HOMEGOLD FINANCIAL INC
EXHIBIT 10.9.6
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>mortgageandsecurityagr.txt
<DESCRIPTION>EXHIBIT 10.9.6
<TEXT>


Household - Homegold - Mortgage
SOUTH CAROLINA                            )           MORTGAGE
                                          )             AND
GREENVILLE COUNTY                         )      SECURITY AGREEMENT


         THIS MORTGAGE AND SECURITY AGREEMENT ("Mortgage") is entered into as of
April 19,  2001,  by and between  CAROLINA  INVESTORS,  INC.,  a South  Carolina
corporation ("Mortgagor");  and HOUSEHOLD COMMERCIAL FINANCIAL SERVICES, INC., a
Delaware corporation ("Lender").  Mortgagor is a subsidiary of Homegold, Inc., a
South  Carolina  corporation   ("Borrower"),   and  a  guarantor  of  Borrower's
indebtedness to Lender, as more fully described below.

         WHEREAS,  Borrower  is  indebted  to Lender on account  of a  revolving
credit  facility made  available to Borrower by Lender  pursuant to that certain
Credit Agreement dated May 2, 2000 as heretofore  amended (such Credit Agreement
as so amended and as the same may from time to time be amended  and  restated or
otherwise modified being hereinafter referred to as the "Credit Agreement") with
the loans made from time to time by Lender to Borrower  being  evidenced by that
certain Replacement Revolving Credit Note of Borrower dated May 30, 2000 payable
to the order of Lender in the face  principal  sum of One  Hundred  Million  and
No/100  Dollars  ($100,000,000.00)  together  with  interest  thereon as therein
provided (such  Replacement  Revolving Credit Note as the same may be amended or
modified  from  time  to  time  together  with  any  and  all  notes  issued  in
substitution  or  replacement  therefor  being  hereinafter  referred  to as the
"Note") which by reference is made a part of this Mortgage to the same extent as
though set out in this  Mortgage.  Payment of the Note  together  with all other
indebtedness, obligations and liabilities of Borrower to Lender is guaranteed by
Mortgagor pursuant to that certain Guaranty dated May 2, 2000 from Mortgagor and
certain other  subsidiaries of Borrower in favor of the Lender (such Guaranty as
the same may be amended or modified from time to time being hereinafter referred
to as the "Guaranty").

         NOW  THEREFORE,  to secure the payment of all principal of and interest
on the Note as and when the same becomes due and payable and all advances now or
hereafter  evidenced  thereby,  the  payment  of all other  indebtedness  of the
Borrower  to  the  Lender  under  the  Credit  Agreement,  the  payment  of  all
indebtedness  of the  Mortgagor to Lender  under the  Guaranty,  performance  by
Borrower of all  covenants  and  conditions  contained  in the Note,  the Credit
Agreement  and in all  other  instruments  securing  the  Note,  performance  by
Mortgagor  of all  covenants  and  conditions  contained in this  Mortgage,  the
Guaranty  and in all  other  instruments  relating  thereto;  and to  secure  in
accordance  with Section  29-3-50,  as amended,  Code of Laws of South  Carolina
1976: (i) all future advances and re-advances  that may  subsequently be made to
Borrower by the Lender, evidenced by the aforesaid Note, or any other promissory
notes,  and all  renewals  and  extensions  of the Note or any other  promissory
notes;  provided,  however, that nothing contained in this Mortgage shall create
an obligation on the part of Lender to make future  advances or  re-advances  to
Borrower  and (ii) the  payment and  performance  of all other  indebtedness  of
Borrower to Lender, now or hereafter existing,  whether direct or indirect,  the
maximum amount of all  indebtedness  outstanding at any one time secured by this
Mortgage not to exceed twice the face amount of the Note, plus interest thereon,
all  charges and  expenses of  collection  incurred by Lender,  including  court
costs,  and  reasonable  attorneys'  fees;  in order to charge  the  properties,
interests  and  rights  described  below  with  such  payment,  performance  and
observance;  for  and in  consideration  of the sum of One  and  No/100  Dollars
($1.00)  paid  by  Lender  to  Mortgagor  this  date,  and  for  other  valuable
consideration,  the  receipt of which is  acknowledged,  Mortgagor  does  grant,
bargain,  sell, alien, remise,  release,  convey,  assign,  transfer,  mortgage,
hypothecate,  pledge,  deliver,  set over,  warrant and confirm unto Lender, its
successors and assigns forever all right, title and interest of Mortgagor in and
to:

                               MORTGAGED PROPERTY

         (a)  The Land. All the land and other real property interests described
in attached Exhibit A ("Land");

         (b) The  Improvements.  Together with all buildings and improvements of
every kind and description  now or hereafter  erected or placed on the aforesaid
Land and all materials intended for construction, reconstruction, alteration and
repair of such  improvements now or hereafter  erected on the Land, all of which
materials  shall be deemed to be included  within the property  conveyed by this
Mortgage  immediately upon the delivery of such materials to the aforesaid Land,
and all fixtures and articles of personal property now or hereafter owned by the
Mortgagor  and attached to or contained in and used in  connection  with or with
the  operation  of,  the  Land,  buildings,  structures  or  other  improvements
including, but not limited to, all furniture, furnishings, apparatus, machinery,
machinery,   equipment,   motors,  elevators,   fittings,   radiators,   ranges,
refrigerators, awnings, shades, screens, blinds, carpeting, office equipment and
other  furnishings  and  all  plumbing,  heating,  lighting,  cooking,  laundry,
ventilating,   refrigerating,   incinerating,  air  conditioning  and  sprinkler
equipment,  telephone  systems,  televisions  and television  systems,  computer
systems and fixtures and  appurtenances  to the Land,  buildings,  structures or
other improvements, and all extensions, improvements,  betterments, renewals and
replacements  thereof or articles in  substitution  thereof,  whether or not the
same are or shall be attached to the Land in any manner (the "Improvements");

         (c) Easements or Other Interests.  Together with all easements,  rights
of way, gores of land, streets,  ways, alleys,  passages,  sewer rights, waters,
water  courses,  water  rights and  powers,  and all  estates,  rights,  titles,
interests,  privileges,  liberties,  tenements,  hereditaments and appurtenances
whatsoever,  in  any  way  belonging,  relating  or  appertaining  to any of the
property described above, or which hereafter shall in any way belong,  relate or
be  appurtenant  to such  property,  whether now owned or hereafter  acquired by
Mortgagor,  and the reversion and reversions,  remainder and remainders,  rents,
issues and profits of the property  described above, and all the estate,  right,
title, interest,  property,  possession,  claim and demand whatsoever, at law as
well as in  equity,  of  Mortgagor  of,  in and to the same,  including  but not
limited to all  judgments,  awards of damages  and  settlements  hereafter  made
resulting from condemnation  proceedings or the taking of the property described
in  paragraphs  (a),  (b), and (c) of this Mortgage or any part of such property
under the power of eminent  domain,  or for any damage  (whether  caused by such
taking or otherwise) to the property  described in paragraphs  (a), (b), and (c)
of this Mortgage or any part of such property,  or to any rights  appurtenant to
such  property,  and all  proceeds  of any  sales or other  dispositions  of the
property  described in paragraphs  (a), (b) and (c) of this Mortgage or any part
of such property;

         (d) Assignments of Rents. Together with all rents,  royalties,  issues,
profits,  revenue,  income and other  benefits  from the  property  described in
paragraphs  (a)  (b)  and  (c)  of  this  Mortgage  to be  applied  against  the
indebtedness and other sums secured by this Mortgage,  provided,  however,  that
permission  is given to Mortgagor so long as no default has occurred  under this
Mortgage,  to  collect,  receive,  take,  use and enjoy such  rents,  royalties,
issues,  profits,  revenue,  income and other  benefits  as they  become due and
payable,  but not in  advance  of the time  they  become  due and  payable.  The
foregoing  assignment shall be fully operative without any further action on the
part of either party and  specifically  Lender shall be entitled,  at its option
upon the occurrence of a default under this Mortgage,  to all rents,  royalties,
issues, profits,  revenue, income and other benefits from the property described
in  paragraphs  (a),  (b) and (c) of this  Mortgage  whether or not Lender takes
possession  of the  property  described in  paragraphs  (a), (b) and (c) of this
Mortgage.  Upon any such default under this Mortgage,  the  permission  given to
Mortgagor to collect such rents, royalties, issues, profits, revenue, income and
other  benefits from the property  described in  paragraphs  (a), (b) and (c) of
this Mortgage shall terminate and such permission shall not be reinstated upon a
cure of the default without Lender's specific  consent.  Neither the exercise of
any rights under this paragraph by Lender nor the application of any such rents,
royalties,   issues,   profits,   revenue,  income  or  other  benefits  to  the
indebtedness  and other sums secured by this  Mortgage,  shall cure or waive any
default or notice of default  under this  Mortgage  or  invalidate  any act done
pursuant to this Mortgage or to any such notice,  but shall be cumulative of all
other rights and remedies;

