to all genders:

      "Loan Agreement": That certain Construction Loan Agreement by and among
Mortgagor, as Borrower, Mortgagee, as Administrative Agent, and certain Lenders
described therein (the "Lenders").

      "Mortgagee": Bank of America, N.A. as Administrative Agent under the Loan
Agreement for the benefit of the Lender (as defined in the Loan Agreement), its
successors and assigns, whose place of business is 200 Meeting Street, Suite
104, Charleston, South Carolina 29401, Attention: Loan Administration Section,
Real Estate Banking Group, Location Code SC1300-01-03.

      "Mortgagor": Grande Palms, L.L.C., whose address is 545 E. John Carpenter
Freeway, Suite 1300, Irving, Texas 75062-3933 and its permitted successors and
assigns.

      "Promissory Note": means those certain promissory notes designated
"Promissory Note (Name of Lender)" dated of even date herewith made by Mortgagor
and payable to the order of particular Lenders in the aggregate principal face
amount of Sixty-Nine Million, Eight Hundred Thousand and No/100 Dollars
($69,800,000.00), each bearing interest as therein provided, containing a
provision for, among other things, the payment of attorneys' fees (such
promissory notes, as each may hereafter be renewed, extended, supplemented,
increased or modified and in effect from time to time, and all other notes given
in substitution therefor, or in modification, renewal, or extension thereof, in
whole or in part).

      "Swap Transaction": means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swap option currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any form of master agreement (the "Master Agreement") published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between Holder (or its affiliates) and Mortgagor,
together with any related schedules, as amended, supplemented, superseded or
replaced from time to time, relating to or governing any or all of the
foregoing.

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      (b) Any term used or defined in the South Carolina Uniform Commercial
Code, as in effect from time to time, and not defined in this Mortgage has the
meaning given to the term in the South Carolina Uniform Commercial Code, as in
effect from time to time, when used in this Mortgage; provided, however, if a
term is defined in Chapter 9 of the South Carolina Uniform Commercial Code
differently than in another chapter of the South Carolina Uniform Commercial
Code, the term has the meaning specified in Chapter 9.

      Section 1.3 Granting Clause. To secure and enforce the payment and
performance of the following promissory notes, obligations, indebtedness, duties
and liabilities and all renewals, extensions, supplements, increases and
modifications thereof in whole or in part from time to time (collectively, the
"Secured Indebtedness"): (A) the performance and observance by Mortgagor of all
covenants and conditions contained in the Promissory Note, and all other
promissory notes given in substitution therefor or in modification, supplement,
increase, renewal or extension thereof, in whole or in part (such promissory
note or promissory notes whether one or more, as from time to time renewed,
extended, supplemented, increased or modified, being hereinafter called the
"Note" and Mortgagee, or the subsequent holder at the time in question of the
Note or any of the Secured Indebtedness, as hereinafter defined, being herein
collectively called "Holder"), in this Mortgage, and in all other instruments
securing the Note; and (B) all indebtedness, liabilities, duties, covenants,
promises and other obligations whether joint or several, direct or indirect,
fixed or contingent, liquidated or unliquidated, and the collection of all such
amounts, owed by Mortgagor to Holder now or hereafter incurred or arising
pursuant to or permitted by the provisions of the Note, this Mortgage, or any
other document now or hereafter evidencing, governing, guaranteeing, securing or
otherwise executed in connection with the loan evidenced by the Note, including
but not limited to any loan or credit agreement, letter of credit or
reimbursement agreement, tri-party financing agreement, Master Agreement
relating to any Swap Transactions or other agreement between Mortgagor and
Holder, or among Mortgagor, Holder and any other party or parties, pertaining to
the repayment or use of the proceeds of the loan evidenced by the Note (the
Note, this Mortgage, any Master Agreement relating to any Swap Transactions and
such other documents, as they or any of them may have been or may be from time
to time renewed, extended, supplemented, increased or modified, being herein
sometimes collectively called the "Loan Documents"); (C) any and all other loans
made by Holder to Mortgagor and all other debts, obligations and liabilities of
Mortgagor of every kind and character now or hereafter existing in favor of
Holder, whether direct or indirect, primary or secondary, joint or several,
fixed or contingent, secured or unsecured, and whether originally payable to
Holder or to a third party and subsequently acquired by Holder, it being
contemplated that Mortgagor may hereafter become indebted to Holder for such
further debts, obligations and liabilities; provided, however, and
notwithstanding the foregoing provisions of this clause (c), this Mortgage shall
not secure any such other loan, advance, debt, obligation or liability with
respect to which Holder is by applicable law prohibited from obtaining a lien on
real estate nor shall this clause (c) operate or be effective to constitute or
require any assumption or payment by any person, in any way, of any debt of any
other person to the extent that the same would violate or exceed the limit
provided in any applicable usury or other law; and (D) also to secure in
accordance with Section 29-3-50, as amended, Code of Laws of South Carolina
1976, all future advances and readvances that may subsequently be made to
Mortgagor by the Holder, evidenced by the Note, or any other promissory notes,
and all renewals and extensions thereof-, provided, however, that nothing
contained herein shall create an obligation on the part of Holder to make

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future advances or readvances to Mortgagor, the maximum amount of all
indebtedness outstanding at any one time secured hereby not to exceed twice the
face amount of the Promissory Note, plus interest thereon, all charges and
expenses of collection incurred by Holder, including court costs, and reasonable
attorneys' fees; and (E) also in order to charge the properties, interests and
rights hereinafter described with such payment, performance and observance; and
(F) for and in consideration of the sum of One and No/100 ($1.00) Dollar paid by
Holder to Mortgagor this date, and for other valuable consideration, the receipt
of which is acknowledged, Mortgagor does hereby grant, bargain, sell, alien,
remise, release, convey, assign, transfer, mortgage, hypothecate, pledge,
deliver, set over, warrant and confirm unto Holder, its successors and assigns
forever all right, title and interest of Mortgagor in and to the following: (a)
the real property described in Exhibit A which is attached hereto and
incorporated herein by reference (the "Land") together with: (i) any and all
buildings, structures, improvements, alterations or appurtenances now or
hereafter situated or to be situated on the Land (collectively the
"Improvements"); and (ii) all right, title and interest of Mortgagor, now owned
or hereafter acquired, in and to (1) all streets, roads, alleys, easements,
rights-of-way, licenses, rights of ingress and egress, vehicle parking rights
and public places, existing or proposed, abutting, adjacent, used in connection
with or pertaining to the Land or the Improvements; (2) any strips or gores
between the Land and abutting or adjacent properties; (3) all options to
purchase the Land or the Improvements or any portion thereof or interest
therein, and any greater estate in the Land or the Improvements; and (4) all
water and water rights, timber, crops and mineral interests on or pertaining to
the Land (the Land, Improvements and other rights, titles and interests referred
to in this clause (a) being herein sometimes collectively called the
"Premises"); (b) all fixtures, equipment, systems, machinery, furniture,
furnishings, appliances, inventory, goods, building and construction materials,
supplies, and articles of personal property, of every kind and character,
tangible and intangible (including software embedded therein), now owned or
hereafter acquired by Mortgagor, which are now or hereafter attached to or
situated in, on or about the Land or the Improvements, or used in or necessary
to the complete and proper planning, development, use, occupancy or operation
thereof, or acquired (whether delivered to the Land or stored elsewhere) for use
or installation in or on the Land or the Improvements, and all renewals and
replacements of, substitutions for and additions to the foregoing (the
properties referred to in this clause (b) being herein sometimes collectively
called the "Accessories," all of which are hereby declared to be permanent
accessions to the Land); (c) all (i) plans and specifications for the
Improvements; (ii) Mortgagor's rights, but not liability for any breach by
Mortgagor, under all commitments (including any commitment for financing to pay
any of the Secured Indebtedness, as defined below), insurance policies, (or
additional or supplemental coverage related thereto, including from an insurance
provider meeting the requirements of the Loan Documents or from or through any
state or federal government sponsored program or entity), Swap Transactions (as
hereinbefore defined), contracts and agreements for the design, construction,
operation or inspection of the Improvements and other contracts and general
intangibles (including but not limited to payment intangibles, trademarks, trade
names, goodwill, software and symbols) related to the Premises or the
Accessories or the operation thereof; (iii) deposits and deposit accounts
arising from or related to any transactions related to the Premises or the
Accessories (including but not limited to Mortgagor's rights in tenants'
security deposits, deposits with respect to utility services to the Premises,
and any deposits, deposit accounts or reserves hereunder or under any other Loan
Documents for taxes, insurance or otherwise), rebates or refunds of impact fees
or other taxes, assessments or charges, money, accounts

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(including deposit accounts), instruments, documents, promissory notes and
chattel paper (whether tangible or electronic) arising from or by virtue of any
transactions related to the Premises or the Accessories and any account or
deposit account from which Mortgagor may from time to time authorize Holder to
debit and/or credit payments due with respect to the Loan or any Swap
Transaction, all rights to the payment of money from Holder under any Swap
Transaction, and all accounts, deposit accounts and general intangibles,
including payment intangibles, described in any Swap Transaction; (iv) permits,
licenses, franchises, certificates, development rights, commitments and rights
for utilities, and other rights and privileges obtained in connection with the
Premises or the Accessories; (v) leases, rents, royalties, bonuses, issues,
profits, revenues and other benefits of the Premises and the Accessories
(without derogation of Article 3 hereof); (vi) as-extracted collateral produced
from or allocated to the Land including, without limitation, oil, gas and other
hydrocarbons and other minerals and all products processed or obtained
therefrom, and the proceeds thereof, and (vii) engineering, accounting, title,
legal, and other technical or business data concerning the Property which are in
the possession of Mortgagor or in which Mortgagor can otherwise grant a security
interest; and (d) all (i) accounts and proceeds (cash or non-cash and including
payment intangibles) of or arising from the properties, rights, titles and
interests referred to above in this Section 1.3, including but not limited to
proceeds of any sale, lease or other disposition thereof, proceeds of each
policy of insurance (or additional or supplemental coverage related thereto,
including from an insurance provider meeting the requirements of the Loan
Documents or from or through any state or federal government sponsored program
or entity) relating thereto (including premium refunds), proceeds of the taking
thereof or of any rights appurtenant thereto, including change of grade of
streets, curb cuts or other rights of access, by condemnation, eminent domain or
transfer in lieu thereof for public or quasi-public use under any law, and
proceeds arising out of any damage thereto; (ii) all letter-of-credit rights
(whether or not the letter of credit is evidenced by a writing) Mortgagor now
has or hereafter acquires relating to the properties, rights, titles and
interests referred to in this Section 1.3; (iii) all commercial tort claims
Mortgagor now has or hereafter acquires relating to the properties, rights,
titles and interests referred to in this Section 1.3; and (iv) other interests
of every kind and character which Mortgagor now has or hereafter acquires in, to
or for the benefit of the properties, rights, titles and interests referred to
above in this Section 1.3 and all property used or useful in connection
therewith, including but not limited to rights of ingress and egress and
remainders, reversions and reversionary rights or interests; and if the estate
of Mortgagor in any of the property referred to above in this Section 1.3 is a
leasehold estate, this conveyance shall include, and the lien and security
interest created hereby shall encumber and extend to, all other or additional
title, estates, interests or rights which are now owned or may hereafter be
acquired by Mortgagor in or to the property demised under the lease creating the
leasehold estate; TO HAVE AND TO HOLD the foregoing rights, interests and
properties, together with all rights, estates, powers, privileges,
hereditaments, easements and appurtenances thereto (herein collectively called
the "Property") to the Holder and the Holder's successors and assigns to secure
the obligations of Grantor under the Note and Loan Documents and all other
indebtedness and matters defined as secured.

      Section 1.4 Security Interest. Mortgagor hereby grants to Holder a
security interest in all of the Property which constitutes personal property or
fixtures, all proceeds and products thereof, and all supporting obligations
ancillary to or arising in any way in connection therewith (herein sometimes
collectively called the "Collateral") to secure the obligations of Mortgagor

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under the Note and Loan Documents and all other indebtedness and matters defined
as Secured Indebtedness in Section 1.3 of this Mortgage. In addition to its
rights hereunder or otherwise, Holder shall have all of the rights of a secured
party under the South Carolina Uniform Commercial Code, as in effect from time
to time, or under the Uniform Commercial Code in force, from time to time, in
any other state to the extent the same is applicable law. It is intended that as
to the Collateral this Mortgage shall be effective as a financing statement
filed as a fixture filing from the date of its filing for record in the real
estate records of the county in which the Land is located. Information
concerning the security interest created by this instrument may be obtained from
the Holder as secured party or the Mortgagor as debtor at the addresses shown
herein.

                                    ARTICLE 2

                    Representations, Warranties and Covenants

      Section 2.1 Mortgagor represents, warrants, and covenants as follows:

      (a) Payment and Performance. Mortgagor will make due and punctual payment
of the Secured Indebtedness. Mortgagor will timely and properly perform and
comply with all of the covenants, agreements, and conditions imposed upon it by
this Mortgage and the other Loan Documents and will not permit a default to
occur hereunder or thereunder. Time shall be of the essence in this Mortgage.

      (b) Title and Permitted Encumbrances. Mortgagor has, in Mortgagor's own
right, and Mortgagor covenants to maintain, lawful, good and marketable title to
the Property, is lawfully seized and possessed of the Property and every part
thereof, and has the right to convey the same, free and clear of all liens,
charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Encumbrances" in Exhibit
B hereto, which are Permitted Encumbrances only to the extent the same are valid
and subsisting and affect the Property, (ii) the liens and security interests
evidenced by this Mortgage, (iii) statutory liens for real estate taxes and
assessments on the Property which are not yet due and payable, and (iv) other
liens and security interests (if any) in favor of Mortgagee (the matters
described in the foregoing clauses (i), (ii), (iii) and (iv) being herein called
the "Permitted Encumbrances"). Mortgagor, and Mortgagor's successors and
assigns, will warrant generally and forever defend title to the Property,
subject as aforesaid, to Holder and its successors or substitutes and assigns,
against the claims and demands of all persons claiming or to claim the same or
any part thereof. Mortgagor will punctually pay, perform, observe and keep all
covenants, obligations and conditions in or pursuant to any Permitted
Encumbrance and will not modify or permit modification of any Permitted
Encumbrance without the prior written consent of Holder. Inclusion of any matter
as a Permitted Encumbrance does not constitute approval or waiver by Holder of
any existing or future violation or other breach thereof by Mortgagor, by the
Property or otherwise. No part of the Property constitutes all or any part of
the principal residence of Mortgagor if Mortgagor is an individual. If any right
or interest of Holder in the Property or any part thereof shall be endangered or
questioned or shall be attacked directly or indirectly, Holder (whether or not
named as party to legal proceedings with respect thereto), is hereby authorized
and empowered to take such steps as in its discretion may be proper for the
defense of any such legal proceedings or the protection of such right or
interest of Holder, including but not limited

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to the employment of independent counsel, the prosecution or defense of
litigation, and the compromise or discharge of adverse claims. All expenditures
so made of every kind and character shall be a demand obligation (which
obligation Mortgagor hereby promises to pay) owing by Mortgagor to Holder, and
the Holder shall be subrogated to all rights of the person receiving such
payment.