         (e) Assignment of Leases.  Together with all right,  title and interest
of Mortgagor  in and to any and all leases now or hereafter on or affecting  the
property  described in paragraphs  (a), (b) and (c) of this  Mortgage,  together
with all security for this  Mortgage and all monies  payable  under such leases,
subject,  however,  to the  conditional  permission  described  above  given  to
Mortgagor to collect the rentals under any such lease. The foregoing  assignment
of any lease shall not be deemed to impose upon Lender any of the obligations or
duties of Mortgagor  provided in any such lease,  and Mortgagor  agrees to fully
perform all  obligations  of the lessor  under all such  leases.  Upon  Lender's
request,  Mortgagor agrees to send to Lender a list of all leases covered by the
foregoing  assignment  and as any such lease shall expire or terminate or as any
new lease shall be made,  Mortgagor  shall so notify Lender in order that at all
times  Lender  shall have a current  list of all leases  affecting  the property
described in paragraphs (a), (b) and (c) of this Mortgage. Lender shall have the
right,  at any time and from time to time, to notify any lessee of the rights of
Lender as provided by this paragraph. From time to time, upon request of Lender,
Mortgagor shall specifically  assign to Lender as additional security under this
Mortgage, by an instrument in writing in such form as may be approved by Lender,
all right,  title and  interest of Mortgagor in and to any and all leases now or
hereafter on or affecting the Property,  together with all security therefor and
all monies  payable  under such leases,  subject to the  conditional  permission
described  above given to Mortgagor to collect the rentals under any such lease.
Mortgagor shall also execute and deliver to Lender any  notification,  financing
statement  or other  document  reasonably  required  by  Lender to  perfect  the
foregoing assignment as to any such lease;

         (f) Fixtures and Personal  Property.  Together with a security interest
in (i) all personal property and fixtures now or hereafter  acquired and affixed
to or located on the property  described in paragraphs  (a), (b) and (c) of this
Mortgage which, to the fullest extent  permitted by law shall be deemed fixtures
and a part of the real property,  (ii) all articles of personal  property now or
hereafter  acquired and all  materials  delivered  to the property  described in
paragraphs (a), (b) and (c) of this Mortgage (including such property for use in
any  construction  being  conducted  on such  property)  and  owned or leased by
Mortgagor, including, but not limited to, all equipment, furniture, furnishings,
inventory, apparatus, machinery, motors, elevators, fittings, radiators, ranges,
refrigerators, awnings, shades, screens, blinds, carpeting, office equipment and
other  furnishings  and  all  plumbing,  heating,  lighting,  cooking,  laundry,
ventilating,   refrigerating,   incinerating,  air  conditioning  and  sprinkler
equipment   and  fixtures  and   appurtenances   thereto  and  all  renewals  or
replacements  thereof or articles in  substitution  thereof,  whether or not the
same are or shall be attached to said Land and Improvements in any manner, (iii)
all existing and future  choses in action and claims of every nature  whatsoever
related to the Land or the  Improvements,  including  without  limitation claims
related to design or construction  defects or otherwise concerning the condition
of the Land or the  Improvements,  claims arising from damage to the Land or the
Improvements  caused by the acts of third parties,  and claims for injury to the
operation of the Land or the  Improvements or diminution of the revenues derived
from the Land or the Improvements  arising from the acts of third parties,  (iv)
all  leases of  personal  property,  accounts,  contracts  rights,  instruments,
chattel paper, cash, rights to withdraw cash, general  intangibles,  actions and
rights in action now or hereafter acquired pertaining to the Property, including
all rights to insurance proceeds, and (v) all proceeds, products,  replacements,
additions,  substitutions  renewals  and  accessions  of any  of the  foregoing.
Mortgagor  (Debtor) grants to Lender (Secured Party) a security  interest in all
fixtures,  rights in action and personal  property  described in this  Mortgage.
This  Mortgage  is a  self-operative  security  agreement  with  respect to such
property,  but  Mortgagor  agrees to execute  and  deliver on demand  such other
security  agreements,  financing  statements and other instruments as Lender may
reasonably  request in order to prefect its  security  interest or to impose the
lien of this Mortgage more  specifically  upon any of such  property.  Mortgagor
agrees to pay Lender's  charge,  to the maximum amount permitted by law, for any
statement  by Lender  regarding  the  obligations  secured by this  Mortgage and
Security Agreement requested by Mortgagor or on behalf of Mortgagor.  On demand,
Mortgagor  will  promptly  pay  all  costs  and  expenses  of  filing  financing
statements,   continuation   statements,   partial  releases,   and  termination
statements  deemed  necessary or appropriate by Lender to establish and maintain
the  validity  and  priority  of  the  security   interest  of  Lender,  or  any
modification of the security  interest of Lender,  and all costs and expenses of
any searches  reasonably  required by Lender.  Lender may exercise any or all of
the remedies of a secured  party  available  to it under the Uniform  Commercial
Code (South Carolina) with respect to such property,  and it is expressly agreed
in  accordance  with  the  provisions  of the  Uniform  Commercial  Code  (South
Carolina),  that ten (10) days' notice by Lender to Mortgagor shall be deemed to
be reasonable  notice under any provision of the Uniform  Commercial Code (South
Carolina)  requiring  such  notice;  provided,  however,  that Lender may at its
option dispose of the collateral in accordance with Lender's rights and remedies
in respect to the real property  pursuant to the provisions of this Mortgage and
Security  Agreement,  in lieu of proceeding  under the Uniform  Commercial  Code
(South Carolina); and

         (g) Assignment of Contract Rights and Leases. Together with an absolute
assignment of and grant of security interest in all of the right,  title and the
interest  of the  Mortgagor  in and to any and all leases  (including  equipment
leases),   rental  agreements,   management  contracts,   franchise  agreements,
construction  contracts,  architects' contracts,  technical services agreements,
licenses and permits now or hereafter  affecting the Property or any part of the
Property,  and the  Mortgagor  agrees to execute  and deliver to the Lender such
additional instruments, in form and substance satisfactory to the Lender, as may
hereafter be  requested  by the Lender to evidence and confirm said  assignment;
provided, however, that acceptance of any such assignment shall not be construed
as a consent by the Lender to any lease, rental agreement,  management contract,
franchise  agreement,  construction  contract,  technical  services agreement or
other contract,  license or permit,  or to impose upon the Lender any obligation
with respect thereto.

         Some of the items of property described in this Mortgage are goods that
are or are to become  fixtures  related  to the real  estate  described  in this
Mortgage,  and it is intended  that, as to those goods,  this Mortgage  shall be
effective as a financing  statement  filed as a fixture  filing from the date of
its filing or record in the real estate  records of the county in which the Land
is  located.  Information  concerning  the  security  interest  created  by this
instrument  maybe  obtained from Lender,  as Secured  Party,  or  Mortgagor,  as
Debtor, at the address shown below.

         This instrument  constitutes an absolute and present  assignment of the
rents, royalties,  issues, profits,  revenue, income and other benefits from the
Property to Lender, subject to the right of Mortgagor to collect, receive, take,
use and enjoy the same as provided above; provided,  further, that the existence
or exercise of such right of  Mortgagor  shall not operate to  subordinate  this
assignment to any subsequent assignment,  in whole or in part, by Mortgagor, and
any such  subsequent  assignment by Mortgagor  shall be subject to the rights of
Lender under this Mortgage.

         All property  referred to in paragraphs (a), (b), (c), (d), (e) (f) and
(g) of this Mortgage and any additional property hereafter acquired by Mortgagor
and subject to the lien of this  Mortgage or intended to be so is referred to in
this Mortgage as the "Property".

         TO HAVE AND HOLD the same, together with all privileges, hereditaments,
easements and appurtenances  thereunto belonging, to the Lender and the Lender's
successors and assigns to secure the  indebtedness  recited in this Mortgage and
should the indebtedness  secured by this Mortgage be paid according to the tenor
and  effect  thereof  when the same  shall be due and  payable  and  should  the
Borrower and Mortgagor  timely and fully  discharge the  obligations  secured by
this Mortgage, then the Property granted, conveyed and assigned by this Mortgage
shall cease and be void, but shall otherwise remain in full force and effect.

         The Mortgagor and the Lender covenant, represent and agree as follows:

                                    ARTICLE I
                                    THE LOAN

1.1 LOAN. The  indebtedness  secured by this Mortgage is the result of a loan of
money in a maximum principal amount not exceeding One Hundred Million and No/100
Dollars ($100,000,000.00)  (hereafter referred to as the "Loan") disbursed or to
be disbursed by the Lender to the Borrower.

1.2 USE OF LOAN FUNDS. The Loan is made pursuant to the Credit Agreement for the
purpose of, inter alia,  financing  Borrower's  acquisition  or  origination  of
mortgage loans.

1.3 NOTE.  The Loan is evidenced  by a Revolving  Credit Note dated May 2, 2000,
payable to the order of the Lender in the  principal  amount of  $100,000,000.00
("Note").

1.4  PAYMENT OF NOTE AND  GUARANTY.  Payment by the  Borrower of  principal  and
interest on the Loan will be in accordance  with the Note and Credit  Agreement.
Payment by the  Mortgagor of its  guaranty  of, inter alia,  the Loan will be in
accordance with the Guaranty.

1.5  INCORPORATION  OF LOAN  DOCUMENTS.  The Note,  this  Mortgage  and Security
Agreement,  the Credit Agreement, the Guaranty and any other document evidencing
or securing the Loan or setting forth terms and  conditions  applicable  thereto
(collectively,  "Loan  Documents")  constitute the entire agreement  between the
parties with respect to the subject matter of this Mortgage,  and supersedes any
and all  prior  agreements  and  understandings,  written  or oral.  The  terms,
conditions,  provisions and definitions of the Credit Agreement are incorporated
in this Mortgage by reference and, to the extent that the Lender's  rights under
the Credit Agreement or any other Loan Document  supplement or extend its rights
under  this  Mortgage,  this  Mortgage  and the Credit  Agreement  or other Loan
Document shall be interpreted  together as being  consistent and  supplementary,
and to the extend there is a direct  contradiction,  the Credit  Agreement shall
control.

                                   ARTICLE II
              MORTGAGOR'S COVENANTS, REPRESENTATIONS AND AGREEMENTS

2.1 TITLE TO PROPERTY.  The Mortgagor  represents and warrants that it is seized
of the Land and  Improvements  (and any  fixtures)  in fee (and has title to any
appurtenant  easements) and has the right to convey the same, that title to such
property is free and clear of all  encumbrances  except for the matters shown on
Exhibit B attached to this Mortgage (the "Permitted Encumbrances"),  and that it
will  warrant  and defend the title to such  property  against the claims of all
persons or parties except for the Permitted  Encumbrances.  As to the balance of
the Property,  the Mortgagor  represents  and warrants that it has title to such
property, that it has the right to convey such property and that it will warrant
and defend such property against the claims of all persons or parties except for
Permitted Exceptions.

2.2 PERFORMANCE OF LOAN DOCUMENTS.  Mortgagor shall, and shall cause Borrower to
perform,  observe and comply with all provisions of this Mortgage,  of the Note,
of the Guaranty,  of the Credit Agreement and of every other Loan Document,  and
will  promptly  pay,  and cause  Borrower to pay, to Lender the  principal  with
interest thereon and all other sums required to be paid by Mortgagor or Borrower
under the Note, this Mortgage,  the Guaranty,  the Credit Agreement and of every
other Loan Document when payment shall become due.

2.3      TAXES AND FEES.

(a) The Mortgagor  will pay, and upon request of the Lender,  will submit to the
Lender receipts evidencing said payments,  as they become due all taxes, general
and special  assessments,  insurance  premiums,  permit fees,  inspection  fees,
license fees, all water and sewer charges,  franchise fees,  equipment rents and
all encumbrances of every kind against it or the Property, and any charge which,
if unpaid would become a lien or charge against the Property  before they become
delinquent  and before any interest  attaches or penalty is  incurred;  provided
that the Mortgagor shall have the right to contest,  by appropriate  proceedings
conducted  in good faith and with due  diligence,  the amount or validity of any
such taxes, assessments,  premiums, fees, charges, rents or encumbrances so long
as (i) the commencement  and continuance of such  proceedings  shall suspend the
collection  thereof  from,  and suspend the  enforcement  thereof  against,  the
Mortgagor,  the  Property  or the  Lender,  (ii)  there  shall be no risk of the
imposition of a lien (other than a Permitted Encumbrance) on the Property and no
portion of the Property would be in any danger of being sold, forfeited, lost or
deferred, and (iii) Mortgagor shall post any required bonds.

(b)  Mortgagor  shall  not  permit  or suffer  more  than  thirty  (30) days any
mechanics',  laborers',  materialmen's,  statutory or other lien upon any of the
Property.

(c) Lender may, if it deems in its reasonable judgment that its security for the
Note is impaired,  require  Mortgagor to deposit with Lender on the first day of
each month,  in  addition  to making any  required  payments  of  principal  and
interest,  until the Note is full paid, an amount equal to one-twelfth (1/12) of
the yearly taxes and  assessments  as estimated  by Lender to be  sufficient  to
enable Lender to pay at least thirty (30) days before they become due all taxes,
assessments  and other  similar  charge  against the Property or any part of the
Property.  Such deposits shall not be, nor be deemed to be, trust funds, but may
be commingled with the general funds of Lender, and no interest shall be payable
in respect of such deposits.  Upon demand by Lender,  Mortgagor shall deliver to
Lender such additional monies as are required to make up any deficiencies in the
amounts necessary to enable Lender to pay such taxes,  assessments,  and similar
charges.  In the  event of a  default  under  any of the  terms,  covenants  and
conditions of the Note,  this  Mortgage,  the Guaranty or any other  instruments
securing the Note to be kept,  performed  or observed by Borrower or  Mortgagor,
Lender may apply to the reduction of the sums secured by this Mortgage,  in such
manner as Lender  shall  determine,  any amount under this  paragraph  2.3(c) of
Article Two remaining to Mortgagor's credit.

(d)  Mortgagor  shall not claim,  demand or be entitled to receive any credit or
credits on the  principal or interest  payable under the terms of the Note or on
any other sums secured by this Mortgage,  for so much of the taxes,  assessments
or similar impositions assessed against the Property or any part of the Property
as are  applicable to the  indebtedness  secured by this Mortgage or to Lender's
interest in the Property.  No deduction  shall be claimed from the taxable value
of the Property or any part of the Property by reason of the Note, this Mortgage
or any other Loan Document.

2.4  REIMBURSEMENT.  The Mortgagor  agrees that if it shall fail to pay when due
any tax,  assessment  or charge  levied or assessed  against the Property or any
utility charge,  whether public or private,  or any insurance  premiums or if it
shall fail to procure the  insurance  coverage and the delivery of the insurance
certificates  required under this Mortgage, or if it shall fail to pay any other
charge or fee  described in this  Mortgage  (other than any such  amounts  being
contested in accordance  with Section  2.3(a)  above),  then the Lender,  at its
option,  may pay or procure the same.  The Mortgagor  will  reimburse the Lender
upon demand for any sums of money paid by the Lender  pursuant to this  Section,
together  with  interest on each such payment at the Default Rate (as defined in
Section 5.8 hereof) and all such sums and interest  thereon  shall be secured by
this Mortgage.

2.5  ADDITIONAL  DOCUMENTS.  The Mortgagor  agrees to execute and deliver to the
Lender, concurrently with the execution of this Mortgage and upon the request of
the Lender  from time to time  hereafter,  all  financing  statements  and other
documents  reasonably  required to perfect and maintain  the  security  interest
created by this Mortgage. The Mortgagor irrevocably (as long as the Loan remains
unpaid)  makes,  constitutes  and  appoints  the  Lender as the true and  lawful
attorney of the Mortgagor to sign the name of the Mortgagor (after the Mortgagor
has failed or refused  to timely  execute  such  documents  upon  request of the
Lender) on any  financing  statement,  continuation  of  financing  statement or
similar document required to perfect or continue such security interests.

2.6  TRANSFER  OF  PROPERTY.  Except  as  specifically  provided  in the  Credit
Agreement, Mortgagor shall not sell, convey, transfer, lease or further encumber
any  interest in or any part of the  Property,  except to  incorporate  tangible
personalty  into the  Improvements  or to replace such with goods of quality and
value at least  equal to that  replaced  without  the prior  written  consent of
Lender.  If any  person  should  obtain any  interest  in all or any part of the
Property pursuant to the execution or enforcement of any lien, security interest
or other right,  whether superior,  equal or subordinate to this Mortgage or the
lien of this Mortgage, such event shall be deemed to be a transfer by Mortgagor.
Mortgagor shall not, without the prior written consent of Lender, further assign
the rents  from the  Property,  nor  enter,  terminate  or  cancel,  accept  the
surrender,  subordinate,  accelerate the payment of rent, or change the terms of
any renewal  option of any lease now or hereafter  covering such property or any
part of the Property.

2.7 FEES AND EXPENSES.  The  Mortgagor  will pay or reimburse the Lender for all
reasonable  attorneys'  fees,  costs and expenses  incurred by the Lender in any
action, legal proceeding or dispute of any kind which affects the Guaranty,  the
interest  created in this Mortgage,  the Property,  the Rents and Profits or the
Intangible  Personalty,  including but not limited to, any  foreclosure  of this
Mortgage,  enforcement  of  payment of the  Guaranty,  any  condemnation  action
involving the Property,  appraisals, title matters, or any action to protect the
security of this Mortgage.  Any such amounts paid by the Lender shall be due and
payable upon demand and shall be secured by this Mortgage.

2.8 PERFORMANCES  UNDER LEASES AND OTHER AGREEMENTS.  Without first obtaining on
each  occasion  the written  approval of the Lender,  the  Mortgagor  shall not,
except  as may be  permitted  by the  Credit  Agreement,  cancel,  surrender  or
materially  modify or  permit  the  cancellation  of any  lease  (including  any
equipment lease),  rental agreement,  management contract,  franchise agreement,
construction contract,  technical services agreement or other contract,  license
or permit now or hereafter  affecting the Property,  or materially modify any of
said  instruments,  or  accept  or  permit  to be made,  any  prepayment  of any
installment  of  rent  or fees  under  said  instruments  except  to the  extent
permitted in this Mortgage.  The Mortgagor shall faithfully keep and perform, or
cause to be kept and performed, all of the covenants, conditions, and agreements
contained in each of said instruments, now or hereafter existing, on the part of
the Mortgagor to be kept and performed  (including  performance of all covenants
to be performed by or on the behalf of Mortgagor under any and all leases of the
Property  or any part of the  Property)  and  shall at all  times do all  things
necessary  and  appropriate  to compel  performance  by each other party to said
instruments of all obligations,  covenants and agreements by such other party to
be performed under such obligations, covenants and agreements. Each lease of any
part of the  Property is subject to the Lender's  prior  written  approval,  and
certified copies of each such approved Lease shall be submitted to the Lender as
soon as possible.