      (c) Taxes and Other Impositions. Mortgagor will pay, or cause to be paid,
all taxes, assessments and other charges or levies imposed upon or against or
with respect to the Property or the ownership, use, occupancy or enjoyment of
any portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all real estate taxes assessed against the
Property or any part thereof, and shall deliver promptly to Holder such evidence
of the payment thereof as Holder may require.

      (d) Insurance. Mortgagor shall obtain and maintain at Mortgagor's sole
expense: (1) mortgagee title insurance issued to Holder covering the Premises as
required by Holder without exception for mechanics' liens; (2) property
insurance with respect to all insurable Property, against loss or damage by
fire, lightning, windstorm, explosion, hail, tornado and such additional hazards
as are presently included in "Special Form" (also known as "all-risk") coverage
and such other insurable hazards as Holder may require (provided, however, that
Administrative Agent has waived the requirement for insurance covering loss from
terrorist acts to the extent such coverage is unavailable without payment of an
additional premium amount), in an amount not less than 100% of the full
replacement cost, including the cost of debris removal, without deduction for
depreciation and sufficient to prevent Mortgagor and Holder from becoming a
coinsurer, such insurance to be in "builder's risk" completed value
(non-reporting) form during and with respect to any construction on the
Premises; (3) if and to the extent any portion of the Improvements is, under the
Flood Disaster Protection Act of 1973 ("FDPA"), as it may be amended from time
to time, in a Special Flood Hazard Area, within a Flood Zone designated A or V
in a participating community, a flood insurance policy in an amount required by
Holder, but in no event less than the amount sufficient to meet the requirements
of applicable law and the FDPA, as such requirements may from time to time be in
effect; (4) general liability insurance, on an "occurrence" basis, against
claims for "personal injury" liability, including bodily injury, death or
property damage liability, for the benefit of Mortgagor as named insured and
Holder as additional insured; (5) statutory workers' compensation insurance with
respect to any work on or about the Premises (including employer's liability
insurance, if required by Holder), covering all employees of Mortgagor and any
contractor; (6) if there is a general contractor, commercial general liability
insurance, including products and completed operations coverage, and in other
respects similar to that described in clause (4) above, for the benefit of the
general contractor as named insured and Mortgagor and Holder as additional
insureds, in addition to statutory workers' compensation insurance with respect
to any work on or about the Premises (including employer's liability insurance,
if required by Holder), covering all employees of the general contractor and any
contractor; and (7) such other insurance on the Property and endorsements as may
from time to time be required by Holder (including but not limited to soft cost
coverage, automobile liability insurance, business interruption insurance or
delayed rental insurance, boiler and machinery insurance, earthquake insurance,
wind insurance, sinkhole coverage, and/or permit to occupy endorsement) and
against other insurable hazards or casualties which at the time are commonly
insured against in the case of premises similarly situated, due regard being
given to

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the height, type, construction, location, use and occupancy of buildings and
improvements. All insurance policies shall be issued and maintained by insurers,
in amounts, with deductibles, limits and retentions, and in forms satisfactory
to Holder, and shall require not less than ten (10) days' prior written notice
to Holder of any cancellation for nonpayment of premiums, and not less than
thirty (30) days' prior written notice to Holder of any other cancellation or
any change of coverage. All insurance companies must be licensed to do business
in the state in which the Property is located and must have an A.M. Best Company
financial and performance ratings of A-:IX or better. All insurance policies
maintained, or caused to be maintained, by Mortgagor with respect to the
Property, except for general liability insurance, shall provide that each such
policy shall be primary without right of contribution from any other insurance
that may be carried by Mortgagor or Holder and that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured. If any insurer which has
issued a policy of title, hazard, liability or other insurance required pursuant
to this Mortgage or any other Loan Document becomes insolvent or the subject of
any petition, case, proceeding or other action pursuant to any Debtor Relief
Law, or if in Holder's reasonable opinion the financial responsibility of such
insurer is or becomes inadequate, Mortgagor shall, in each instance promptly
upon its discovery thereof or upon the request of Holder therefor, and at
Mortgagor's expense, promptly obtain and deliver to Holder a like policy (or, if
and to the extent permitted by Holder, acceptable evidence of insurance) issued
by another insurer, which insurer and policy meet the requirements of this
Mortgage or such other Loan Document, as the case may be. Without limiting the
discretion of Holder with respect to required endorsements to insurance
policies, all such policies for loss of or damage to the Property shall contain
a standard mortgagee clause (without contribution) naming Holder as mortgagee
with loss proceeds payable to Holder notwithstanding (i) any act, failure to act
or negligence of or violation of any warranty, declaration or condition
contained in any such policy by any named or additional insured; (ii) the
occupation or use of the Property for purposes more hazardous than permitted by
the terms of any such policy; (iii) any foreclosure or other action by Holder
under the Loan Documents; or (iv) any change in title to or ownership of the
Property or any portion thereof, such proceeds to be held for application as
provided in the Loan Documents. The originals of each initial insurance policy
(or to the extent permitted by Holder, a copy of the original policy and such
evidence of insurance acceptable to Holder) shall be delivered to Holder at the
time of execution of this Mortgage, with all premiums fully paid current, and
each renewal or substitute policy (or evidence of insurance) shall be delivered
to Holder, with a-11 premiums fully paid current, at least ten (10) days before
the termination of the policy it renews or replaces. Mortgagor shall pay all
premiums on policies required hereunder as they become due and payable and
promptly deliver to Holder evidence satisfactory to Holder of the timely payment
thereof. If any loss occurs at any time when Mortgagor has failed to perform
Mortgagor's covenants and agreements in this paragraph with respect to any
insurance payable because of loss sustained to any part of the Property whether
or not such insurance is required by Holder, Holder shall nevertheless be
entitled to the benefit of all insurance covering the loss and held by or for
Mortgagor, to the same extent as if it had been made payable to Holder. Upon any
foreclosure hereof or transfer of title to the Property in extinguishment of the
whole or any part of the Secured Indebtedness, all of Mortgagor's right, title
and interest in and to the insurance policies referred to in this Section
(including unearned premiums) and all proceeds payable thereunder shall
thereupon vest in the purchaser at foreclosure or other such transferee, to the
extent permissible under such policies. Holder shall have the right (but not the
obligation) to

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make proof of loss for, settle and adjust any claim under, and receive the
proceeds of, all insurance for loss of or damage to the Property regardless of
whether or not such insurance policies are required by Holder, and the expenses
incurred by Holder in the adjustment and collection of insurance proceeds shall
be a part of the Secured Indebtedness and shall be due and payable to Holder on
demand. Holder shall not be, under any circumstances, liable or responsible for
failure to collect or exercise diligence in the collection of any of such
proceeds or for the obtaining, maintaining or adequacy of any insurance or for
failure to see to the proper application of any amount paid over to Mortgagor.
Any such proceeds received by Holder shall, after deduction therefrom of all
reasonable expenses actually incurred by Holder, including attorneys' fees, at
Holder's option be (1) released to Mortgagor, or (2) applied (upon compliance
with such terms and conditions as may be required by Holder) to repair or
restoration, either partly or entirely, of the Property so damaged, or (3)
applied to the payment of the Secured Indebtedness in such order and manner as
Holder, in its sole discretion, may elect, whether or not due. In any event, the
unpaid portion of the Secured Indebtedness shall remain in full force and effect
and the payment thereof shall not be excused. Mortgagor shall at all times
comply with the requirements of the insurance policies required hereunder and of
the issuers of such policies and of any board of fire underwriters or similar
body as applicable to or affecting the Property.

      (e) Reserved.

      (f) Condemnation. Mortgagor shall notify Holder immediately of any
threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Mortgagor shall, at Mortgagor's
expense, diligently prosecute any such proceedings. Holder shall have the right
(but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Holder shall be entitled to receive
all sums which may be awarded or become payable to Mortgagor for the
condemnation of the Property, or any part thereof, for public or quasi-public
use, or by virtue of private sale in lieu thereof, and any. sums which may be
awarded or become payable to Mortgagor for injury or damage to the Property.
Mortgagor shall, promptly upon request of Holder, execute such additional
assignments and other documents as may be necessary from time to time to permit
such participation and to enable Holder to collect and receipt for any such
sums. All such sums are hereby assigned to Holder, and shall, after deduction
therefrom of all reasonable expenses actually incurred by Holder, including
attorneys' fees, at Holder's option be (1) released to Mortgagor, or (2) applied
(upon compliance with such terms and conditions as may be required by Holder) to
repair or restoration of the Property so affected, or (3) applied to the payment
of the Secured Indebtedness in such order and manner as Holder, in its sole
discretion, may elect, whether or not due. In any event the unpaid portion of
the Secured Indebtedness shall remain in full force and effect and the payment
thereof shall not be excused. Holder shall not be, under any circumstances,
liable or responsible for failure to collect or to exercise diligence in the
collection of any such sum or for failure to see to the proper application of
any amount paid over to Mortgagor. Holder is hereby authorized, in the name of
Mortgagor, to execute and deliver valid acquittances for, and to appeal from,
any such award, judgment or decree. All costs and expenses (including but not
limited to attorneys' fees) incurred by Holder in connection with any
condemnation shall be a demand obligation owing by Mortgagor (which Mortgagor
hereby promises to pay) to Holder pursuant to this Mortgage.

                                       9
<PAGE>

      (g) Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at all
times comply with all applicable Legal Requirements (hereinafter defined). The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement. Mortgagor shall not, by act or omission, permit any
building or other improvement not subject to the lien of this Mortgage to rely
on the Property or any interest therein to fulfill any requirement of any Legal
Requirement. No improvement upon or use of any part of the Property constitutes
a nonconforming use under any zoning law or similar law or ordinance. Mortgagor
has obtained and shall preserve in force all requisite zoning, utility,
building, health, environmental and operating permits from the governmental
authorities having jurisdiction over the Property.

If Mortgagor receives a notice or claim from any person that the Property, or
any use, activity, operation or maintenance thereof or thereon, is not in
compliance with any Legal Requirement, Mortgagor will promptly furnish a copy of
such notice or claim to Holder. As of the date of this Mortgage, Mortgagor has
received no notice and has no knowledge of any such noncompliance. As used in
this Mortgage: (1) the term "Legal Requirement" means any Law (hereinafter
defined), agreement, covenant, restriction, easement or condition (including,
without limitation of the foregoing, any condition or requirement imposed by any
insurance or surety company), as any of the same now exists or may be changed or
amended or come into effect in the future; and (ii) the term "Law" means any
federal, state or local law, statute, ordinance, code, rule, regulation,
license, permit, authorization, decision, order, injunction or decree, domestic
or foreign.

      (h) Maintenance, Repair and Restoration. Mortgagor will keep the Property
in first class order, repair, operating condition and appearance, causing all
necessary repairs, renewals, replacements, additions and improvements to be
promptly made, and will not allow any of the Property to be misused, abused or
wasted or to deteriorate. Notwithstanding the foregoing, Mortgagor will not,
without the prior written consent of Holder, (1) remove from the Property any
fixtures or personal property encumbered by this Mortgage except such as is
replaced by Mortgagor by an article of equal suitability and value, owned by
Mortgagor, free and clear of any lien or security interest (except that created
by this Mortgage), or (ii) make any structural alteration to the Property or any
other alteration thereto which impairs the value thereof. If any act or
occurrence of any kind or nature (including any condemnation or any casualty for
which insurance was not obtained or obtainable) shall result in damage to or
loss or destruction of the Property, Mortgagor shall give prompt notice thereof
to Holder and Mortgagor shall promptly, at Mortgagor's sole cost and expense and
regardless of whether insurance or condemnation proceeds (if any) shall be
available or sufficient for the purpose, secure the Property as necessary and
commence and continue diligently to completion to restore, repair, replace and
rebuild the Property as nearly as possible to its value, condition and character
immediately prior to the damage, loss or destruction.

      (i) No Other Liens. Mortgagor will not, without the prior written consent
of Holder, create, place or permit to be created or placed, or through any act
or failure to act, acquiesce in the placing of, or allow to remain, any
mortgage, voluntary or involuntary lien, whether statutory, constitutional or
contractual, security interest, encumbrance or charge, or conditional sale or
other title retention document, against or covering the Property, or any part
thereof, other

                                       10
<PAGE>

than the Permitted Encumbrances, regardless of whether the same are expressly or
otherwise subordinate to the lien or security interest created in this Mortgage,
and should any of the foregoing become attached hereafter in any manner to any
part of the Property without the prior written consent of Holder, Mortgagor will
cause the same to be promptly discharged and released. Mortgagor will own all
parts of the Property and will not acquire any fixtures, equipment or other
property (including software embedded therein) forming a part of the Property
pursuant to a lease, license, security agreement or similar agreement, whereby
any party has or may obtain the right to repossess or remove same, without the
prior written consent of Holder. If Holder consents to the voluntary grant by
Mortgagor of any mortgage, lien, security interest, or other encumbrance
(hereinafter called "Subordinate Lien") covering any of the Property or if the
foregoing prohibition is determined by a court of competent jurisdiction to be
unenforceable as to a Subordinate Lien, any such Subordinate Lien shall contain
express covenants to the effect that: (1) the Subordinate Lien is
unconditionally subordinate to this Mortgage and all Leases (hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Lien, no
tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Holder; (3) Rents (hereinafter
defined), if collected by or for the holder of the Subordinate Lien, shall be
applied first to the payment of the Secured Indebtedness then due and expenses
incurred in the ownership, operation and maintenance of the Property in such
order as Holder may determine, prior to being applied to any indebtedness
secured by the Subordinate Lien; (4) written notice of default under the
Subordinate Lien and written notice of the commencement of any action (whether
judicial or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Lien or to seek the appointment of a receiver for all or any part of
the Property shall be given to Holder with or immediately after the occurrence
of any such default or commencement; and (5) neither the holder of the
Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor's
rights hereunder without the prior written consent of Holder.