2.9  PREPAYMENT OF RENT. The Mortgagor will not accept any prepayment of rent or
installments  of rent more  than two (2)  months in  advance  without  the prior
written consent of the Lender.

2.10  MAINTENANCE  OF  PROPERTY.  The  Mortgagor  will abstain from and will not
permit the  commission  of waste in or about the Property and will  maintain the
Property in good condition and repair,  reasonable  wear and tear excepted.  The
Mortgagor shall not remove, demolish, materially alter, or materially change the
use of any building,  structure or other  improvement  presently or hereafter on
the Property without the prior written consent of the Lender.

2.11  IDENTITIES OF MORTGAGOR AND BORROWER.  The Mortgagor  acknowledges  to the
Lender that (i) the identity of the  Mortgagor  and  Borrower and the  expertise
available  to the  Mortgagor  and  Borrower  were and  continue  to be  material
circumstances  upon which the Lender has relied in  connection  with,  and which
constitute  valuable  consideration  to the Lender  for,  the  extending  to the
Borrower of the  indebtedness  evidenced by the Note and (ii) any change in such
identity or expertise could materially impair or jeopardize the security for the
payment  of the Note  granted  to the  Lender by this  Mortgage.  The  Mortgagor
covenants  and  agrees  with the  Lender  that the  Mortgagor  shall  not  sell,
transfer,  convey,  mortgage,  encumber,  lease  or  otherwise  dispose  of  the
Property,  or any part of the Property or any interest in the Property or engage
in subordinate  financing  with respect to the Property  during the term of this
Mortgage  without  the prior  written  consent of the  Lender,  except as may be
expressly  permitted in Article III of this Mortgage or in the Credit Agreement.
In addition, during the term of this Mortgage, except as provided in Article III
of this Mortgage,  or except as may be provided in the Credit  Agreement,  there
shall not be any change in the ownership, membership or control of the Mortgagor
unless the Lender in its sole discretion has given its approval.

2.12  COMPLIANCE  WITH LAW. The Mortgagor will do, or cause to be done, all such
things as may be required by law in order fully to protect the  security and all
rights of the  Lender  under this  Mortgage.  The  Mortgagor  shall not cause or
permit the lien of this Mortgage to be impaired in any way.

2.13  INSPECTION.  The Mortgagor will permit the Lender,  or its agents,  at all
reasonable  times to enter and pass through or over the property for the purpose
of inspecting same.

2.14 AMOUNT OF LOAN.  The  Mortgagor,  upon ten (10) days prior written  notice,
shall  furnish to the Lender a written  statement,  duly  acknowledged,  setting
forth or  confirming  the unpaid  principal  of, and  interest  on, the Loan and
whether  or not any  offsets  or  defenses  exist  against  such  principal  and
interest.

2.15 RELEASES AND WAIVERS. The Mortgagor agrees that no release by the Lender of
any of the  Mortgagor's  successors  in title  from  liability  on the Loan,  no
release by the Lender of any portion of the  Property,  the Rents and Profits or
the Intangible Personalty,  no subordination of lien, no forbearance on the part
of the Lender to collect on the Loan,  or any part of the Loan, no waiver of any
right  granted or remedy  available  to the  Lender and no action  taken nor not
taken by the Lender  shall in any way  diminish the  Mortgagor's  or  Borrower's
obligation  to the  Lender or have the  effect of  releasing  the  Mortgagor  or
Borrower,   or  any   successor  to  the   Mortgagor  or  Borrower,   from  full
responsibility to the Lender for the complete discharge of each and every of the
obligations  secured by this Mortgage or under the Note, the Credit  Agreement ,
the Guaranty or any other Loan Document.

2.16 AFTER  ACQUIRED  PROPERTY.  The lien of this  Mortgage  will  automatically
attach, without further act, to all after acquired property located in or on, or
attached  to,  or used or  intended  to be used in  connection  with or with the
operation  of, the Property or any part of the  Property,  and  Mortgagor  shall
execute any documents and instruments upon demand of Lender necessary to perfect
any such liens.

2.17     INSURANCE.

(a) Liability: The Mortgagor covenants to maintain or cause to be maintained, by
the  Mortgagor,  general  accident and public  liability  insurance  against all
claims for bodily injury,  death or property damage  occurring upon, in or about
any part of the  Property.  The policies  must be from  companies and in amounts
satisfactory to the Lender.

(b) Permanent:  The Mortgagor covenants to maintain or cause to be maintained an
"all-risk"  permanent  insurance  policy.  The  policy  must be  from a  company
satisfactory to the Lender, must be in an amount satisfactory to the Lender, can
only include  coinsurance  provisions  satisfactory to the Lender,  must include
provisions  for a minimum  30-day  advance  written  notice to the Lender of any
intended policy  cancellation  or non-renewal,  and must designate the Lender as
mortgagee and loss payee in a standard  mortgagee  endorsement,  as its interest
may appear.

(c) Business  Interruption:  The Mortgagor  covenants to maintain or cause to be
maintained business interruption  insurance as to the buildings now or hereafter
comprising a part of the  Property.  The policy must be from a company and in an
amount satisfactory to the Lender and must be in an amount adequate to cover the
actual loss from business  interruption  or cessation of rent for a period of at
least fifteen (15) months.

(d) Flood: If any part of the Improvements is located in an area having "special
flood hazards",  a flood insurance policy naming the Lender as mortgagee must be
submitted  to the  Lender.  The policy  must be from a company  and in an amount
satisfactory to the Lender.

(e) Delivery of Policies and Renewals:  The  Mortgagor  agrees to deliver to the
Lender,  as  additional  security for the Loan,  the  original  policies of such
insurance as is required by the Lender pursuant to subsections  (a), (b) and (c)
of this Mortgage and of any additional  insurance  which shall be taken out upon
the Property  while any part of the Loan shall remain  unpaid.  Renewals of such
policies  shall be so  delivered  at least  thirty  (30)  days  before  any such
insurance shall expire.  In the event the Mortgagor fails to maintain  insurance
as  required  under this  Mortgage  the  Lender  has the right to  procure  such
insurance  whether or not the  Mortgagor's  failure to maintain  such  insurance
constitutes  an Event of Default  (as  defined  in  Article  III) or an event or
condition  which,  upon the giving of notice or the  passage  of time,  or both,
would  constitute  an Event of  Default.  Any  amounts  paid by the  Lender  for
insurance  shall be due and  payable  to the  Lender  upon  demand  and shall be
secured by this Mortgage.

(f) Proof of Loss; Claims Settlement:  In the event of loss, the Mortgagor shall
give prompt notice of such loss to the insurance carrier and the Lender, and the
Lender may make proof of loss if not made promptly by  Mortgagor.  The Lender is
authorized,  in its sole  discretion,  to adjust,  compromise  and  collect  the
proceeds of any insurance claims.

(g) Use of Proceeds:  The Mortgagor  assigns the proceeds of any such  insurance
policies to the Lender and directs and authorizes each insurance company to make
payment for such loss  directly to the Lender.  The proceeds of any insurance or
any part of such  insurance  are to be applied by the Lender to  restoration  or
repair of the property damaged provided the following conditions are met:

(i)               there  exists no Event of Default (as defined in Article  III)
                  or any event or condition which,  upon the giving of notice or
                  the passage of time,  or both,  would  constitute  an Event of
                  Default;

(ii)              the Mortgagor presents  sufficient evidence to the Lender that
                  there are  sufficient  funds from the  insurance  proceeds and
                  from equity funds, if needed, to completely  restore or repair
                  the damaged  Property  within 180 days, as well as to maintain
                  relevant debt service coverages and other operating expenses;

(iii)             all parties having existing or expected  possessory  interests
                  in the Property agree in a manner  satisfactory  to the Lender
                  that  they  will  continue  or  extend  their   interests  and
                  arrangements  for the contract terms then in effect  following
                  the restoration or repair;

(iv)              all  parties   having   operating,   management  or  franchise
                  interests in, and arrangements concerning,  the Property agree
                  that they will continue their interests and  arrangements  for
                  the contract terms then in effect following the restoration or
                  repair;

(v)               the  Mortgagor presents sufficient evidence to the Lender that
                  the  damaged  property  will be restored prior to the maturity
                  date of the Loan;

(vi)              the  Lender  will not incur any liability to any other  person
                  as a result of such use or  release  of insurance proceeds;

(vii)             the  insurance  proceeds  shall  be  held  by the  Lender  and
                  disbursed  substantially  in accordance with the  disbursement
                  procedures  under the Loan  Agreement as if such proceeds were
                  Loan proceeds as repair or restoration progresses;

If the conditions of Sections  2.17(g) (ii),  (iii),  (iv), (v) and (vi) are not
satisfied  within ninety (90) days of loss,  then the Lender may, at its option,
apply any insurance proceeds to the outstanding balance of the Loan.