      (j) Operation of Property. Mortgagor will operate the Property in a good
and workmanlike manner and in accordance with all Legal Requirements and will
pay all fees or charges of any kind in connection therewith. Mortgagor will keep
the Property occupied so as not to impair the insurance carried thereon.
Mortgagor will not use or occupy or conduct any activity on, or allow the use or
occupancy of or the conduct of any activity on, the Property in any manner which
violates any Legal Requirement or which constitutes a public or private nuisance
or which makes void, voidable or cancelable, or increases the premium of, any
insurance then in force with respect thereto. Mortgagor will not initiate or
permit any zoning reclassification of the Property or seek any variance under
existing zoning ordinances applicable to the Property or use or permit the use
of the Property in such a manner which would result in such use becoming a
nonconforming use under applicable zoning ordinances or other Legal Requirement.
Mortgagor will not impose any easement, restrictive covenant or encumbrance upon
the Property, execute or file any subdivision plat or condominium declaration
affecting the Property or consent to the annexation of the Property to any
municipality, without the prior written consent of Holder. Mortgagor will not do
or suffer to be done any act whereby the value of any part of the Property may
be lessened. Mortgagor will preserve, protect, renew, extend and retain all
material rights and privileges granted for or applicable to the Property.
Without the

                                       11
<PAGE>

prior written consent of Holder, there shall be no drilling or exploration for
or extraction, removal or production of any mineral, hydrocarbon, gas, natural
element, compound or substance (including sand and gravel) from the surface or
subsurface of the Land regardless of the depth thereof or the method of mining
or extraction thereof Mortgagor will cause all debts and liabilities of any
character (including without limitation all debts and liabilities for labor,
material and equipment (including software embedded therein) and all debts and
charges for utilities servicing the Property) incurred in the construction,
maintenance, operation and development of the Property to be promptly paid.

      (k) Financial Matters. Mortgagor is solvent after giving effect to all
borrowings contemplated by the Loan Documents and no proceeding under any Debtor
Relief Law (hereinafter defined) is pending (or, to Mortgagor's knowledge,
threatened) by or against Mortgagor, or any affiliate of Mortgagor, as a debtor.
All reports, statements, plans, budgets, applications, agreements and other data
and information heretofore furnished or hereafter to be furnished by or on
behalf of Mortgagor to Holder in connection with the loan or loans evidenced by
the Loan Documents (including, without limitation, all financial statements and
financial information) are and will be true, correct and complete in all
material respects as of their respective dates and do not and will not omit to
state any fact or circumstance necessary to make the statements contained
therein not misleading. No material adverse change has occurred since the dates
of such reports, statements and other data in the financial condition of
Mortgagor or, to Mortgagor's knowledge, of any tenant under any lease described
therein. For the purposes of this paragraph, "Mortgagor" shall also include any
person liable directly or indirectly for the Secured Indebtedness or any part
thereof and any joint venturer or general partner of Mortgagor.

      (l) Status of Mortgagor; Suits and Claims; Loan Documents. If Mortgagor is
a corporation, partnership, limited liability company, or other legal entity,
Mortgagor is and will continue to be (1) duly organized, validly existing and in
good standing under the laws of its state of organization, (ii) authorized to do
business in, and in good standing in, each state in which the Property is
located, and (iii) possessed of all requisite power and authority to carry on
its business and to own and operate the Property. Each Loan Document executed by
Mortgagor has been duly authorized, executed and delivered by Mortgagor, and the
obligations thereunder and the performance thereof by Mortgagor in accordance
with their terms are and will continue to be within Mortgagor's power and
authority (without the necessity of joinder or consent of any other person), are
not and will not be in contravention of any Legal Requirement or any other
document or agreement to which Mortgagor or the Property is subject, and do not
and will not result in the creation of any encumbrance against any assets or
properties of Mortgagor, or any other person liable, directly or indirectly, for
any of the Secured Indebtedness, except as expressly contemplated by the Loan
Documents. There is no suit, action, claim, investigation, inquiry, proceeding
or demand pending (or, to Mortgagor's knowledge, threatened) against Mortgagor
or against any other person liable directly or indirectly for the Secured
Indebtedness or which affects the Property (including, without limitation, any
which challenges or otherwise pertains to Mortgagor's title to the Property) or
the validity, enforceability or priority of any of the Loan Documents. There is
no judicial or administrative action, suit or proceeding pending (or, to
Mortgagor's knowledge, threatened) against Mortgagor, or against any other
person liable directly or indirectly for the Secured Indebtedness, except as has
been disclosed in writing to Holder in connection with the loan evidenced by the
Note. The Loan Documents constitute

                                       12
<PAGE>

legal, valid and binding obligations of Mortgagor enforceable in accordance with
their terms, except as the enforceability thereof may be limited by Debtor
Relief Laws (hereinafter defined) and except as the availability of certain
remedies may be limited by general principles of equity. Mortgagor is not a
"foreign person" within the meaning of the Internal Revenue Code of 1986, as
amended, Sections 1445 and 7701 (i.e. Mortgagor is not a non-resident alien,
foreign corporation, foreign partnership, foreign trust or foreign estate as
those terms are defined therein and in any regulations promulgated thereunder).
The loan evidenced by the Note is solely for business and/or investment
purposes, and is not intended for personal, family, household or agricultural
purposes. Mortgagor further warrants that the proceeds of the Note shall be used
for commercial purposes and stipulates that the loan evidenced by the Note shall
be construed for all purposes as a commercial loan. Mortgagor's exact legal name
is correctly set forth at the end of this Mortgage. If Mortgagor is not an
individual, Mortgagor is an organization of the type and (if not an unregistered
entity) is incorporated in or organized under the laws of the state specified in
the introductory paragraph of this Mortgage. If Mortgagor is an unregistered
entity (including, without limitation, a general partnership) it is organized
under the laws of the state specified in the introductory paragraph of this
Mortgage. Mortgagor will not cause or permit any change to be made in its name,
identity (including its trade name or names), or corporate or partnership
structure, unless Mortgagor shall have notified Holder in writing of such change
at least 30 days prior to the effective date of such change, and shall have
first taken all action required by Holder for the purpose of further perfecting
or protecting the lien and security interest of Holder in the Property. In
addition, Mortgagor shall not change its corporate or partnership structure
without first obtaining the prior written consent of Holder. Mortgagor's
principal place of business and chief executive office, and the place where
Mortgagor keeps its books and records, including recorded data of any kind or
nature, regardless of the medium of recording including, without limitation,
software, writings, plans, specifications and schematics concerning the
Property, has for the preceding four months (or, if less, the entire period of
the existence of Mortgagor) been and will continue to be (unless Mortgagor
notifies Holder of any change in writing at least 30 days prior to the date of
such change) the address of Mortgagor set forth at the end of this Mortgage. If
Mortgagor is an individual, Mortgagor's principal residence has for the
preceding four months been and will continue to be (unless Mortgagor notifies
Holder of any change in writing at least 30 days prior to the date of such
change) the address of the principal residence of Mortgagor set forth at the end
of this Mortgage. Mortgagor's organizational identification number, if any,
assigned by the state of incorporation or organization is correctly set forth on
the first page of this Mortgage. Mortgagor shall promptly notify Holder (i) of
any change of its organizational identification number, or (ii) if Mortgagor
does not now have an organization identification number and later obtains one,
of such organizational identification number.

      (m) Certain Environmental Matters. Mortgagor shall comply with the terms
and covenants of that certain Environmental Indemnity Agreement dated of even
date herewith (the "Environmental Agreement").

      (n) Further Assurances. Mortgagor will, promptly on request of Holder, (i)
correct any defect, error or omission which may be discovered in the contents,
execution or acknowledgment of this Mortgage or any other Loan Document; (ii)
execute, acknowledge, deliver, procure and record and/or file such further
documents (including, without limitation, further mortgages, security
agreements, and assignments of rents or leases) and do such further

                                       13
<PAGE>

acts as may be necessary, desirable or proper to carry out more effectively the
purposes of this Mortgage and the other Loan Documents, to more fully identify
and subject to the liens and security interests hereof any property intended to
be covered hereby (including specifically, but without limitation, any renewals,
additions, substitutions, replacements, or appurtenances to the Property) or as
deemed advisable by Holder to protect the lien or the security interest
hereunder against the rights or interests of third persons; and (iii) provide
such certificates, documents, reports, information, affidavits and other
instruments and do such further acts as may be necessary, desirable or proper in
the reasonable determination of Holder to enable Holder to comply with the
requirements or requests of any agency having jurisdiction over Holder or any
examiners of such agencies with respect to the indebtedness secured hereby,
Mortgagor or the Property. Mortgagor shall pay all costs connected with any of
the foregoing, which shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Holder pursuant to this Mortgage.

      (o)   Fees and Expenses. Without limitation of any other provision of this
Mortgage or of any other Loan Document and to the extent not prohibited by
applicable law, Mortgagor will pay, and will reimburse to Holder on demand to
the extent paid by Holder: (1) all appraisal fees, filing, registration and
recording fees, recordation, transfer and other taxes, brokerage fees and
commissions, abstract fees, title search or examination fees, title policy and
endorsement premiums and fees, uniform commercial code search fees, judgment and
tax lien search fees, escrow fees, attorneys' fees, architect fees, engineer
fees, construction consultant fees, environmental inspection fees, survey fees,
and all other costs and expenses of every character incurred by Mortgagor or
Holder in connection with the preparation of the Loan Documents, the evaluation,
closing and funding of the loan evidenced by the Loan Documents, and any and all
amendments and supplements to this Mortgage, the Note or any other Loan
Documents or any approval, consent, waiver, release or other matter requested or
required hereunder or thereunder, or otherwise attributable or chargeable to
Mortgagor as owner of the Property; and (ii) all costs and expenses, including
attorneys' fees and expenses, incurred or expended in connection with the
exercise of any right or remedy, or the defense of any right or remedy or the
enforcement of any obligation of Mortgagor, hereunder or under any other Loan
Document.

      (p)   Indemnification.

            (i) Mortgagor will indemnify and hold harmless Holder from and
against, and reimburse it on demand for, any and all Indemnified Matters
(hereinafter defined). For purposes of this paragraph (p), the term "Holder"
shall include Holder, and any persons owned or controlled by, owning or
controlling, or under common control or affiliated with Holder and the
directors, officers, partners, employees, attorneys, agents and representatives
of Holder. Without limitation, the foregoing indemnities shall apply to each
indemnified person with respect to matters, which in whole or in part are caused
by or arise out of the negligence of such (and/or any other) indemnified person.
However, such indemnities shall not apply to a particular indemnified person to
the extent that the subject of the indemnification is caused by or arises out of
the gross negligence or willful misconduct of that indemnified person. Any
amount to be paid under this paragraph (p) by Mortgagor to Holder shall be a
demand obligation owing by Mortgagor (which Mortgagor hereby promises to pay) to
Holder pursuant to this Mortgage. Nothing in this paragraph, elsewhere in this
Mortgage or in any other Loan Document shall limit or impair any rights or
remedies of Holder (including without limitation any rights of

                                       14
<PAGE>

contribution or indemnification) against Mortgagor or any other person under any
other provision of this Mortgage, any other Loan Document, any other agreement
or any applicable Legal Requirement.

            (ii) As used herein, the term "Indemnified Matters" means any and
all claims, demands, liabilities (including strict liability), losses, damages
(including consequential damages), causes of action, judgments, penalties,
fines, costs and expenses (including without limitation, reasonable fees and
expenses of attorneys and other professional consultants and experts, and of the
investigation and defense of any claim, whether or not such claim is ultimately
defeated, and the settlement of any claim or judgment including all value paid
or given in settlement) of every kind, known or unknown, foreseeable or
unforeseeable, which may be imposed upon, asserted against or incurred or paid
by Holder at any time and from time to time, whenever imposed, asserted or
incurred, because of, resulting from, in connection with, or arising out of any
transaction, act, omission, event or circumstance in any way connected with the
Property or with this Mortgage or any other Loan Document, including but not
limited to any bodily injury or death or property damage occurring in or upon or
in the vicinity of the Property through any cause whatsoever at any time on or
before the Release Date (hereinafter defined) any act performed or omitted to be
performed hereunder or under any other Loan Document, any breach by Mortgagor of
any representation, warranty, covenant, agreement or condition contained in this
Mortgage or in any other Loan Document, any default as defined herein, any claim
under or with respect to any Lease (hereinafter defined) or arising under the
Environmental Agreement. The term "Release Date" as used herein means the
earlier of the following two dates: (1) the date on which the indebtedness and
obligations secured hereby have been paid and performed in full and this
Mortgage has been released, or (ii) the date on which the lien of this Mortgage
is fully and finally foreclosed or a conveyance by deed in lieu of such
foreclosure is fully and finally effective, and possession of the Property has
been given to the purchaser or grantee free of occupancy and claims to occupancy
by Mortgagor and Mortgagor's heirs, devisees, representatives, successors and
assigns; provided, that if such payment, performance, release, foreclosure or
conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
Date shall be deemed not to have occurred until such challenge is rejected,
dismissed or withdrawn with prejudice. The indemnities in this paragraph (p)
shall not terminate upon the Release Date or upon the release, foreclosure or
other termination of this Mortgage but will survive the Release Date,
foreclosure of this Mortgage or conveyance in lieu of foreclosure, the repayment
of the Secured Indebtedness, the termination of any and all Swap Transactions,
the discharge and release of this Mortgage and the other Loan Documents, any
bankruptcy or other debtor relief proceeding, and any other event whatsoever.

      (q)   Records and Financial Reports. Mortgagor will keep accurate books
and records in accordance with sound accounting principles in which full, true
and correct entries shall be promptly made with respect to the Property and the
operation thereof, and will permit all such books and records, and all recorded
data of any kind or nature, regardless of the medium of recording including,
without limitation, all software, writings, plans, specifications and schematics
to be inspected and copied, and the Property to be inspected and photographed,
by Holder and its representatives during normal business hours and at any other
reasonable times. Without limitation of other or additional requirements in any
of the other Loan Documents, Mortgagor will furnish to Holder such financial
information and statements as are set forth in the

                                       15
<PAGE>

Loan Agreement. Mortgagor will furnish to Holder at Mortgagor's expense all
evidence, which Holder may from time to time reasonably request as to compliance
with all provisions of the Loan Documents. Any inspection or audit of the
Property or the books and records, including recorded data of any kind or
nature, regardless of the medium of recording including, without limitation,
software, writings, plans, specifications and schematics of Mortgagor, or the
procuring of documents and financial and other information, by or on behalf of
Holder shall be for Holder's protection only, and shall not constitute any
assumption of responsibility to Mortgagor or anyone else with regard to the
condition, construction, maintenance or operation of the Property nor Holder's
approval of any certification given to Holder nor relieve Mortgagor of any of
Mortgagor's obligations. Holder may from time to time assign or grant
participations in the Secured Indebtedness and Mortgagor consents to the
delivery by Holder to any acquirer or prospective acquirer of any interest or
participation in or with respect to all or part of the Secured Indebtedness such
information as Holder now or hereafter has relating to the Property, Mortgagor,
any party obligated for payment of any part of the Secured Indebtedness, any
tenant or guarantor under any lease affecting any part of the Property and any
agent or guarantor under any management agreement affecting any part of the
Property.

      (r) Taxes on Note or Mortgage. Mortgagor will promptly pay all income,
franchise and other taxes owing by Mortgagor and any stamp, documentary,
recordation and transfer taxes or other taxes (unless such payment by Mortgagor
is prohibited by law) which may be required to be paid with respect to the Note,
this Mortgage or any other instrument evidencing or securing any of the Secured
Indebtedness. In the event of the enactment after this date of any law of any
governmental entity applicable to Holder, the Note, the Property or this
Mortgage deducting from the value of property for the purpose of taxation any
lien or security interest thereon, or imposing upon Holder the payment of the
whole or any part of the taxes or assessments or charges or liens herein
required to be paid by Mortgagor, or changing in any way the laws relating to
the taxation of mortgages or security agreements or debts secured by mortgages
or security agreements or the interest of the mortgagee or secured party in the
property covered thereby, or the manner of collection of such taxes, so as to
affect this Mortgage or the Secured Indebtedness or Holder, then, and in any
such event, Mortgagor, upon demand by Holder, shall pay such taxes, assessments,
charges or liens, or reimburse Holder therefor; provided, however, that if in
the opinion of counsel for Holder (1) it might be unlawful to require Mortgagor
to make such payment or (ii) the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by law, then and in
such event, Holder may elect, by notice in writing given to Mortgagor, to
declare all of the Secured Indebtedness to be and become due and payable sixty
(60) days from the giving of such notice.

      (s) Statement Concerning Note or Mortgage. Mortgagor shall at any time and
from time to time furnish within seven (7) days of request by Holder a written
statement in such form as may be required by Holder stating that (i) the Note,
this Mortgage and the other Loan Documents are valid and binding obligations of
Mortgagor, enforceable against Mortgagor in accordance with their terms; (ii)
the unpaid principal balance of the Note; (iii) the date to which interest on
the Note is paid; (iv) the Note, this Mortgage and the other Loan Documents have
not been released, subordinated or modified; and (v) there are no offsets or
defenses against the enforcement of the Note, this Mortgage or any other Loan
Document. If any of the foregoing

                                       16
<PAGE>

statements in clauses (i), (iv) and (v) are untrue, Mortgagor shall,
alternatively, specify the reasons therefor.

      Section 2.2 Performance by Holder on Mortgagor's Behalf. Mortgagor agrees
that, if Mortgagor fails to perform any act or to take any action which under
any Loan Document Mortgagor is required to perform or take, or to pay any money
which under any Loan Document Mortgagor is required to pay, and whether or not
the failure then constitutes a default hereunder or thereunder, and whether or
not there has occurred any default or defaults hereunder or the Secured
Indebtedness has been accelerated, Holder, in Mortgagor's name or its own name,
may, but shall not be obligated to, perform or cause to be performed such act or
take such action or pay such money, and any expenses so incurred by Holder and
any money so paid by Holder shall be a demand obligation owing by Mortgagor to
Holder (which obligation Mortgagor hereby promises to pay), shall be a part of
the indebtedness secured hereby, and Holder, upon making such payment, shall be
subrogated to all of the rights of the person, entity or body politic receiving
such payment. Holder and its designees shall have the right to enter upon the
Property at any time and from time to time for any such purposes. No such
payment or performance by Holder shall waive or cure any default or waive any
right, remedy or recourse of Holder. Any such payment may be made by Holder in
reliance on any statement, invoice or claim without inquiry into the validity or
accuracy thereof. Each amount due and owing by Mortgagor to Holder pursuant to
this Mortgage shall bear interest, from the date such amount becomes due until
paid, at the rate per annum provided in the Note for interest on past due
principal owed on the Note but never in excess of the maximum nonusurious amount
permitted by applicable law, which interest shall be payable to Holder on
demand; and all such amounts, together with such interest thereon, shall
automatically and without notice be a part of the indebtedness secured hereby.
The amount and nature of any expense by Holder hereunder and the time when paid
shall be fully established by the certificate of Holder or any of Holder's
officers or agents.

      Section 2.3 Absence of Obligations of Holder with Respect to Property.
Notwithstanding anything in this Mortgage to the contrary, including, without
limitation, the definition of "Property" and/or the provisions of Article 3
hereof, (i) to the extent permitted by applicable law, the Property is composed
of Mortgagor's rights, title and interests therein but not Mortgagor's
obligations, duties or liabilities pertaining thereto, (ii) Holder neither
assumes nor shall have any obligations, duties or liabilities in connection with
any portion of the items described in the definition of "Property" herein,
either prior to or after obtaining title to such Property, whether by
foreclosure sale, the granting of a deed in lieu of foreclosure or otherwise,
and (iii) Holder may, at any time prior to or after the acquisition of title to
any portion of the Property as above described, advise any party in writing as
to the extent of Holder's interest therein and/or expressly disaffirm in writing
any rights, interests, obligations, duties and/or liabilities with respect to
such Property or matters related thereto. Without limiting the generality of the
foregoing, it is understood and agreed that Holder shall have no obligations,
duties or liabilities prior to or after acquisition of title to any portion of
the Property, as lessee under any lease or purchaser or seller under any
contract or option unless Holder elects otherwise by written notification.

      Section 2.4 Authorization to File Financing Statements; Power of Attorney.
Mortgagor hereby authorizes Holder at any time and from time to time to file any
initial financing statements, amendments thereto and continuation statements as
authorized by

                                       17
<PAGE>

applicable law, required by Holder to establish or maintain the validity,
perfection and priority of the security interests granted in this Mortgage. For
purposes of such filings, Mortgagor agrees to furnish any information requested
by Holder promptly upon request by Holder. Mortgagor also ratifies its
authorization for Holder to have filed any like initial financing statements,
amendments thereto or continuation statements if filed prior to the date of this
Mortgage. Mortgagor hereby irrevocably constitutes and appoints Holder and any
officer or agent of Holder, with full power of substitution, as its true and
lawful attorneys-in-fact with full irrevocable power and authority in the place
and stead of Mortgagor or in Mortgagor's own name to execute in Mortgagor's name
any such documents and to otherwise carry out the purposes of this Section 2.4,
to the extent that Mortgagor's authorization above is not sufficient. To the
extent permitted by law, Mortgagor hereby ratifies all acts said
attorneys-in-fact shall lawfully do, have done in the past or cause to be done
in the future by virtue hereof. This power of attorney is a power coupled with
an interest and shall be irrevocable.

                                    ARTICLE 3

                         Assignment of Rents and Leases

      Section 3.1 Assignment. Mortgagor hereby assigns to Holder all Rents
(hereinafter defined) and all of Mortgagor's rights in and under all Leases
(hereinafter defined). So long as no Default (hereinafter defined) has occurred,
Mortgagor shall have a license (which license shall terminate automatically and
without further notice upon the occurrence of a Default) to collect, but not
prior to accrual, the Rents under the Leases and, where applicable, subleases,
such Rents to be held in trust for Holder and to otherwise deal with all Leases
as permitted by this Mortgage. Each month, provided no Default has occurred,
Mortgagor may retain such Rents as were collected that month and held in trust
for Holder; provided, however, that all Rents collected by Grantor shall be
applied solely to the ordinary and necessary expenses of owning and operating
the Property or paid to Holder. Upon the revocation of such license, all Rents
shall be paid directly to Holder and not through Grantor, all without the
necessity of any further action by Holder, including, without limitation, any
action to obtain possession of the Land, Improvements or any other portion of
the Property or any action for the appointment of a receiver. Mortgagor hereby
authorizes and directs the tenants under the Leases to pay Rents to Holder upon
written demand by Holder, without further consent of Mortgagor, without any
obligation of such tenants to determine whether a Default has in fact occurred
and regardless of whether Holder has taken possession of any portion of the
Property, and the tenants may rely upon any written statement delivered by
Holder to the tenants. Any such payments to Holder shall constitute payments to
Mortgagor under the Leases, and Mortgagor hereby irrevocably appoints Holder as
its attorney-in-fact to do all things, after a Default, which Mortgagor might
otherwise do with respect to the Property and the Leases thereon, including,
without limitation, (1) collecting Rents with or without suit and applying the
same, less expenses of collection, to any of the obligations secured hereunder
or to expenses of operating and maintaining the Property (including reasonable
reserves for anticipated expenses), at the option of the Holder, all in such
manner as may be determined by Holder, or at the option of Holder, holding the
same as security for the payment of all Secured Indebtedness, (ii) leasing, in
the name of Mortgagor, the whole or any part of the Property which may become
vacant, and (iii) employing agents therefor and paying such agents reasonable
compensation for their services. The curing of such Default,

                                       18
<PAGE>

unless other Defaults also then exist, shall entitle Mortgagor to recover its
aforesaid license to do any such things which Mortgagor might otherwise do with
respect to the Property and the Leases thereon and to again collect such Rents.
The powers and rights granted in this paragraph shall be in addition to the
other remedies herein provided for upon the occurrence of a Default and may be
exercised independently of or concurrently with any of said remedies. Nothing in
the foregoing shall be construed to impose any obligation upon Holder to
exercise any power or right granted in this paragraph or to assume any liability
under any Lease of any part of the Property and no liability shall attach to
Holder for failure or inability to collect any Rents under any such Lease. The
assignment contained in this Section shall become null and void upon the release
of this Mortgage. As used herein: (i) "Lease" means each existing or future
lease, sublease (to the extent of Mortgagor's rights thereunder), or other
agreement under the terms of which any person has or acquires any right to
occupy or use the Property, or any part thereof, or interest therein, and each
existing or future guaranty of payment or performance thereunder, and all
extensions, renewals, modifications and replacements of each such lease,
sublease, agreement or guaranty; and (ii) "Rents" means all of the rents,
revenue, income, profits and proceeds derived and to be derived from the
Property or arising from the use or enjoyment of any portion thereof or from any
Lease, including but not limited to the proceeds from any negotiated lease
termination or buyout of such lease, liquidated damages following default under
any such Lease, all proceeds payable under any policy of insurance covering loss
of rents resulting from untenantability caused by damage to any part of the
Property, all of Mortgagor's rights to recover monetary amounts from any tenant
in bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including rejections,
under any applicable Debtor Relief Law (hereinafter defined), together with any
sums of money that may now or at any time hereafter be or become due and payable
to Mortgagor by virtue of any and all royalties, overriding royalties, bonuses,
delay rentals and any other amount of any kind or character arising under any
and all present and all future oil, gas, mineral and mining leases covering the
Property or any part thereof, and all proceeds and other amounts paid or owing
to Mortgagor under or pursuant to any and all contracts and bonds relating to
the construction or renovation of the Property.

      Section 3.2 Covenants, Representations and Warranties Concerning Leases
and Rents. Mortgagor covenants, represents and warrants that: (a) Mortgagor has
good title to, and is the owner of the entire landlord's interest in, the Leases
and Rents hereby assigned and authority to assign them; (b) all Leases are valid
and enforceable, and in full force and effect, and are unmodified except as
stated therein; (c) neither Mortgagor nor any tenant in the Property is in
default under its Lease (and no event has occurred which with the passage of
time or notice or both would result in a default under its Lease) or is the
subject of any bankruptcy, insolvency or similar proceeding; (d) unless
otherwise stated in a Permitted Encumbrance, no Rents or Leases have been or
will be assigned, mortgaged, pledged or otherwise encumbered and no other person
has or will acquire any right, title or interest in such Rents or Leases; (e) no
Rents have been waived, released, discounted, set off or compromised; (f) except
as stated in the Leases, Mortgagor has not received any funds or deposits from
any tenant for which credit has not already been made on account of accrued
Rents; (g) Mortgagor shall perform all of its obligations under the Leases and
enforce the tenants' obligations under the Leases to the extent enforcement is
prudent under the circumstances; (h) Mortgagor will not without the prior
written consent of Holder, enter into any Lease after the date hereof, or waive,
release, discount, set off,

                                       19
<PAGE>

compromise, reduce or defer any Rent, receive or collect Rents more than one (1)
month in advance, grant any rent-free period to any tenant, reduce any Lease
term or waive, release or otherwise modify any other material obligation under
any Lease, renew or extend any Lease except in accordance with a right of the
tenant thereto in such Lease, approve or consent to an assignment of a Lease or
a subletting of any part of the premises covered by a Lease, or settle or
compromise any claim against a tenant under a Lease in bankruptcy or otherwise;
(i) Mortgagor will not, without the prior written consent of Holder, terminate
or consent to the cancellation or surrender of any Lease having an unexpired
term of one (1) year or more unless promptly after the cancellation or surrender
a new Lease of such premises is made with a new tenant having a credit standing,
in Holder's judgment, at least equivalent to that of the tenant whose Lease was
canceled, on substantially the same terms as the terminated or canceled Lease;
(j) Mortgagor will not execute any Lease except in accordance with the Loan
Documents and for actual occupancy by the tenant thereunder; (k) Mortgagor shall
give prompt notice to Holder, as soon as Mortgagor first obtains notice, of any
claim, or the commencement of any action, by any tenant or subtenant under or
with respect to a Lease regarding any claimed damage, default, diminution of or
offset against Rent, cancellation of the Lease, or constructive eviction,
excluding, however, notices of default under residential Leases, and Mortgagor
shall defend, at Mortgagor's expense, any proceeding pertaining to any Lease,
including, if Holder so requests, any such proceeding to which Holder is a
party; (1) Mortgagor shall as often as requested by Holder, within ten (10) days
of each request, deliver to Holder a complete rent roll of the Property in such
detail as Holder may require and financial statements of the tenants, subtenants
and guarantors under the Leases to the extent available to Mortgagor, and
deliver to such of the tenants and others obligated under the Leases specified
by Holder written notice of the assignment in Section 3.1 hereof in form and
content satisfactory to Holder; (m) promptly upon request by Holder, Mortgagor
shall deliver to Holder executed originals of all Leases and copies of all
records relating thereto; (n) there shall be no merger of the leasehold estates,
created by the Leases, with the fee estate of the Land without the prior written
consent of Holder; and (o) Holder may at any time and from time to time by
specific written instrument intended for the purpose, unilaterally subordinate
the lien of this Mortgage to any Lease, without joinder or consent of, or notice
to, Mortgagor, any tenant or any other person, and notice is hereby given to
each tenant under a Lease of such right to subordinate. No such subordination
shall constitute a subordination to any lien or other encumbrance, whenever
arising, or improve the right of any junior lienholder; and nothing herein shall
be construed as subordinating this Mortgage to any Lease.

      Section 3.3 Estoppel Certificates. All Leases shall require the tenant to
execute and deliver to Holder an estoppel certificate in form and substance
acceptable to Holder within ten (10) days after notice from the Holder.