2.18     EMINENT DOMAIN.

(a) Participation in Proceedings:  Mortgagor shall promptly notify the Lender of
any actual or threatened  initiation of any eminent domain  proceeding as to any
part of the  Property  and shall  deliver  to the  Lender  copies of any and all
papers served or received in connection  with such  proceedings,  and the Lender
shall have the right, at its option,  to participate in such  proceedings at the
expense of Mortgagor  (including,  without  limitation,  the Lender's attorneys'
fees) and  Mortgagor  will execute such  documents  and take such other steps as
required to permit such participation.

(b) Right to Settle Claims:  The Lender is authorized to adjust,  compromise and
collect any eminent  domain award or settle a claim for damages and to apply the
same to the  outstanding  balance  of the Loan,  subject  to the  provisions  of
subsection (c).

(c) Use of Proceeds:  The Mortgagor assigns to the Lender any proceeds or awards
which may become due by reason of any  condemnation  or other  taking for public
use of the whole or any part of the  Property or any rights  appurtenant  to the
Property. The proceeds of any such condemnation award or proceeds or any part of
such  proceeds  may be applied by the Lender to the  outstanding  balance of the
Loan; provided that, subject to the provisions of Section 2.18(d), such proceeds
may be applied to restoration of the property taken if the following  conditions
are met:

(i)               there  exists no Event of Default (as defined in Article  III)
                  or any event or condition which,  upon the giving of notice or
                  the passage of time,  or both,  would  constitute  an Event of
                  Default;

(ii)              the Mortgagor presents  sufficient evidence to the Lender that
                  (A) there are sufficient funds from the condemnation  award or
                  proceeds  and from  equity  funds,  if needed,  to  completely
                  restore the Property to an architectural whole within 180 days
                  as well as to maintain  relevant  debt service  coverages  and
                  other  operating  expenses,  and (B) the loss of the  property
                  taken will not materially diminish the value of the Property;

(iii)             all parties having existing or expected  possessory  interests
                  in the Property  (excluding  resident apartment tenants) agree
                  in a manner satisfactory to the Lender that they will continue
                  or extend their  interests and  arrangements  for the contract
                  terms then in effect following the restoration;

(iv)              all  parties   having   operating,   management  or  franchise
                  interests in, and arrangements concerning,  the Property agree
                  that they will continue their interests and  arrangements  for
                  the contract terms then in effect following the restoration;

(v)               the Mortgagor presents sufficient evidence to the Lender  that
                  the  Property will be restored to an architectural whole prior
                  to the maturity date of the Loan;

(vi)              the  Lender will not incur any liability  to any other  person
                  as a result of such use or  release  of proceeds;

(vii)             the condemnation award or proceeds shall be held by the Lender
                  and   disbursed   substantially   in   accordance   with   the
                  disbursement  procedures  under the Loan  Agreement as if such
                  proceeds were Loan proceeds as restoration progresses.

(d) Further  Assignments;  Acceleration.  The  Mortgagor  agrees to execute such
further  assignments and agreements as may be reasonably  required by the Lender
to assure  the  effectiveness  of this  Section.  In the event any  governmental
agency or authority shall require or commence any proceedings for the demolition
of any  buildings  or  structures  comprising a part of the  Property,  or shall
commence any  proceedings  to condemn or otherwise take pursuant to the power of
eminent  domain a material  portion of the  Property,  the  Lender  may,  at its
option, declare the Loan to be immediately due and payable in full and apply any
condemnation awards or proceeds to the outstanding balance of the Loan.

2.19  OPERATING  STATEMENTS.  The Mortgagor will maintain full and correct books
and records showing in detail the earnings and expenses of the Property and will
permit the Lender and its  representatives to examine said books and records and
all  supporting  vouchers  and  data at any  time  and  from  time to time  upon
reasonable  request by the Lender.  Upon reasonable  request of the Lender,  the
Mortgagor  will also  submit to the Lender  statements  of income  and  expenses
accurately  setting forth the operation of its interest in the Property for each
fiscal year. Such  statements  shall be in such form and forms as are acceptable
to the Lender and certified by the chief financial officer of the Mortgagor.  If
the Mortgagor shall have obtained a financial statement certified by a certified
public accountant for any fiscal year, the Mortgagor agrees to furnish a copy of
such certified statement to the Lender.  Also, when so requested,  the Mortgagor
will  submit to the  Lender  rent  schedules  showing  occupied  units or spaces
classified  by size or type,  rents per month per unit or space and vacant units
or spaces and proposed rents from such units or spaces.

2.20 FINANCIAL STATEMENTS. Mortgagor shall cause Borrower to provide Lender with
financial statements and information in accordance with the Credit Agreement.

2.21  ENVIRONMENTAL  INDEMNIFICATION.  Mortgagor  agrees to  indemnify  and hold
Lender harmless from and against,  and to reimburse  Lender with respect to, any
and all claims, demands, causes of action, loss, damage, liabilities,  costs and
expenses (including reasonable attorney's fees and court costs) of any and every
kind or character,  known or unknown,  fixed or contingent  asserted  against or
incurred by Lender at any time and from time to time by reason of or arising out
of any violation of any  environmental  laws and any and all matters arising out
of any act,  omission,  event or circumstance  existing or occurring  (including
without  limitation the presence on the Property or release from the Property of
hazardous  substances  or  solid  waste  disposed  of  or  otherwise  released),
regardless of whether the act,  omission,  event or  circumstance  constituted a
violation of any  Environmental  Law at the time of its existence or occurrence.
The terms "hazardous  substance" and "release" shall have the meanings specified
in CERCLA,  and the terms "solid waste" and  "disposed"  shall have the meanings
specified in RCRA; provided, in the event either CERCLA or RCRA is amended so as
to broaden the meaning of any term defined  thereby,  such broader meaning shall
apply  subsequent to the effective date of such amendment and provided  further,
to the extent the laws of the State of South  Carolina  establish  a meaning for
"hazardous  substance," "release," "solid waste," or "disposal" which is broader
than that specified in either CERCLA or RCRA,  such broader meaning shall apply.
The  provisions of this Section shall survive the  satisfaction  of the Note and
the other  indebtedness  secured  hereby and shall  continue  thereafter in full
force and effect.

2.22 ACCESS ONTO PROPERTY.  Lender and its successors and assigns are granted an
easement to enter and to  authorize  others to enter upon the  Property  for the
purpose of conducting environmental  investigations and audits (including taking
physical  samples)  and such other action  deemed  necessary by Lender to verify
compliance by Mortgagor with all environmental laws. Mortgagor acknowledges that
no adequate  remedy at law exists for violation of the easement  granted in this
Mortgage  and agrees that Lender is  entitled  to  specific  performance  of the
rights under this easement. The easement granted in this Mortgage shall continue
until this Mortgage is canceled or released of record.

2.23 ENVIRONMENTAL INVESTIGATIONS.  If Lender shall ever have reasons to believe
that any  Hazardous  Materials  have been  used,  stored or  disposed  of on the
Property in violation of the covenants and representations in this Mortgage,  or
if  Lender  in its  reasonable  discretion  is  dissatisfied  with  the  ongoing
investigation  and  remediation  of the  Property,  or if any  claim  is made or
threatened  by any party  against  Mortgagor  or  Borrower  relating to damages,
contribution,  cost,  recovery,  compensation,  loss or injury  related  to use,
storage and disposal of Hazardous Materials in connection with the Property,  or
if an Event of Default has occurred, Mortgagor and/or Lender will at its expense
provide to Lender  from time to time and in each case within 30 days of Lender's
request,   an  investigation  and  audit  of  the  Property  and  Borrower's  or
Mortgagor's  business  operations,  relating to the existence,  use,  storage or
disposal of Hazardous  Materials,  the scope of which will be defined by Lender,
by a consulting  firm  acceptable to Lender and made in  accordance  with Bank's
established guidelines. Lender may cause such investigation and audit to be made
at Borrower's and Mortgagor's expense and risk if Mortgagor or Borrower fails to
promptly comply with its obligation to do so at Lender's  request.  For purposes
of this Mortgage, the term "Hazardous Material" shall mean all materials defined
as hazardous  wastes or substances  under any  environmental  law and petroleum,
petroleum products, oil and asbestos.

                                  ARTICLE III
                                EVENTS OF DEFAULT

3.1  EVENTS OF  DEFAULT.  An  "Event  of  Default"  shall be the  occurrence  or
existence  of  any of the  events  or  conditions  described  in the  subsequent
sections of this Article III:

3.2 PAYMENT.  Failure to pay when due any  installment  of principal or interest
due on the Note or any of the other Loan  Documents  or any other  amounts  that
become due and owing to the Lender under the Loan Documents.

3.3 LOAN  DOCUMENTS.  The  occurrence  of any Event of Default as defined in the
Credit Agreement,  or a failure to comply with any of the terms of this Mortgage
or any of the other Loan  Documents,  or a default under any other Loan Document
beyond any applicable cure period.

3.4 REPRESENTATIONS. The invalidity or inaccuracy of any material representation
or opinion or the breach, withdrawal,  cancellation,  rescission, termination or
alteration of any material agreement,  approval,  opinion or waiver submitted to
the Lender.

3.5  ENCROACHMENTS.  The  appearance  on any  survey  required  under the Credit
Agreement of easements or encroachments  which have occurred without the written
approval  of the Lender and which are not removed or  corrected  within ten (10)
business days after written  notice of such  easements or  encroachments  to the
Mortgagor.