      Section 3.4 No Liability of Holder. Holder's acceptance of this assignment
shall not be deemed to constitute Holder a "mortgagee in possession," nor
obligate Holder to appear in or defend any proceeding relating to any Lease or
to the Property, or to take any action hereunder, expend any money, incur any
expenses, or perform any obligation or liability under any Lease, or assume any
obligation for any deposit delivered to Mortgagor by any tenant and not as such
delivered to and accepted by Holder. Holder shall not be liable for any injury
or damage to person or property in or about the Property, or for Holder's
failure to collect or to exercise diligence in collecting Rents, but shall be
accountable only for Rents that it shall actually

                                       20
<PAGE>

receive. Neither the assignment of Leases and Rents nor enforcement of Holder's
rights regarding Leases and Rents (including collection of Rents) nor possession
of the Property by Holder nor Holder's consent to or approval of any Lease (nor
all of the same), shall render Holder liable on any obligation under or with
respect to any Lease or constitute affirmation of, or any subordination to, any
Lease, occupancy, use or option.

If Holder seeks or obtains any judicial relief regarding Rents or Leases, the
same shall in no way prevent the concurrent or subsequent employment of any
other appropriate rights or remedies nor shall same constitute an election of
judicial relief for any foreclosure or any other purpose. Holder neither has nor
assumes any obligations as lessor or landlord with respect to any Lease. The
rights of Holder under this Article 3 shall be cumulative of all other rights of
Holder under the Loan Documents or otherwise.

                                    ARTICLE 4

                                     Default

      Section 4.1 Events of Default. The occurrence of any one of the following
shall be a default under this Mortgage ("default" or "Default"):

      (a)   Failure to Pay Indebtedness. Any of the Secured Indebtedness is not
paid when due (subject to any applicable cure period contained in the Loan
Documents), regardless of how such amount may have become due.

      (b)   Nonperformance of Covenants. Any covenant, agreement or condition
herein or in any other Loan Document (other than covenants otherwise addressed
in another paragraph of this Section, such as covenants to pay the Secured
Indebtedness) is not fully and timely performed, observed or kept, and such
failure is not cured within the applicable notice and cure period (if any)
provided for herein or in such other Loan Document.

      (c)   Default Under Other Loan Documents. The occurrence of a Default
under any other Loan Document, including an Early Termination Event as defined
in any Master Agreement relating to any Swap Transaction.

      (d)   Representations. Any statement, representation or warranty in any of
the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Holder in connection with the Secured
Indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.

      (e)   Bankruptcy or Insolvency. The Mortgagor or any owner of the
Property:

            (i) (A) Executes an assignment for the benefit of creditors, or
takes any action in furtherance thereof-, or (B) admits in writing its inability
to pay, or fails to pay, its debts generally as they become due; or (C) as a
debtor, files a petition, case, proceeding or other action pursuant to, or
voluntarily seeks the benefit or benefits of, Title 11 of the United States Code
as now or hereafter in effect or any other federal, state or local law, domestic
or foreign, as now or

                                       21
<PAGE>

hereafter in effect relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement, composition, extension or adjustment
of debts, or similar laws affecting the rights of creditors (Title 11 of the
United States Code and such other laws being herein called "Debtor Relief
Laws"), or takes any action in furtherance thereof; or (D) seeks the appointment
of a receiver, trustee, custodian or liquidator of the Property or any part
thereof or of any significant portion of its other property; or

            (ii) Suffers the filing of a petition, case, proceeding or other
action against it as a debtor under any Debtor Relief Law or seeking appointment
of a receiver, trustee, custodian or liquidator of the Property or any part
thereof or of any significant portion of its other property, and (A) admits,
acquiesces in or fails to contest diligently the material allegations thereof,
or (B) the petition, case, proceeding or other action results in entry of any
order for relief or order granting relief sought against it, or (C) in a
proceeding under Debtor Relief Laws, the case is converted from one chapter to
another, or (D) fails to have the petition, case, proceeding or other action
permanently dismissed or discharged on or before the earlier of trial thereon or
sixty (60) days next following the date of its filing; or

            (iii) Conceals, removes, or permits to be concealed or removed, any
part of its property, with intent to hinder, delay or defraud its creditors or
any of them, or makes or suffers a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or makes
any transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or suffers or permits,
while insolvent, any creditor to obtain a lien (other than as described in
subparagraph (iv) below) upon any of its property through legal proceedings
which are not vacated and such lien discharged prior to enforcement thereof and
in any event within sixty (60) days from the date thereof; or

            (iv) Fails to have discharged within a period often (10) days any
attachment, sequestration, or similar writ levied upon any of its property; or

            (v) Fails to pay immediately any final and unappealable money
judgment against it.

      (f)   Transfer of the Property. Any sale, lease, conveyance, assignment,
pledge, encumbrance, or transfer of all or any part of the Property or any
interest therein, voluntarily or involuntarily, whether by operation of law or
otherwise, except: (i) sales or transfers of items of the Accessories which have
become obsolete or worn beyond practical use and which have been replaced by
adequate substitutes, owned by Mortgagor, having a value equal to or greater
than the replaced items when new; and (ii) the grant, in the ordinary course of
business, of a leasehold interest in a part of the Improvements to a tenant for
occupancy, not containing a right or option to purchase and not in contravention
of any provision of this Mortgage or of any other Loan Document. Holder may, in
its sole discretion, waive a default under this paragraph, but it shall have no
obligation to do so, and any waiver may be conditioned upon such one or more of
the following (if any) which Holder may require: the grantee's integrity,
reputation, character, creditworthiness and management ability being
satisfactory to Holder in its sole judgment and grantee executing, prior to such
sale or transfer, a written assumption agreement containing such terms as Holder
may require, a principal paydown on the Note, an increase in the rate of
interest payable under the Note, a transfer fee, a modification of the term of
the Note, and any other

                                       22
<PAGE>

modification of the Loan Documents which Holder may require. NOTICE - THE DEBT
SECURED HEREBY IS SUBJECT TO CALL IN FULL AND ANY AND ALL SWAP TRANSACTIONS ARE
SUBJECT TO TERMINATION, OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE
OR CONVEYANCE OF THE PROPERTY, other than the sale of Units as contemplated in
the Loan Agreement.

      (g) Transfer of Assets. Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the other assets of Mortgagor,
excluding the Property, voluntarily or involuntarily, whether by operation of
law or otherwise, except: (i) sales or transfers in the ordinary course of
Mortgagor's business; and (ii) sales or transfers for which Mortgagor receives
consideration substantially equivalent to the fair market value of the
transferred asset.

      (h) Transfer of Ownership of Mortgagor. The sale, pledge, encumbrance,
assignment or transfer, voluntarily or involuntarily, whether by operation of
law or otherwise, of any interest in Mortgagor (if Mortgagor is not a natural
person but is a corporation, partnership, limited liability company, trust or
other legal entity), without the prior written consent of Holder (including,
without limitation, if Mortgagor is a partnership or joint venture, the
withdrawal from or admission into it of any general partner or joint venturer)
which consent shall not be unreasonably withheld.

      (i) Grant of Easement, Etc. Without the prior written consent of Holder,
Mortgagor grants any easement or dedication, files any plat, condominium
declaration, or restriction, or otherwise encumbers the Property, or seeks or
permits any zoning reclassification or variance, unless such action is expressly
permitted by the Loan Documents or does not affect the Property.

      (j) Abandonment. The owner of the Property abandons any of the Property.

      (k) Default Under Other Lien. A default or event of default occurs under
any lien, security interest or assignment covering the Property or any part
thereof (whether or not Holder has consented, and without hereby implying
Holder's consent, to any such lien, security interest or assignment not created
hereunder), or the holder of any such lien, security interest or assignment
declares a default or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.

      (1) Destruction. The Property is so demolished, destroyed or damaged that,
in the reasonable opinion of Holder, it cannot be restored or rebuilt with
available funds from any source to a profitable condition within a reasonable
period of time and in any event, prior to the final maturity date of the Note.

      (m) Condemnation. (i) Any governmental authority shall require, or
commence any proceeding for, the demolition of any building or structure
comprising a part of the Premises, or (ii) there is commenced any proceeding to
condemn or otherwise take pursuant to the power of eminent domain, or a contract
for sale or a conveyance in lieu of such a taking is executed which provides for
the transfer of, a material portion of the Premises, including but not limited
to the taking (or transfer in lieu thereof) of any portion which would result in
the blockage or

                                       23
<PAGE>

substantial impairment of access or utility service to the Improvements or which
would cause the Premises to fail to comply with any Legal Requirement.

      (n) Liquidation, Etc. The liquidation, termination, dissolution, merger,
consolidation or failure to maintain good standing in the State of South
Carolina and/or the state of incorporation or organization, if different, of the
Mortgagor.

      (o) Material, Adverse Change. In Holder's reasonable opinion, the prospect
of payment by Mortgagor or Guarantor of all or any part of the Secured
Indebtedness has been impaired because of a material, adverse change in the
financial condition, results of operations, business or properties of the
Mortgagor.

      (p) Enforceability; Priority. Any Loan Document shall for any reason
without Holder's specific written consent cease to be in full force and effect,
or shall be declared null and void or unenforceable in whole or in part, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by any party thereto other than Holder; or the liens, mortgages or
security interests of Holder in any of the Property become unenforceable in
whole or in part, or cease to be of the priority herein required, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by Mortgagor or any person obligated to pay any part of the Secured
Indebtedness.

      (q) [Reserved].

      (r) Other Indebtedness. A default or event of default occurs under any
document executed and delivered in connection with any other indebtedness (to
Mortgagee or any other person or entity) of Mortgagor.

      Section 4.2 Notice and Cure. If any provision of this Mortgage or any
other Loan Document provides for Holder to give to Mortgagor any notice
regarding a default or incipient default, then if Holder shall fail to give such
notice to Mortgagor as provided, the sole and exclusive remedy of Mortgagor for
such failure shall be to seek appropriate equitable relief to enforce the
agreement to give such notice and to have any acceleration of the maturity of
the Note and the Secured Indebtedness postponed or revoked and foreclosure
proceedings in connection therewith delayed or terminated pending or upon the
curing of such default in the manner and during the period of time permitted by
such agreement, if any, and Mortgagor shall have no right to damages or any
other type of relief not herein specifically set out against Holder, all of
which damages or other relief are hereby waived by Mortgagor. Nothing herein or
in any other Loan Document shall operate or be construed to add on or make
cumulative any cure or grace periods specified in any of the Loan Documents.

                                   ARTICLE 5

                                    Remedies

      Section 5.1 Certain Remedies. If a Default shall occur, Holder may (but
shall have no obligation to) exercise any one or more of the following remedies,
without notice (unless notice is required by applicable statute):

                                       24
<PAGE>

      (a) Acceleration. Holder may at any time and from time to time declare any
or all of the Secured Indebtedness immediately due and payable and may terminate
any and all Swap Transactions. Upon any such declaration, such Secured
Indebtedness shall thereupon be immediately due and payable, and such Swap
Transactions shall immediately terminate, without presentment, demand, protest,
notice of protest, notice of acceleration or of intention to accelerate or any
other notice or declaration of any kind, all of which are hereby expressly
waived by Mortgagor. Without limitation of the foregoing, upon the occurrence of
a default described in clauses (A), (C) or (D) of subparagraph (i) of paragraph
(d) of Section 4.1, hereof, all of the Secured Indebtedness shall thereupon be
immediately due and payable, without presentment, demand, protest, notice of
protest, declaration or notice of acceleration or intention to accelerate, or
any other notice, declaration or act of any kind, all of which are hereby
expressly waived by Mortgagor.

      (b) Enforcement of Assignment of Rents. In addition to the rights of
Holder under Article 3 hereof, prior or subsequent to taking possession of any
portion of the Property or taking any action with respect to such possession,
Holder may: (1) collect and/or sue for the Rents in Holder's own name, give
receipts and releases therefor, and after deducting all expenses of collection,
including attorneys' fees and expenses, apply the net proceeds thereof to the
Secured Indebtedness in such manner and order as Holder may elect and/or to the
operation and management of the Property, including the payment of management,
brokerage and attorney's fees and expenses; and (2) require Mortgagor to
transfer all security deposits and records thereof to Holder together with
original counterparts of the Leases.

      (c) Foreclosure. Upon failure to pay the Secured Indebtedness in full at
any stated or accelerated maturity, the Holder may foreclose the lien of this
Mortgage and sell, as an entirety or in separate lots or parcels, the Property,
under the judgment or decree of a court or courts of competent jurisdiction.
Holder shall take action either by such proceedings or by the exercise of its
powers with respect to entry or taking possession, or both, as the Holder may
determine. Holder, at its option, is authorized to foreclose this Mortgage
subject to the rights of any tenants of the Property and the failure to make any
such tenants parties defendant to any such foreclosure proceedings and to
foreclose their rights will not be, nor be asserted by Mortgagor to be, a
defense to any proceedings instituted by Holder to collect the sums secured
hereby or to collect any deficiency remaining unpaid after the foreclosure sale
of the Property.

      (d) Purchase by Holder. Upon any such foreclosure sale, Holder may bid for
and purchase the Premises and, upon compliance with the terms of sale, may hold,
retain and possess and dispose of such property in its own absolute right
without further accountability. Upon any such foreclosure sale, Holder may, if
permitted by law, after allowing for the proportion of the total purchase price
required to be paid in cash and for the costs and expenses of the sale,
compensation and other charges, in paying the purchase price apply any portion
of or all sums due to Holder under the Note, this Mortgage or any other
instrument securing the Note, in lieu of cash, to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon.

      (e) Uniform Commercial Code. Without limitation of Holder's rights of
enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for foreclosure of real estate, Holder may exercise its
rights of enforcement with respect to the

                                       25
<PAGE>

Collateral or any part thereof under the South Carolina Uniform Commercial Code,
as in effect from time to time (or under the Uniform Commercial Code in force,
from time to time, in any other state to the extent the same is applicable law),
and in conjunction with, in addition to or in substitution for those rights and
remedies: (1) Holder may enter upon Mortgagor's premises to take possession of,
assemble and collect the Collateral or, to the extent and for those items of the
Collateral permitted under applicable law, to render it unusable; (2) Holder may
require Mortgagor to assemble the Collateral and make it available at a place
Holder designates which is mutually convenient to allow Holder to take
possession or dispose of the Collateral; (3) written notice mailed to Mortgagor
as provided herein at least five (5) days prior to the date of public sale of
the Collateral or prior to the date after which private sale of the Collateral
will be made shall constitute reasonable notice; provided that, if Holder fails
to comply with this clause (3) in any respect, its liability for such failure
shall be limited to the liability (if any) imposed on it as a matter of law
under the South Carolina Uniform Commercial Code, as in effect from time to time
(or under the Uniform Commercial Code, in force from time to time, in any other
state to the extent the same is applicable law); (4) any sale made pursuant to
the provisions of this paragraph shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with and
upon the same notice as required for the sale of the Property under power of
sale as provided in paragraph (c) above in this Section 5.1; (5) in the event of
a foreclosure sale, the Collateral and the other Property may, at the option of
Holder, be sold as a whole; (6) it shall not be necessary that Holder take
possession of the Collateral or any part thereof prior to the time that any sale
pursuant to the provisions of this Section is conducted and it shall not be
necessary that the Collateral or any part thereof be present at the location of
such sale; (7) with respect to application of proceeds from disposition of the
Collateral under Section 5.2 hereof, the costs and expenses incident to
disposition shall include the reasonable expenses of retaking, holding,
preparing for sale or lease, selling, leasing and the like and the reasonable
attorneys' fees and legal expenses (including, without limitation, the allocated
costs for in-house legal services) incurred by Holder; (8) any and all
statements of fact or other recitals made in any bill of sale or assignment or
other instrument evidencing any foreclosure sale hereunder as to nonpayment of
the Secured Indebtedness or as to the occurrence of any default, or as to Holder
having declared all of such indebtedness to be due and payable, or as to notice
of time, place and terms of sale and of the properties to be sold having been
duly given, or as to any other act or thing having been duly done by Holder,
shall be taken as prima facie evidence of the truth of the facts so stated and
recited; (9) Holder may appoint or delegate any one or more persons as agent to
perform any act or acts necessary or incident to any sale held by Holder,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of Holder; (10) Holder may comply with any applicable state or
federal law or regulatory requirements in connection with a disposition of the
Collateral, and such compliance will not be considered to affect adversely the
commercial reasonableness of any sale of the Collateral; (11) Holder may sell
the Collateral without giving any warranties as to the Collateral, and
specifically disclaim all warranties including, without limitation, warranties
relating to title, possession, quiet enjoyment and the like, and all warranties
of quality, merchantability and fitness for a specific purpose, and this
procedure will not be considered to affect adversely the commercial
reasonableness of any sale of the Collateral; (12) Mortgagor acknowledges that a
private sale of the Collateral may result in less proceeds than a public sale;
and (13) Mortgagor acknowledges that the Collateral may be sold at a loss to
Mortgagor, and that, in such event, Holder shall have no liability or
responsibility to Mortgagor for such loss.

                                       26
<PAGE>

      (f) Lawsuits. Holder may proceed by a suit or suits in equity or at law,
whether for collection of the indebtedness secured hereby, the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Property under the judgment or decree of any court or courts of
competent jurisdiction.

      (g) Entry on Property. Holder is authorized, prior or subsequent to the
institution of any foreclosure proceedings, to the fullest extent permitted by
applicable law, to enter upon the Property, or any part thereof, and to take
possession of the Property and all books and records, and all recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and schematics
relating thereto, and to exercise without interference from Mortgagor any and
all rights which Mortgagor has with respect to the management, possession,
operation, protection or preservation of the Property. Holder shall not be
deemed to have taken possession of the Property or any part thereof except upon
the exercise of its right to do so, and then only to the extent evidenced by its
demand and overt act specifically for such purpose. All costs, expenses and
liabilities of every character incurred by Holder in managing, operating,
maintaining, protecting or preserving the Property shall constitute a demand
obligation of Mortgagor (which obligation Mortgagor hereby promises to pay) to
Holder pursuant to this Mortgage. If necessary to obtain the possession provided
for above, Holder may invoke any and all legal remedies to dispossess Mortgagor.
In connection with any action taken by Holder pursuant to this Section, Holder
shall not be liable for any loss sustained by Mortgagor resulting from any
failure to let the Property or any part thereof, or from any act or omission of
Holder in managing the Property unless such loss is caused by the willful
misconduct and bad faith of Holder, nor shall Holder be obligated to perform or
discharge any obligation, duty or liability of Mortgagor arising under any lease
or other agreement relating to the Property or arising under any Permitted
Encumbrance or otherwise arising. Mortgagor hereby assents to, ratifies and
confirms any and all actions of Holder with respect to the Property taken under
this Section.

      (h) Receiver. Holder shall as a matter of right be entitled to the
appointment of a receiver or receivers for all or any part of the Property,
whether such receivership be incident to a proposed foreclosure of such property
or otherwise, and without regard to the value of the Property or the solvency of
any person or persons liable for the payment of the indebtedness secured hereby,
and Mortgagor does hereby irrevocably consent to the appointment of such
receiver or receivers, waives notice of such appointment, of any request
therefor or hearing in connection therewith, and any and all defenses to such
appointment, agrees not to oppose any application therefor by Holder, and agrees
that such appointment shall in no manner impair, prejudice or otherwise affect
the rights of Holder to application of Rents as provided in this Mortgage.
Nothing herein is to be construed to deprive Holder of any other right, remedy
or privilege it may have under the law to have a receiver appointed. Any money
advanced by Holder in connection with any such receivership shall be a demand
obligation (which obligation Mortgagor hereby promises to pay) owing by
Mortgagor to Holder pursuant to this Mortgage.

      (i) Termination of Commitment to Lend. Holder may terminate any commitment
or obligation to lend or disburse funds under any Loan Document or enter into
any other credit arrangement to or for the benefit of Mortgagor.

                                       27
<PAGE>

      (j) Other Rights and Remedies. Holder may exercise any and all other
rights and remedies which Holder may have under the Loan Documents, or at law or
in equity or otherwise.

      Section 5.2 Proceeds of Foreclosure. The proceeds of any sale in
foreclosure of the liens and security interests evidenced hereby shall be
applied in accordance with the requirements of applicable laws and to the extent
consistent therewith, FIRST, to the payment of all necessary costs and expenses
incident to such foreclosure sale, including but not limited to all attorneys'
fees and legal expenses, advertising costs, auctioneer's fees, costs of title
rundowns and lien searches, inspection fees, appraisal costs, fees for
professional services, environmental assessment and remediation fees, all court
costs and charges of every character, and to the payment of the other Secured
Indebtedness, including specifically without limitation the principal, accrued
interest and attorneys' fees due and unpaid on the Note and the amounts due and
unpaid and owed to Holder under this Mortgage and the amounts due and unpaid and
owed to Holder (or its affiliates) under any Swap Transaction, the order and
manner of application to the items in this clause FIRST to be in Holder's sole
discretion; and SECOND, the remainder, if any there shall be, shall be paid to
Mortgagor, or to Mortgagor's heirs, devisees, representatives, successors or
assigns, or such other persons (including the holder or beneficiary of any
inferior lien) as may be entitled thereto by law; provided, however, that if
Holder is uncertain which person or persons are so entitled, Holder may
interplead such remainder in any court of competent jurisdiction, and the amount
of any attorneys' fees, court costs and expenses incurred in such action shall
be a part of the Secured Indebtedness and shall be reimbursable (without
limitation) from such remainder.

      Section 5.3 Holder as Purchaser. Holder shall have the right to become the
purchaser at any sale by any receiver or public officer or at any public sale,
and Holder shall have the right to credit upon the amount of Holder's successful
bid, to the extent necessary to satisfy such bid, all or any part of the Secured
Indebtedness in such manner and order as Holder may elect.

      Section 5.4 Foreclosure as to Matured Debt. Upon the occurrence of a
Default, Holder shall have the right to proceed with foreclosure of the liens
and security interests hereunder without declaring the entire Secured
Indebtedness due, and in such event any such foreclosure sale may be made
subject to the unmatured part of the Secured Indebtedness; and any such sale
shall not in any manner affect the unmatured part of the Secured Indebtedness,
but as to such unmatured part this Mortgage shall remain in full force and
effect just as though no sale had been made. The proceeds of such sale shall be
applied as provided in Section 5.2 hereof except that the amount paid under
Clause FIRST thereof shall be only the matured portion of the Secured
Indebtedness and any proceeds of such sale in excess of those provided for in
Clause FIRST (modified as provided above) shall be applied to the prepayment
(without penalty) of any other Secured Indebtedness in such manner and order and
to such extent as Holder deems advisable, and the remainder, if any, shall be
applied as provided in clause SECOND of Section 5.2 hereof. Several sales may be
made hereunder without exhausting the right of sale for any unmatured part of
the Secured Indebtedness.

      Section 5.5 Remedies Cumulative. All rights and remedies provided for
herein and in any other Loan Document are cumulative of each other and of any
and all other rights and remedies existing at law or in equity, and Holder
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights

                                       28
<PAGE>

and remedies as may now or hereafter exist at law or in equity for the
collection of the Secured Indebtedness and the enforcement of the covenants
herein and the foreclosure of the liens and security interests evidenced hereby,
and the resort to any right or remedy provided for hereunder or under any such
other Loan Document or provided for by law or in equity shall not prevent the
concurrent or subsequent employment of any other appropriate right or rights or
remedy or remedies.

      Section 5.6 Discretion as to Security. Holder may resort to any security
given by this Mortgage or to any other security now existing or hereafter given
to secure the payment of the Secured Indebtedness, in whole or in part, and in
such portions and in such order as may seem best to Holder in its sole and
uncontrolled discretion, and any such action shall not in anywise be considered
as a waiver of any of the rights, benefits, liens or security interests
evidenced by this Mortgage.

      Section 5.7 Mortgagor's Waiver of Certain Rights. To the full extent
Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any appraisement, valuation, stay, extension or
redemption, homestead, moratorium, reinstatement, marshaling or forbearance, and
Mortgagor, for Mortgagor, Mortgagor's heirs, devisees, representatives,
successors and assigns, and for any and all persons ever claiming any interest
in the Property, to the extent permitted by applicable law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of execution,
notice of intention to mature or declare due the whole of the Secured
Indebtedness, notice of election to mature or declare due the whole of the
Secured Indebtedness and all rights to a marshaling of assets of Mortgagor,
including the Property, or to a sale in inverse order of alienation in the event
of foreclosure of the liens and/or security interests hereby created. Mortgagor
shall not have or assert any right under any statute or rule of law pertaining
to the marshaling of assets, sale in inverse order of alienation, the exemption
of homestead, the administration of estates of decedents, or other matters
whatsoever to defeat, reduce or affect the right of Holder under the terms of
this Mortgage to a sale of the Property for the collection of the Secured
Indebtedness without any prior or different resort for collection, or the right
of Holder under the terms of this Mortgage to the payment of the Secured
Indebtedness out of the proceeds of sale of the Property in preference to every
other claimant whatsoever. Mortgagor waives any right or remedy, which Mortgagor
may have or be able to assert pursuant to any provision of South Carolina law
pertaining to the rights and remedies of sureties. If any law referred to in
this Section and now in force, of which Mortgagor or Mortgagor's heirs,
devisees, representatives, successors or assigns or any other persons claiming
any interest in the Property might take advantage despite this Section, shall
hereafter be repealed or cease to be in force, such law shall not thereafter be
deemed to preclude the application of this Section.

      Section 5.8 Delivery of Possession After Foreclosure In the event there is
a foreclosure sale hereunder and at the time of such sale, Mortgagor or
Mortgagor's heirs, devisees, representatives, or successors as owners of the
Property are occupying or using the Property, or any part thereof, each and all
shall immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day to day, terminable at the will of purchaser, at a
reasonable rental per day based upon the value of the property occupied, such
rental to be due daily to the purchaser; and to the extent permitted by
applicable law, the purchaser at such sale shall, notwithstanding any language
herein apparently to the contrary, have the sole option to

                                       29
<PAGE>

demand immediate possession following the sale or to permit the occupants to
remain as tenants at will. After such foreclosure, any Leases to tenants or
subtenants that are subject to this Mortgage (either by their date, their
express terms, or by agreement of the tenant or subtenant) shall, at the sole
option of Holder or any purchaser at such sale, either (i) continue in full
force and effect, and the tenant(s) or subtenant(s) thereunder will, upon
request, attom to and acknowledge in writing to the purchaser or purchasers at
such sale or sales as landlord thereunder, or (ii) upon notice to such effect
from Holder, or any purchaser or purchasers, terminate within thirty (30) days
from the date of sale. In the event the tenant fails to surrender possession of
the Property upon demand, the purchaser shall be entitled to institute and
maintain a summary action for possession of the Property (such as an action for
forcible detainer) in any court having jurisdiction.

                                    ARTICLE 6

                                 Miscellaneous

      Section 6.1 Scope of Mortgage. This Mortgage is a mortgage of both real
and personal property, a security agreement, an assignment of rents and leases,
a financing statement and a collateral assignment, and also covers proceeds and
fixtures.

      Section 6.2 Effective as a Financing Statement. This Mortgage shall be
effective as a financing statement filed as a fixture filing with respect to all
fixtures included within the Property and is to be filed for record in the real
estate records of each county where any part of the Property (including said
fixtures) is situated. This Mortgage shall also be effective as a financing
statement covering as-extracted collateral (including oil and gas), accounts and
general intangibles under the South Carolina Uniform Commercial Code, as in
effect from time to time, and the Uniform Commercial Code, as in effect from
time to time, in any other state where the Property is situated which will be
financed at the wellhead or minehead of the wells or mines located on the
Property and is to be filed for record in the real estate records of each county
where any part of the Property is situated. This Mortgage shall also be
effective as a financing statement covering any other Property and may be filed
in any other appropriate filing or recording office. The mailing address of
Mortgagor and the Holder are set forth at the end of this Mortgage. A carbon,
photographic or other reproduction of this Mortgage or of any financing
statement relating to this Mortgage shall be sufficient as a financing statement
for any of the purposes referred to in this Section.

      Section 6.3 Notice to Account Debtors. In addition to the rights granted
elsewhere in this Mortgage, Holder may at any time notify the account debtors or
obligors of any accounts, chattel paper, general intangibles, negotiable
instruments or other evidences of indebtedness included in the Collateral to pay
Holder directly.

      Section 6.4 Waiver by Holder. Holder may at any time and from time to time
by a specific writing intended for the purpose: (a) waive compliance by
Mortgagor with any covenant herein made by Mortgagor to the extent and in the
manner specified in such writing; (b) consent to Mortgagor's doing any act which
hereunder Mortgagor is prohibited from doing, or to Mortgagor's failing to do
any act which hereunder Mortgagor is required to do, to the extent and in the
manner specified in such writing; (c) release any part of the Property or any
interest

                                       30
<PAGE>

therein from the lien and security interest of this Mortgage; or (d) release any
party liable, either directly or indirectly, for the Secured Indebtedness or for
any covenant herein or in any other Loan Document, without impairing or
releasing the liability of any other party. No such act shall in any way affect
the rights or powers of Holder hereunder except to the extent specifically
agreed to by Holder in such writing.

      Section 6.5 No Impairment of Security. The lien, security interest and
other security rights of Holder hereunder or under any other Loan Document shall
not be impaired by any indulgence, moratorium or release granted by Holder
including, but not limited to, any renewal, extension or modification which
Holder may grant with respect to any Secured Indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which Holder
may grant in respect of the Property, or any part thereof or any interest
therein, or any release or indulgence granted to any endorser, guarantor or
surety of any Secured Indebtedness. The taking of additional security by Holder
shall not release or impair the lien, security interest or other security rights
of Holder hereunder or affect the liability of Mortgagor or of any endorser,
guarantor or surety, or improve the right of any junior lienholder in the
Property (without implying hereby Holder's consent to any junior lien).