3.6 PERMITS. The Mortgagor neglects, fails, or refuses to keep in full force and
effect (a) any permit or approval with respect to the  construction,  occupation
or use of the Property or (b) the hazard and liability  insurance required under
this Mortgage.

3.7 LIENS AND  ENCUMBRANCES.  The Mortgagor  fails to keep the Property free and
clear  of all  encumbrances,  liens,  deeds of  trust,  security  interests  and
subordinate financing,  except for Permitted Encumbrances or as otherwise may be
approved in writing by the Lender in its sole discretion, and in the case of any
consensual   encumbrances,   liens,  deeds  of  trust,   security  interests  or
subordinate financing, such written approval to be obtained in advance.

3.8 OWNERSHIP. Except as may otherwise be permitted by the Credit Agreement, any
change in the  ownership or control of the  Mortgagor or any other  guarantor of
the Loan (a "Guarantor") or any sale, transfer or conveyance,  whether voluntary
or  involuntary,  of the Property any portion of the Property,  except as may be
approved in writing in advance by the Lender in its sole discretion.

3.9 VOLUNTARY  BANKRUPTCY.  A voluntary  petition is filed by the Borrower,  the
Mortgagor or any Guarantor of the Loan seeking the  protection of the bankruptcy
court under any chapter or section of the Bankruptcy Code, as amended, or of any
state or federal court under state insolvency or receivership laws.

3.10 INVOLUNTARY BANKRUPTCY. The Borrower, the Mortgagor or any Guarantor of the
Loan has an  involuntary  petition filed against it under any chapter or section
of the Bankruptcy Code, as amended,  or under any state insolvency laws and such
petition  is not  dismissed  within  forty-five  (45) days of its  filing.  3.11
RECEIVERSHIP.  By the order of a court of competent  jurisdiction,  a trustee or
receiver of the Property,  the Rents and Profits or the Intangible Personalty or
any part of the Property, the Rents and Profits or the Intangible Personalty, or
of the  Mortgagor  or Borrower  shall be  appointed  and, if such order does not
arise  out  of  a  voluntary  receivership  action  instituted  by  Borrower  or
Mortgagor,  such order shall not be  discharged or dismissed  within  forty-five
(45) days.

3.12 DISSOLUTION. The suspension or dissolution of any Guarantor of the Loan and
Borrower  fails to  provide a  substitute  Guarantor  or  substitute  collateral
acceptable to the Lender  within sixty (60) days of the date of such  suspension
or dissolution.

3.13 EVENT OF DEFAULT UNDER ANY OTHER OBLIGATION.  The occurrence of an event of
default under any obligation  from Borrower or Mortgagor now owing to the Lender
or hereafter arising.

                                   ARTICLE IV
                        RIGHTS AND REMEDIES OF THE LENDER

4.1  ACCELERATION  OF  LOAN;  FORECLOSURE.  Upon the  occurrence  of an Event of
Default the entire balance of the Loan,  including all accrued interest,  shall,
at the option of the Lender, become immediately due and payable. Upon failure to
pay the Loan in full at any  stated or  accelerated  maturity,  the  Lender  may
foreclose  the lien of this  Mortgage  pursuant to judicial  proceeding  or such
other manner permitted under law.

4.2 LENDER'S POWER OF  ENFORCEMENT.  If an Event of Default shall have occurred,
Lender may, either with or without entry or taking  possession as provided above
or  otherwise,  proceed  by suit or suits at law or in  equity  or by any  other
appropriate  proceeding  or remedy:  (a) to  enforce  payment of the Note or the
performance  of any term of this  Mortgage or any other right;  (b) to foreclose
this Mortgage and to 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;  and (c) to pursue any other remedy  available to it. Lender 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 Lender may determine.

4.3      LENDER'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE, AND APPLY INCOME.

(a) If an Event of  Default  shall  have  occurred,  Mortgagor,  upon  demand of
Lender, shall forthwith surrender to Lender the actual possession, and if and to
the extent permitted by law, Lender itself,  or by such officers or agents as it
may appoint, may enter and take possession of all the Property,  and may exclude
Mortgagor  and its agents and employees  wholly from the Property,  and may have
joint access with Mortgagor to the books, papers and accounts of Mortgagor.

(b) If Mortgagor  shall for any reason fail to surrender or deliver the Property
or any part of the Property after Lender's demand,  Lender may obtain a judgment
or decree  conferring  on Lender the right to immediate  possession or requiring
Mortgagor  to deliver  immediate  possession  of all or part of the  Property to
Lender along with all books,  papers and accounts of Mortgagor,  to the entry of
which judgment or decree Mortgagor specifically consents.

(c)  Mortgagor  shall pay to  Lender,  upon  demand,  all  reasonable  costs and
expenses of obtaining  such judgment or decree and  reasonable  compensation  to
Lender, its attorneys and agents, and all such costs,  expenses and compensation
shall, until paid, be secured by the lien of this Mortgage.

(d) Upon  every such  entering  upon or taking of  possession,  Lender may hold,
store, use, operate, manage and control the Property and conduct the business of
the Property, and, from time to time:

(i)  make all necessary and proper maintenance, repairs, renewals, replacements,
     additions, betterments and improvements to the Property and on the Property
     and purchase or otherwise acquire additional fixtures, personalty and other
     property;

(ii) insure or keep the Property insured;

(iii)manage and operate the  Property  and exercise all the rights and powers of
     Mortgagor in its name or otherwise, with respect to the same;

(iv) enter into  agreements with others to exercise the powers granted Lender in
     this Mortgage;

all as Lender in its reasonable  judgment from time to time may  determine;  and
Lender may  collect and receive  all the  income,  revenues,  rents,  issues and
profits  of the  same,  including  those  past  due as  well as  those  accruing
thereafter; and shall apply the monies so received by Lender in such priority as
Lender  may  determine  to  (1)  the  reasonable   compensation,   expenses  and
disbursements  of the agents and  attorneys;  (2) the cost of insurance,  taxes,
assessments  and  other  proper  charges  upon the  Property  or any part of the
Property; (3) the deposits for taxes and assessments and insurance premiums due;
and (4) the  payment of  accrued  interest  on the Note and then to  outstanding
principal thereunder.

         Lender shall  surrender  possession  of the Property to Mortgagor  only
when  all  that is due  upon  such  interest,  tax and  insurance  deposits  and
principal installments,  and under any of the terms of this Mortgage, shall have
been paid and all  defaults  made  good.  The same  right of taking  possession,
however,  shall  exist if any  subsequent  Event of Default  shall  occur and be
continuing.

4.4 LEASES.  Lender,  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 Lender to collect the sums secured by
this  Mortgage  or  to  collect  any  deficiency   remaining  unpaid  after  the
foreclosure sale of the Property.

4.5 PURCHASE BY LENDER.  Upon any such foreclosure  sale, Lender may bid for and
purchase the Property 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.

4.6 APPLICATION OF INDEBTEDNESS TOWARD PURCHASE PRICE. Upon any such foreclosure
sale,  Lender 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 charge,  in paying the purchase price apply
any portion of or all sums due to Lender  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 upon such sale.

4.7 WAIVER OF APPRAISEMENT,  VALUATION,  STAY,  EXTENSION,  AND REDEMPTION LAWS.
MORTGAGOR AGREES TO THE FULL EXTENT PERMITTED BY LAW THAT IN CASE OF AN EVENT OF
DEFAULT ON ITS PART UNDER THIS MORTGAGE,  NEITHER  MORTGAGOR NOR ANYONE CLAIMING
THROUGH OR UNDER IT SHALL OR WILL SET UP, CLAIM OR SEEK TO TAKE ADVANTAGE OF ANY
APPRAISEMENT,  VALUATION, STAY, EXTENSION OR REDEMPTION LAWS NOW OR HEREAFTER IN
FORCE,  IN ORDER TO PREVENT OR HINDER THE  ENFORCEMENT  OR  FORECLOSURE  OF THIS
MORTGAGE, OR THE ABSOLUTE SALE OF THE PROPERTY OR THE FINAL AND ABSOLUTE PUTTING
INTO POSSESSION OF THE PROPERTY,  IMMEDIATELY AFTER SUCH SALE, OF THE PURCHASERS
AT SUCH  SALE,  AND  MORTGAGOR,  FOR  ITSELF  AND ALL WHO MAY AT ANY TIME  CLAIM
THROUGH OR UNDER IT, WAIVES,  TO THE FULL EXTENT THAT IT MAY LAWFULLY SO DO, THE
BENEFIT  OF ALL SUCH LAWS,  AND ANY AND ALL RIGHT TO HAVE THE ASSETS  COMPRISING
THE  MORTGAGED  PROPERTY  MARSHALED  UPON  ANY  FORECLOSURE  OF THE LIEN OF THIS
MORTGAGE  AND AGREES THAT LENDER OR ANY COURT HAVING  JURISDICTION  TO FORECLOSE
SUCH LIEN MAY SELL THE PROPERTY IN PART OR AS AN ENTIRETY.