      Section 6.6 Acts Not Constituting Waiver by Holder. Holder may waive any
default without waiving any other prior or subsequent default. Holder may remedy
any default without waiving the default remedied. Neither failure by Holder to
exercise, nor delay by Holder in exercising, nor discontinuance of the exercise
of any right, power or remedy (including but not limited to the right to
accelerate the maturity of the Secured Indebtedness or any part thereof) upon or
after any default shall be construed as a waiver of such default or as a waiver
of the right to exercise any such right, power or remedy at a later date. No
single or partial exercise by Holder of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or further exercise thereof,
and every such right, power or remedy hereunder may be exercised at any time and
from time to time. No modification or waiver of any provision hereof nor consent
to any departure by Mortgagor therefrom shall in any event be effective unless
the same shall be in writing and signed by Holder and then such waiver or
consent shall be effective only in the specific instance, for the purpose for
which given and to the extent therein specified. No notice to nor demand on
Mortgagor in any case shall of itself entitle Mortgagor to any other or further
notice or demand in similar or other circumstances. Remittances in payment of
any part of the Secured Indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by Holder in immediately available U.S. funds and shall be made and
accepted subject to the condition that any check or draft may be handled for
collection in accordance with the practice of the collecting bank or banks.
Acceptance by Holder of any payment in an amount less than the amount then due
on any Secured Indebtedness shall be deemed an acceptance on account only and
shall not in any way excuse the existence of a default hereunder notwithstanding
any notation on or accompanying such partial payment to the contrary.

      Section 6.7 Mortgagor's Successors. If the ownership of the Property or
any part thereof becomes vested in a person other than Mortgagor, Holder may,
without notice to Mortgagor, deal with such successor or successors in interest
with reference to this Mortgage and to the Secured Indebtedness in the same
manner as with Mortgagor, without in any way vitiating

                                       31
<PAGE>

or discharging Mortgagor's liability hereunder or for the payment of the
indebtedness or performance of the obligations secured hereby. No transfer of
the Property, no forbearance on the part of Holder, and no extension of the time
for the payment of the Secured Indebtedness given by Holder shall operate to
release, discharge, modify, change or affect, in whole or in part, the liability
of Mortgagor hereunder for the payment of the indebtedness or performance of the
obligations secured hereby or the liability of any other person hereunder for
the payment of the indebtedness secured hereby. Each Mortgagor agrees that it
shall be bound by any modification of this Mortgage or any of the other Loan
Documents made by Holder and any subsequent owner of the Property, with or
without notice to such Mortgagor, and no such modifications shall impair the
obligations of such Mortgagor under this Mortgage or any other Loan Document.
Nothing in this Section or elsewhere in this Mortgage shall be construed to
imply Holder's consent to any transfer of the Property.

      Section 6.8 Place of Payment; Forum; Waiver of Jury Trial. All Secured
Indebtedness which may be owing hereunder at any time by Mortgagor shall be
payable at the place designated in the Note (or if no such designation is made,
at the address of Holder indicated at the end of this Mortgage). Mortgagor
hereby irrevocably submits generally and unconditionally for itself and in
respect of its property to the non-exclusive jurisdiction of any South Carolina
state court, or any United States federal court, sitting in the county in which
the Secured Indebtedness is payable, and to the non-exclusive jurisdiction of
any state or United States federal court sitting in-the state in which any of
the Property is located, over any suit, action or proceeding arising out of or
relating to this Mortgage or the Secured Indebtedness. Mortgagor hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
Mortgagor may now or hereafter have to the laying of venue in any such court and
any claim that any such court is an inconvenient forum. Mortgagor hereby agrees
and consents that, in addition to any methods of service of process provided for
under applicable law, all service of process in any such suit, action or
proceeding in any South Carolina state court, or any United States federal
court, sitting in the state in which the Secured Indebtedness is payable may be
made by certified or registered mail, return receipt requested, directed to
Mortgagor at its address stated at the end of this Mortgage, or at a subsequent
address of Mortgagor of which Holder received actual notice from Mortgagor in
accordance with this Mortgage, and service so made shall be complete five (5)
days after the same shall have been so mailed. Nothing herein shall affect the
right of Mortgagee to serve process in any manner permitted by law or limit the
right of Mortgagee to bring proceedings against Mortgagor in any other court or
jurisdiction. TO THE FULLEST EXTENT PERMITTED BY LAW, MORTGAGOR WAIVES THE RIGHT
TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION, SUIT OR OTHER PROCEEDING ARISING
OUT OF OR RELATING TO THIS MORTGAGE OR ANY OTHER LOAN DOCUMENT.

      Section 6.9 Subrogation to Existing Liens; Vendor's Lien. To the extent
that proceeds of the Note are used to pay indebtedness secured by any
outstanding lien, security interest, charge or prior encumbrance against the
Property, such proceeds have been advanced by Holder at Mortgagor's request, and
Holder shall be subrogated to any and all rights, security interests and liens
owned by any owner or holder of such outstanding liens, security interests,
charges or encumbrances, however remote, irrespective of whether said liens,
security interests, charges or encumbrances are released, and all of the same
are recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and

                                       32
<PAGE>

provisions of this Mortgage shall govern and control the manner and terms of
enforcement of the liens, security interests, charges and encumbrances to which
Holder is subrogated hereunder. It is expressly understood that, in
consideration of the payment of such indebtedness by Holder, Mortgagor hereby
waives and releases all demands and causes of action for offsets and payments in
connection with the said indebtedness. If all or any portion of the proceeds of
the loan evidenced by the Note or of any other secured indebtedness has been
advanced for the purpose of paying the purchase price for all or a part of the
Property, no vendor's lien is waived; and Holder shall have, and is hereby
granted, a vendor's lien on the Property as cumulative additional security for
the Secured Indebtedness. Holder may foreclose under this Mortgage or under the
vendor's lien without waiving the other or may foreclose under both.

      Section 6.10 Application of Payments to Certain Indebtedness. If any part
of the Secured Indebtedness cannot be lawfully secured by this Mortgage or if
any part of the Property cannot be lawfully subject to the lien and security
interest hereof to the full extent of such indebtedness, then all payments made
shall be applied on said indebtedness first in discharge of that portion thereof
which is not secured by this Mortgage.

      Section 6.11 Nature of Loan; Compliance with Usury Laws. The loan
evidenced by the Note is being made solely for the purpose of carrying on or
acquiring a business or commercial enterprise. It is the intent of Mortgagor and
Holder and all other parties to the Loan Documents to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All
agreements between Holder and Mortgagor (or any other party liable with respect
to any indebtedness under the Loan Documents) are hereby limited by the
provisions of this Section, which shall override and control all such
agreements, whether now existing or hereafter arising. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, chargeable, or received under
this Mortgage, the Note or any other Loan Document or otherwise, exceed the
maximum nonusurious amount permitted by applicable law (the "Maximum Amount").
If, from any possible construction of any document, interest would otherwise be
payable in excess of the Maximum Amount, any such construction shall be subject
to the provisions of this Section and such document shall ipso facto be
automatically reformed and the interest payable shall be automatically reduced
to the Maximum Amount, without the necessity of execution of any amendment or
new document.. If Holder shall ever receive anything of value which is
characterized as interest under applicable law and which would apart from this
provision be in excess of the Maximum Amount, an amount equal to the amount
which would have been excessive interest shall, without penalty, be applied to
the reduction of the principal amount owing on the Secured Indebtedness in the
inverse order of its maturity and not to the payment of interest, or refunded to
Mortgagor or the other payor thereof if and to the extent such amount which
would have been excessive exceeds such unpaid principal. The right to accelerate
maturity of the Note or any other Secured Indebtedness does not include the
right to accelerate any interest, which has not otherwise accrued on the date of
such acceleration, and Holder does not intend to charge or receive any unearned
interest in the event of acceleration. All interest paid or agreed to be paid to
Holder shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term (including any renewal or
extension) of such indebtedness so that the amount of interest on account of
such indebtedness does not exceed the Maximum Amount As used in this

                                       33
<PAGE>

Section, the term "applicable law" shall mean the laws of the State of South
Carolina or the federal laws of the United States applicable to this
transaction, whichever laws allow the greater interest, as such laws now exist
or may be changed or amended or come into effect in the future.

      Section 6.12 Releases.

      (a) Release of Mortgage. If all of the Secured Indebtedness be paid as the
same becomes due and payable and all of the covenants, warranties, undertakings
and agreements made in this Mortgage are kept and performed, and all
obligations, if any, of Holder for further advances have been terminated, then,
and in that event only, all rights under this Mortgage shall terminate (except
to the extent expressly provided herein with respect to indemnifications,
representations and warranties and other rights which are to continue following
the release hereof) and the Property shall become wholly clear of the liens,
security interests, conveyances and assignments evidenced hereby, and such liens
and security interests shall be released by Holder in due form at Mortgagor's
cost. Without limitation, all provisions herein for indemnity of Holder shall
survive discharge of the Secured Indebtedness, the termination of any and all
Swap Transactions and any foreclosure, release or termination of this Mortgage.

      (b) Partial Releases; No Release in Default. Partial releases of the lien
of this Mortgage shall be made in accordance with the terms and provisions of
Exhibit C attached hereto and by this reference made a part hereof, or in
accordance with such other terms and conditions as may subsequently be agreed to
by Holder. If no such Exhibit C is attached hereto, then there are no terms and
provisions for partial releases, to which Holder and Mortgagor have agreed at
this time. In any event, no partial release shall be sought, requested or
required if any Default has occurred which has not been cured.

      (c) Effect of Partial Release. Holder may, regardless of consideration,
cause the release of any part of the Property from the lien of this Mortgage
without in any manner affecting or impairing the lien or priority of this
Mortgage as to the remainder of the Property.

      (d) Release Fee. If permitted by applicable law Mortgagor shall pay to
Holder, at the time of each partial or complete release of the lien of this
Mortgage, a release fee in the amount of. Twenty-Five and No/100 Dollars
($25.00) if the release instrument is delivered to Holder for execution or Fifty
and No/100 Dollars ($50.00), if Holder is required to prepare the release
instrument.

      Section 6.13 Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder or under
any other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage
prepaid, addressed to the party to whom directed at the addresses specified in
this Mortgage (unless changed by similar notice in writing given by the
particular party whose address is to be changed) or by facsimile. Any such
notice or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first
attempted delivery at the address and in the manner provided herein, or, in the
case of facsimile, upon receipt. Notwithstanding the foregoing, no notice of
change of address shall

                                       34
<PAGE>

be effective except upon receipt. This Section shall not be construed in any way
to affect or impair any waiver of notice or demand provided in any Loan Document
or to require giving of notice or demand to or upon any person in any situation
or for any reason.

      Section 6.14 Invalidity of Certain Provisions. A determination that any
provision of this Mortgage is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that the
application of any provision of this Mortgage to any person or circumstance is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.

      Section 6.15 Gender; Titles; Construction. Within this Mortgage, words of
any gender shall be held and construed to include any other gender, and words in
the singular number shall be held and construed to include the plural, unless
the context otherwise requires. Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of such
subdivisions, and shall be disregarded in construing the language contained in
such subdivisions. The use of the words "herein," "hereof," "hereunder" and
other similar compounds of the word "here" shall refer to this entire Mortgage
and not to any particular Article, Section, paragraph or provision. The term
"person" and words importing persons as used in this Mortgage shall include
firms, associations, partnerships (including limited partnerships), joint
ventures, trusts, corporations, limited liability companies and other legal
entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

      Section 6.16 Reporting Compliance. Mortgagor agrees to comply with any and
all reporting requirements applicable to the transaction evidenced by the Note
and secured by this Mortgage which are set forth in any law, statute, ordinance,
rule, regulation, order or determination of any governmental authority,
including but not limited to The International Investment Survey Act of 1976,
The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Holder to furnish Holder with evidence of such
compliance.

      Section 6.17 Holder's Consent. Except where otherwise expressly provided
herein, in any instance hereunder where the approval, consent or the exercise of
judgment of Holder is required or requested, (a) the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of Holder, and Holder shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or
Holder's judgment, and (b) no approval or consent of Holder shall be deemed to
have been given except by a specific writing intended for the purpose and
executed by an authorized representative of Holder.

      Section 6.18 Mortgagor. Unless the context clearly indicates otherwise, as
used in this Mortgage, "Grantor" means the Mortgagor named in Section 1.2 hereof
The obligations of Mortgagor hereunder shall be joint and several. If any
Mortgagor, or any signatory who signs on behalf of any Mortgagor, is a
corporation, partnership or other legal entity, Mortgagor and any such
signatory, and the person or persons signing for it, represent and warrant to
Holder that this instrument is executed, acknowledged and delivered by
Mortgagor's duly authorized

                                       35
<PAGE>

representatives. If Mortgagor is an individual, no power of attorney granted by
Mortgagor herein shall terminate on Mortgagor's disability.

      Section 6.19 Execution; Recording. This Mortgage has been executed in
several counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument. The date or dates
reflected in the acknowledgments hereto indicate the date or dates of actual
execution of this Mortgage, but such execution is as of the date shown on the
first page hereof, and for purposes of identification and reference the date of
this Mortgage shall be deemed to be the date reflected on the first page hereof.
Mortgagor will cause this Mortgage and all amendments and supplements thereto
and substitutions therefor and all financing statements and continuation
statements relating thereto to be recorded, filed, re-recorded and refiled in
such manner and in such places as Holder shall reasonably request and will pay
all such recording, filing, re-recording and refiling taxes, fees and other
charges.

      Section 6.20 Successors and Assigns. The terms, provisions, covenants and
conditions hereof shall be binding upon Mortgagor, and the heirs, devisees,
representatives, successors and assigns of Mortgagor, and shall inure to the
benefit of Holder and shall constitute covenants running with the Land. All
references in this Mortgage to Mortgagor shall be deemed to include all such
heirs, devisees, representatives, successors and assigns of Mortgagor.

      Section 6.21 Modification or Termination. The Loan Documents may only be
modified or terminated by a written instrument or instruments intended for that
purpose and executed by the party against which enforcement of the modification
or termination is asserted. Any alleged modification or termination which is not
so documented shall not be effective as to any party.

      Section 6.22 No Partnership, Etc.. The relationship between Holder and
Mortgagor is solely that of lender and borrower. Holder has no fiduciary or
other special relationship with Mortgagor. Nothing contained in the Loan
Documents is intended to create any partnership, joint venture, association or
special relationship between Mortgagor and Holder or in any way make Holder a
co-principal with Mortgagor with reference to the Property. All agreed
contractual duties between or among Holder and Mortgagor are set forth herein
and in the other Loan Documents and any additional implied covenants or duties
are hereby disclaimed. Any inferences to the contrary of any of the foregoing
are hereby expressly negated.