4.8 RECEIVER. If an Event of Default shall have occurred,  Lender, to the extent
permitted by law and without  regard to the value or occupancy of the  security,
shall be entitled as a matter of right if it so elects to the  appointment  of a
receiver to enter upon and take  possession  of the  Property and to collect all
rents, revenues,  issues, income, products and profits of the Property and apply
the same as the court may direct.  The receiver shall have all rights and powers
permitted  under the laws of the state  where the Land is located and such other
powers  as the  court  making  such  appointment  shall  confer.  The  expenses,
including  receiver's fees,  attorney's  fees,  costs and agent's  compensation,
incurred  pursuant to the powers  contained in this Mortgage shall be secured by
this  Mortgage.  The right to enter  and take  possession  of and to manage  and
operate  the  Property,  and to  collect  the rents,  issues and  profits of the
Property,  whether by a receiver or otherwise,  shall be cumulative to any other
right or remedy  under this  Mortgage or afforded by law,  and may be  exercised
concurrently  with any other right or remedy under this  Mortgage or afforded by
law or  independently  of any  other  right or remedy  under  this  Mortgage  or
afforded by law.  Lender shall be liable to account only for such rents,  issues
and profits  actually  received  by Lender,  whether  received  pursuant to this
Paragraph or Paragraph 4.3.  Notwithstanding  the appointment of any receiver or
other  custodian,  Lender shall be entitled as secured party under this Mortgage
to the possession and control of any cash, deposits,  or instruments at the time
held by, or payable or deliverable under the terms of this Mortgage to, Lender.

4.9 SUITS TO PROTECT THE PROPERTY.  Lender shall have the power and authority to
institute and maintain any suits and  proceedings  as Lender may deem  advisable
(a) to prevent any  impairment of the Property by any acts which may be unlawful
or any  violation of this  Mortgage,  (b) to preserve or protect its interest in
the Property,  and (c) to restrain the  enforcement  of or  compliance  with any
legislation  or  other  governmental  enactment,  rule  or  order  that  may  be
unconstitutional  or otherwise invalid, if the enforcement of or compliance with
such  enactment,  rule or order might impair the security under this Mortgage or
be prejudicial to Lender's interest.

4.10 PROOFS OF CLAIM. In the case of any receivership,  insolvency,  bankruptcy,
reorganization,   arrangement,   adjustment,   composition   or  other  judicial
proceedings  affecting  Mortgagor  or  Borrower,  any  person,   partnership  or
corporation   guaranteeing   or  endorsing  any  of  Mortgagor's  or  Borrower's
obligations,  its creditors or its property,  Lender, to the extent permitted by
law,  shall be entitled to file such proofs of claim and other  documents as may
be  necessary  or  advisable  in  order  to  have  its  claims  allowed  in such
proceedings for the entire amount due and payable by Borrower under the Note, or
by  Mortgagor  under the  Guaranty  or this  Mortgage  and any other  instrument
securing the Note, at the date of the institution of such  proceedings,  and for
any additional amounts which may become due and payable by Borrower or Mortgagor
after such date.

4.11  MORTGAGOR TO PAY  INDEBTEDNESS  UNDER  GUARANTY ON ANY DEFAULT IN PAYMENT:
APPLICATION OF MONIES BY LENDER.

(a) If  default  shall be made in the  payment of any amount due under the Note,
this Mortgage or any other  instrument  securing the Note,  then,  upon Lender's
demand,  Mortgagor will pay to Lender the whole amount due and payable under the
Guaranty and all other sums  secured by this  Mortgage;  and if Mortgagor  shall
fail to pay the same forthwith upon such demand, Lender shall be entitled to sue
for and to recover judgment for the whole amount so due and unpaid together with
costs  and  expenses  including  the  reasonable   compensation,   expenses  and
disbursements of Lender's agents and attorneys  incurred in connection with such
suit and any appeal in  connection  with such suit,  Lender shall be entitled to
sue and  recover  judgment  as  aforesaid  either  before,  after or during  the
pendency of any proceedings, for the enforcement of this Mortgage, and the right
of  Lender  to  recover  such  judgment  shall not be  affected  by any  taking,
possession or foreclosure  sale under this  Mortgage,  or by the exercise of any
other right,  power or remedy for the enforcement of the terms of this Mortgage,
or the foreclosure of the lien of this Mortgage.

(b) In case of a foreclosure  sale of all or any part of the Property and of the
application  of the  proceeds of sale to the payment of the sums secured by this
Mortgage,  Lender  shall be  entitled  to enforce  payment of and to receive all
amounts then remaining due and unpaid and to recover judgment for any portion of
such amounts remaining unpaid, with interest.

(c) Mortgagor  agrees,  to the extent  permitted by law, that no recovery of any
such judgment by Lender and no  attachment or levy of any execution  upon any of
the  Property  or any other  property  shall in any way  affect the lien of this
Mortgage  upon the  Property or any part of the  Property  or any lien,  rights,
powers or remedies of Lender under this Mortgage,  but such lien, rights, powers
and remedies shall continue unimpaired as before.

(d)  Any monies  collected or received by Lender under this Paragraph 4.11 shall
     be applied as follows:

     (i)  First,  to  the  payment  of  reasonable  compensation,  expenses  and
          disbursements of the agents and attorneys; and

          (ii) Second, to payment of amounts due and unpaid under the Note, this
               Mortgage and all other instruments securing the

          (iii)Third,  to the payment of any amounts due on account of any other
               indebtedness hereby secured; and

          (iv) Fourth,   to  the  Mortgagor  or  whomsoever   the  Lender  shall
               reasonably determine to be lawfully entitled thereto.

4.12 DELAY OR  OMISSION  NO  WAIVER.  No delay or  omission  of Lender or of any
holder of the Note to  exercise  any right,  power or remedy  accruing  upon any
Event of Default  shall  exhaust or impair  any such  right,  power or remedy or
shall  be  construed  to waive  any  such  Event  of  Default  or to  constitute
acquiescence.  Every  right,  power and remedy  given to Lender may be exercised
from time to time and as often as may be deemed expedient by Lender.

4.13 NO  WAIVER OF ONE  DEFAULT  TO  AFFECT  ANOTHER.  No waiver of any Event of
Default  under this  Mortgage  shall extend to or affect any  subsequent  or any
other Event of Default then existing,  or impair any rights,  powers or remedies
consequent thereon. If Lender (a) grants forbearance or an extension of time for
the payment of any sums secured by this Mortgage;  (b) takes other or additional
security for the payment of such sums; (c) waives or does not exercise any right
granted  in the Note,  this  Mortgage,  the  Guaranty  or any  other  instrument
securing the Note;  (d) releases any part of the Property  from the lien of this
Mortgage or any other  instrument  securing the Note; (e) consents to the filing
of any map or plat of the Land;  (f) consents to the granting of any easement on
the Land; or (g) makes or consents to any  agreement  changing the terms of this
Mortgage or subordinating  the lien or any charge of this Mortgage,  no such act
or omission  shall  release,  discharge,  modify,  change or affect the original
liability under the Note,  this Mortgage,  the Guaranty or otherwise of Borrower
or  Mortgagor,  or any  subsequent  purchaser of the Property or any part of the
Property or any maker, cosigner,  endorser,  surety or Guarantor. No such act or
omission shall  preclude  Lender from  exercising any right,  power or privilege
granted  in this  Mortgage  or  intended  to be  granted in case of any Event of
Default  then  existing or of any  subsequent  Event of Default  nor,  except as
otherwise expressly provided in an instrument or instruments executed by Lender,
shall the lien of this Mortgage be altered by such act or omission. In the event
of the sale or transfer by  operation  of law or otherwise of all or any part of
the Property,  Lender,  without notice to any person,  firm or  corporation,  is
authorized  and  empowered  to deal  with any such  vendee  or  transferee  with
reference to the Property or the indebtedness secured by this Mortgage,  or with
reference to any of the terms or  conditions of this  Mortgage,  as fully and to
the same extent as it might deal with the original  parties to this Mortgage and
without  in  any  way  releasing  or  discharging  any  of  the  liabilities  or
undertakings under this Mortgage.

4.14  DISCONTINUANCE  OF PROCEEDINGS;  POSITION OF PARTIES  RESTORED.  If Lender
shall have  proceeded  to enforce  any right or remedy  under this  Mortgage  by
foreclosure,   entry  or  otherwise,   and  such  proceedings  shall  have  been
discontinued  or  abandoned  for any  reason,  or  shall  have  been  determined
adversely to Lender,  then and in every such case  Mortgagor and Lender shall be
restored to their  former  positions  and rights  under this  Mortgage,  and all
rights,  powers and remedies of Lender shall  continue as if no such  proceeding
had occurred or had been taken.

4.15 REMEDIES  CUMULATIVE.  No right, power or remedy conferred upon or reserved
to Lender by the Note, this Mortgage or any other  instrument  securing the Note
is exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative  and concurrent and shall be in addition to
any other right, power and remedy given under this Mortgage or under the Note or
any other Loan  Document,  or now or hereafter  existing at law, in equity or by
statute.

                                   ARTICLE V
                               GENERAL CONDITIONS

5.1 TERMS.  The singular  used in this  Mortgage  shall be deemed to include the
plural;  the masculine deemed to include the feminine and neuter;  and the named
parties deemed to include their heirs, successors and assigns. The term "Lender"
shall  include  any payee of the  indebtedness  secured by this  Mortgage or any
transferee of such indebtedness whether by operation of law or otherwise.