      Section 6.23 Applicable Law. THIS MORTGAGE, AND ITS VALIDITY, ENFORCEMENT
AND INTERPRETATION, SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE STATE OF SOUTH CAROLINA
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES
FEDERAL LAW. IN THE EVENT THAT THE "CHOICE OF LAW" RULES OF THE STATE OF SOUTH
CAROLINA CAN BE CONSTRUED OR INTERPRETED TO REQUIRE THE LAWS OF ANOTHER
JURISDICTION TO GOVERN, THE "CHOICE OF LAW" RULES OF THE STATE OF SOUTH CAROLINA
SHALL NOT APPLY.

      Section 6.24 Execution Under Seal. Mortgagor agrees that this instrument
is executed under seal. If Mortgagor is a corporation, the designation ("SEAL")
on this instrument shall be as effective as the affixing of Mortgagor's
corporate seal physically to this instrument.

                                       36
<PAGE>

      Section 6.25 Entire Agreement. The Loan Documents constitute the entire
understanding and agreement between Mortgagor and Holder with respect to the
transactions arising in connection with the Secured Indebtedness and supersede
all prior written or oral understandings and agreements between Mortgagor and
Holder with respect to the matters addressed in the Loan Documents. Mortgagor
hereby acknowledges that, except as incorporated in writing in the Loan
Documents, there are not, and were not, and no persons are or were authorized by
Holder to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the matters addressed in the Loan
Documents.

      Section 6.26 Greater Estate. In the event that Mortgagor is the owner of a
leasehold estate with respect to any portion of the Property and, prior to the
satisfaction of the indebtedness and the cancellation of this Mortgage of
record, Mortgagor obtains a fee estate in such portion of the Property, then,
such fee estate shall automatically, and without further action of any kind on
the part of Mortgagor, be and become subject to the security lien of this
Mortgage.

      Section 6.27 Covenants of Guarantors. As apart of the inducement to Holder
to make the loan evidenced by the Note, Mortgagor may have caused certain other
persons, firms or corporations to enter into certain guaranty agreements with
Holder pertaining to the financing and payment for construction of improvements
on the Land. In such event, Mortgagor covenants and agrees that such persons,
firms or corporations shall fully perform, comply with and abide by such
agreements. It is further understood and agreed by Mortgagor that such
representations and agreements by the other persons shall constitute, for the
purpose of its obligations hereunder, covenants on behalf of Mortgagor.

      Section 6.28 Certain Obligations Secured. TO THE EXTENT PERMITTED IN THE
LOAN DOCUMENTS, THE SECURED INDEBTEDNESS MAY INCLUDE INTEREST WHICH IS DEFERRED,
ACCRUED OR CAPITALIZED.

      Section 6.29 Arbitration. This Mortgage is subject to arbitration as
provided in the Promissory Note.

                                       37
<PAGE>

      Section 6.30 Waiver of Appraisal Rights . The laws of South Carolina
provide that in any real estate foreclosure proceeding a defendant against whom
a personal judgment is taken or asked may within thirty days after the sale of
the Property apply to the court for an order of appraisal. The statutory
appraisal value as approved by the court would be substituted for the high bid
and may decrease the amount of any deficiency owing in connection with the
transaction. THE MORTGAGOR HEREBY WAIVES AND RELINQUISHES THE STATUTORY
APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL
BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE PROPERTY.

      IN WITNESS WHEREOF, Mortgagor has executed this instrument under seal as
of the date first written on page 1 hereof.

                                                 Mortgagor:
Signed, sealed and
delivered in the                                 GRANDE PALMS, L.L.C.
presence of:

/s/ [ILLEGIBLE]
----------------------------
Witness                                          By: /s/ CHARLES N. NYE
                                                     --------------------------
                                                 Name: CHARLES N. NYE
/s/ [ILLEGIBLE]                                  Title: VICE PRESIDENT
----------------------------
Witness

                                                       [CORPORATE SEAL]

                                       38
<PAGE>

STATE OF TEXAS        )
                      )          ACKNOWLEDGMENT
COUNTY OF DALLAS      )

      THE FOREGOING INSTRUMENT was acknowledged before me this 27th day of April
2005, by Grande Palms, L.L.C., by CHARLES N. NYE, its VICE PRESIDENT.

/s/ Jean S Yarborough          (SEAL)
-----------------------------
Notray Public for TEXAS

My Commission Expires: April 9, 2008                        [STAMP]

                                       39
<PAGE>

                                  EXHIBIT "A"

                              PROPERTY DESCRIPTION

      ALL AND SINGULAR that certain piece, parcel, tract of land, lying, and
being in Little River Township, Horry County, South Carolina, consisting 3.99 +
acres, and being more particularly shown and delineated as "3.99 + AC" on a plat
by Atlantic Land Surveying Company, dated February 22, 2005, and recorded April
25, 2005, in Plat Book 204 at Page 217, records of Horry County, South Carolina
("Plat") ("Construction Parcel").

      BOUNDED as shown upon the Plat by Lot 89, Lot 91, and Lot 92 to the
Northwest; Kingston Road and Grantor (the latter hereinafter referred to as
"Construction parcel"); to the Northeast and Southeast; and Kingston Plantation,
North Hampton, and Richmond Park, Phase XIV to the Southwest, and more
particularly described as follows:

      Beginning at a 5/8 inch iron old, the most northeasterly point of a 50
foot ingress and egress easement, which is a common corner for lot 89 Arcadian
Shores (now or formerly owned by J. Thayer Coggin) and the Kingston Road
(private) 70 foot right-of-way.

      THENCE South 35 degrees 45 minutes 21 seconds East for a distance of 75.51
feet to a Y2 inch iron pipe old;

      THENCE South 35 degrees 48 minutes 21 seconds East for a distance of
299.75 feet to a Y2 inch iron pipe old;

      THENCE South 35 degrees 30 minutes 05 seconds East for a distance of 65.19
feet to a Y2 inch iron pipe old;

      THENCE South 35 degrees 44 minutes 39 seconds East for a distance of
345.66 feet to a '/2 inch iron pipe old;

      THENCE South 35 degrees 46 minutes 16 seconds East for a distance of
126.11 feet to a point;

      THENCE South 54 degrees 17 minutes 18 seconds West for a distance of
500.82 feet to a point;

      THENCE North 35 degrees 44 minutes 31 seconds West for a distance of
185.34 feet to a Y2 inch iron pipe old;

      THENCE North 35 degrees 44 minutes 31 seconds West for a distance of
286.34 feet to a 'h inch iron pipe old;

      THENCE North 35 degrees 47 minutes 49 seconds West for a distance of
364.85 feet to a '/2 inch iron pipe old;

      THENCE North 35 degrees 42 minutes 43 second West for a distance of 74.93
feet to a '/2 inch iron pipe old;

      THENCE-North 54 degrees 12 minutes 06 seconds East for a distance of
500.91 feet to a 5/8 inch iron new, the point of beginning.

      DERIVATION: This being the identical property conveyed to Mortgagor by
deed of Myrtle Beach Hotels, L.L.C., dated April 27, 2005, recorded
simultaneously herewith ("Derivation Deed").

      TOGETHER WITH, the right and easement to construct water, sewer, electric,
and other utility lines and facilities, and drainage systems and facilities, and
to construct such lines, systems, and facilities to water, sewer, electric, and
other utility lines and facilities, and/or drainage systems and facilities on
the above property, such construction and connections to be made at such
locations as all agreed upon by Myrtle Beach Hotels, L.L.C. and Mortgagor, from
time to time, as provided in the Derivation Deed.

      THE WITHIN conveyance is subject to restrictions of record, easement of
record, and on, over, and under the ground, as set out in the Derivation Deed,
and to that certain Agreement of Cooperation and Use between Mortgagor and
Myrtle Beach Hotels, L.L.C. of even date herewith, recorded in Deed Book ASNZ at
Page _____, records of Horry County, South Carolina.

      AND ALSO, subject to that certain Declaration of Covenants, Conditions and
Restrictions for Kingston Shores, dated April 26, 2005, and recorded April 29
2005, in Deed Book 2402 at Page 961, records of Horry County, South
Carolina.

                                       40
<PAGE>

                                   EXHIBIT B

                             PERMITTED ENCUMBRANCES

                    Those title encumbrances as set forth in

 Title Insurance Commitment No. 18681-53495 Grande Palms/Bank of America, N.A.

                    issued by Stewart Title Guaranty Company.

                                       41
<PAGE>

                                EXHIBIT C PARTIAL

                                     RELEASE

      Upon payment of the Release Fee for each Unit (as defined in the Loan
Agreement) and provided that there is no default or condition that with the
passage of time or the giving of notice or both would constitute a default under
any Loan Document, Holder, at the request and expense of Mortgagor, will
promptly release from the lien, legal effect and operation of the Mortgage and
to reconvey to Mortgagor, any one or more of the individual Units (as defined in
the Loan Agreement) contained within the Land.

      The sum paid to Holder for partial releases shall be applied to Holder's
option either to accrued and unpaid interest, to the outstanding principal
balance of the Note or to such other amounts as may be outstanding under the
Note.

                                       42exv10w2

 

Exhibit 10.2

CONFIDENTIAL TREATMENT REQUESTED

First Amendment to the Distribution Agreement

between

CEPHEID AND INFECTIO DIAGNOSTIC (I.D.I) INC. of November 4, 2003

This is the first amendment (“Amendment”) to the Distribution Agreement between Cepheid and
lnfectio Diagnostic (I.D.I.) of November 4, 2003 (hereinafter the “2003 Agreement”). This Amendment
is made as of the January 24, 2005 (the “Effective Date”) and is by and between Cepheid, a
California corporation with its principal place of business at 904 Caribbean Drive, Sunnyvale, CA
94089 (“Cepheid”) and GeneOhm Sciences, Inc., a Delaware corporation with its principal place of
business at 6146 Nancy Ridge Drive San Diego, CA 92121 (“GeneOhm”). GeneOhm has recently merged
with IDI and stands in the shoes of IDI as to performance under the 2003 Agreement. Cepheid and
GeneOhm are sometimes referred to herein individually as a “Party”, and collectively as the
“Parties.”

WHEREAS, the Parties wish to expand the purposes for which GeneOhm may sell SmartCycler
Instruments,

NOW THEREFORE, the Parties agree as follows:

	 	1.	 	Paragraph 1.10 of the 2003 Agreement is deleted in its entirety and is replaced
by the following:

	 	1.10	 	“Smart Cycler Instruments” means the Smart Cycler® I
and II Systems instruments manufactured and sold by Cepheid that are used to
perform Real Time PCR (and that include a computer), the Smart Cycler Reaction
Tubes to be used with such Smart Cycler Systems, the Cepheid Smart Cycler
Software (and any improvements and upgrades thereof) when sold in conjunction
with the sale by GeneOhm of a Smart Cycler I or II System, and any new
generation of the Smart Cycler Instruments, which instruments do not include
integrated sample preparation. (Software upgrades and Smart Cycler add on
blocks offered by Cepheid to its then existing Smart Cycler customers to be
used with those customers’ already purchased Smart Cycler Instruments, i.e.
aftermarket software upgrades and aftermarket add ons, shall also be available
for sale by GeneOhm to upgrade each Smart Cycler instrument sold by GeneOhm
that has not been provided with such software or block originally, provided
that with respect to upgrades that they are relevant to the Nonexclusive
Distribution Right in Paragraph 2.1.1.)

	 	2.	 	Paragraph 2.1.1 of the 2003 Agreement is deleted in its entirety and is
replaced by the following:

	 	2.1.1	 	Nonexclusive Distribution Right. Cepheid hereby
appoints GeneOhm to act as its nonexclusive, distributor of Smart Cycler
Instruments in the United States and Canada solely for use with IDI Assays, its
customers’ home brew tests for human in vitro diagnostics, its customer’s uses
in

 

			
	The symbol [***] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.	 	 

 

 

performing assays using Analyte Specific Reagents (as that term is defined
by the U.S. Food and Drug Administration) for human in vitro diagnostics,
its customer’s uses in clinical research for human in vitro diagnostics, and
its customer’s uses with assays manufactured and marketed by or for Cepheid,
and outside the United States and Canada, solely for use with IDI Assays.
IDI covenants and agrees that it will not apply, sell, offer to sell, or
cause to be sold, assays for use with the Smart Cycler Instrument, other
than those described above, or induce its customers to use the Smart Cycler
Instrument for other than the assays described above.

	 	3.	 	The first two sentences of Paragraph 4.2 of the 2003 Agreement are deleted in
their entirety and are replaced by the following:

	 	4.2	 	Prices. Cepheid will transfer the Smart Cycler
Instruments to IDI at the following pricing: For annual orders of 1 — 199 Smart
Cycler Instruments, the transfer price will be Cepheid’s Manufacturing Cost
plus [***] percent ( [***] %) for each such instrument
ordered with software capable of running IDI assays only, plus [***]
dollars ($ [***] ) for each such instrument ordered with software
capable of running both IDI or Cepheid assays and general purpose real time PCR
assays (hereinafter Multipurpose Software) (including home brews and Analyte
Specific Reagents (as that term is defined by the U.S. Food and Drug
Administration)). (By way of explanation, for Smart Cycler Instruments ordered
with the Multipurpose Software, the Multipurpose Software is provided at an
additional transfer price of $ [***] for each Smart Cycler system
ordered, whether that system has one block, two blocks or up to six blocks,
which is the maximum number of blocks that can be run on one computer, i.e.
each Multipurpose Software package purchased by GeneOhm can be used for only
one Smart Cycler computer system.) For annual orders of 200 Smart Cycler
Instruments or more, the transfer price will be Cepheid’s Manufacturing Cost
plus [***] percent (43%) for such instruments ordered with software
for running IDI assays only, plus [***] dollars ($ [***] ) if
ordered with Multipurpose Software. Regardless of the annual sales volume,
aftermarket software upgrades shall have a transfer price to GeneOhm equal to
the Cepheid list price minus [***] %. (Balance of Paragraph as
before).

The Parties, through their authorized officers, have executed this Agreement as of the Effective
Date.

	 	 	 	 	 	 	 
	CEPHEID	 	GeneOhm Sciences, Inc.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Joseph H. Smith
	 	By:
	 	/s/ Peter Klemm
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name: Joseph H. Smith	 	Name: Peter Klemm
	 
	 	 	 	 	 	 
	Title: Sr. Vice President & General Counsel	 	Title: CEO
	 
	 	 	 	 	 	 
	Date Signed: 04/06/05	 	Date Signed: 03/30/05

 

			
	The symbol [***] is used to indicate that a portion of the exhibit has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

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