5.2 NOTICES.  All notices  required to be given under this Mortgage  shall be in
writing  and  shall be deemed  served  at the  earlier  of (i)  receipt  or (ii)
seventy-two  (72) hours after deposit in  registered,  certified or  first-class
United  States  mail,  postage  prepaid,  and  addressed  to the  parties at the
following  addresses,  or  such  other  addresses  as may  from  time to time be
designated by written notice given as required:

                  to the Mortgagor:
                  ----------------

                  Caroline Investors, Inc.
                  c/o Homegold, Inc.
                  3901 Pelham Road
                  Greenville, South Carolina 29615
                  Attention:  William E. Long, Jr.

                  to the Lender:
                  -------------

                  Household Commercial Financial Services, Inc.
                  700 North Wood Dale Drive
                  Building 3A
                  Wood Dale, Illinois  60191
                  Attention:  Robert K. Carse

                  with copy to:
                  ------------

                  McGuireWoods LLP
                  77 West Wacker Drive, Suite 4500
                  Chicago, Illinois  60601
                  Attention: Debra S. Clark, Esq.

The parties agree that any notice sent to the Mortgagor at its address set forth
in this Mortgage (or designated in accordance with this Section) shall be deemed
notice to all general partners of Mortgagor in the event that the Mortgagor is a
general  partnership.  Personal delivery to a party or to any officer,  partner,
agent or employee of such party at its address in this Mortgage shall constitute
receipt. Rejection or other refusal to accept or inability to deliver because of
changed  address of which no notice  has been  received  shall  also  constitute
receipt.  Notwithstanding the foregoing, no notice of change of address shall be
effective until the date of receipt of such change of address.

5.3  IMPOSITION  OF TAX.  In the event of the  passage  of any  state,  federal,
municipal or other  governmental law, order,  rule or regulation,  in any manner
changing or  modifying  the laws now in force  governing  the  taxation of debts
secured by mortgages or the manner of collecting taxes so as to affect adversely
the Lender,  the  Mortgagor  will promptly pay any such tax on or before the due
date of such tax; and if the Mortgagor  fails to make such prompt  payment or if
any such state,  federal,  municipal or other  governmental  law, order, rule or
regulation prohibits Mortgagor from making such payment or would penalize Lender
if Mortgagor  makes such  payment,  then the entire  balance of the Loan and all
amounts due under the  Guarantyshall  become due and payable  upon demand at the
option of the Lender.

5.4  INVALIDATION  OF  PROVISIONS.  Invalidation  of  any  one  or  more  of the
provisions of this Mortgage  shall in no way affect any of the other  provisions
of this Mortgage, which shall remain in full force and effect.

5.5 HEADINGS.  The captions and headings in this Mortgage are inserted only as a
matter of convenience and for reference and in no way define, limit, or describe
the scope of this Mortgage nor the intent of any provision of this Mortgage.

5.6 CHANGES,  ETC.  Neither this  Mortgage nor any term of this  Mortgage may be
changed, waived,  discharged or terminated orally, or by any action or inaction,
but  only  by an  instrument  in  writing  signed  by the  party  against  which
enforcement  of the change,  waiver,  discharge or  termination  is sought.  Any
agreement hereafter made by Mortgagor and Lender relating to this Mortgage shall
be superior to the rights of the holder of any intervening lien or encumbrance.

5.7 GOVERNING  LAW. This Mortgage is made by Mortgagor and accepted by Lender in
the State of South Carolina, with reference to the laws of such State, and shall
be construed,  interpreted, enforced and governed by and in accordance with such
laws (excluding the principles of such laws governing conflicts of law).

5.8 DEFAULT RATE. The term "Default Rate" as used herein shall mean the rate per
annum  determined by adding six percent (6%) to the Domestic Rate (as defined in
the Credit Agreement) from time to time in effect.

5.9 CONFLICT.  In the event of any conflict  between the terms and provisions of
this Mortgage and the terms and conditions of the Loan Agreement, the provisions
of the Loan Agreement shall control.

5.10  WAIVER  OF  JURY  TRIAL  By the  execution  of  this  Mortgage,  Mortgagor
knowingly, voluntarily and intentionally agrees, that:

(a)  Neither   Mortgagor  nor  Lender,   nor  any   assignee,   heir,  or  legal
representative  of Mortgagor or Lender,  shall demand or request a jury trial in
any lawsuit, proceeding, counterclaim, or any other litigation procedure arising
from or based upon this Agreement,  the Note, the Guaranty,  the Mortgage or any
of the Loan Documents  evidencing,  securing, or relating to the Loan, or to the
dealings or  relationship  between or among the parties to this  Agreement,  the
Note,  the  Guaranty,  the  Mortgage  or any of the Loan  Documents  evidencing,
securing, or relating to the Loan;

(b) Neither  Mortgagor or Lender will seek to consolidate  any action in which a
jury trial has been waived  with any other  action in which a jury trial has not
been or cannot be waived;

(c) The  provisions  of this section have been fully  negotiated by the parties,
and these provisions shall be subject to no exceptions;

(d) Neither  Mortgagor nor Lender has in any way agreed with or  represented  to
any other party that the  provisions of this section will not be fully  enforced
in all instances; and

(e)      This provision is a material inducement for Lender to make the Loan.

                                   ARTICLE VI
                               LENDING PROVISIONS

6.1 BREACH OF CREDIT AGREEMENT AND OTHER DOCUMENTS.  Notwithstanding anything to
the contrary contained in this Mortgage or in the Note or in the Guaranty, or in
any other instrument  securing the loan evidenced by such Note, upon an Event of
Default  unless  cured in  accordance  with the terms of the  Credit  Agreement,
Lender  may at its  option  declare  the  entire  indebtedness  secured  by this
Mortgage,  and all interest  thereon and all advances  made by Lender under this
Mortgage,  immediately  due and payable and/or  exercise all  additional  rights
accruing to it under this  Mortgage in the event of a breach by Mortgagor of any
covenant  contained in this  Mortgage or in the  Guaranty,  or in the event of a
breach by  Borrower  of any  covenant  contained  in the Note,  or in the Credit
Agreement,   which  Guaranty  and  Credit  Agreement  are,  by  this  reference,
incorporated  in this  Mortgage to the same extent and effect a though they were
set forth in this  Mortgage in full.  The  proceeds of the Loan  secured by this
Mortgage  are to be  disbursed  by Lender to  Borrower  in  accordance  with the
provisions  contained in the Credit  Agreement.  All  advances and  indebtedness
arising  and  accruing  under the  Credit  Agreement  from time to time shall be
secured by this  Mortgage and all  indebtedness  arising and accruing  under the
Guaranty from time to time shall also be secured by this Mortgage.

6.2 PARTIAL  FORECLOSURE.  In the event the  Mortgaged  Property is comprised of
more than one  parcel of real  property,  Mortgagor  waives any right to require
Lender to  foreclose or exercise  any of its other  remedies  against all of the
Mortgaged Property as a whole or to require Lender to foreclose or exercise such
remedies against one portion of the Mortgaged  Property prior to the foreclosure
of exercise of said remedies against other portions of the Mortgaged Property.

6.3 COVENANTS OF  GUARANTORS.  As a part of the inducement to Lender to make the
loan  evidenced by the Note,  Borrower may have caused  certain  other  persons,
firms or  corporations  to enter into certain  guaranty  agreements  with Lender
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  representation  and
agreements  by the  other  persons  shall  constitute,  for the  purpose  of its
obligations under this Mortgage, covenants on behalf of Mortgagor.

6.4  LIMITATION  ON RECOVERY.  Notwithstanding  anything in this Mortgage to the
contrary,  the right of recovery against the Mortgagor under this Mortgage shall
not exceed  $1.00  less than the  amount  which  would  render  the  Mortgagor's
obligations under this Mortgage void or voidable under applicable law, including
fraudulent conveyance law.

6.5 LIEN ABSOLUTE; NO SUBROGATION. The lien and security interest herein created
and  provided  for stand as direct and primary  security for the Note as well as
for any of the other  obligations  secured  hereby.  No  application of any sums
received by the Lender in respect of the Property or any disposition  thereof to
the  reduction  of the Loan and  other  obligations  secured  hereby or any part
thereof  shall in any  manner  entitle  the  Mortgagor  to any  right,  title or
interest in or to the Loan or other obligations secured hereby or any collateral
or security therefor, or against Borrower,  whether by subrogation or otherwise,
unless and until all Loan and other  obligations  secured hereby have been fully
paid and satisfied  and all  agreements of the Lender to extend credit to or for
the account of the Borrower and to or for the account of Mortgagor  have expired
or otherwise have been terminated.  The Mortgagor acknowledges that the lien and
security interest hereby created and provided for are absolute and unconditional
and shall not in any manner be affected  or  impaired  by any acts or  omissions
whatsoever  of the  Lender or any  other  holder of any of the Note or any other
obligations   secured  hereby,  and  without  limiting  the  generality  of  the
foregoing,  the lien and security  interest  hereto shall not be impaired by any
acceptance  by the Lender or any other  holder of Note or any other  obligations
secured hereby of any other  security for or guarantors  upon any of the Note or
any other obligations  secured hereby or by any failure,  neglect or omission on
the part of the  Secured  Party or any  other  holder  of any of the Note or any
other  obligations  secured hereby to realize upon or protect any of the Note or
other  obligations  secured hereby or any collateral or security  therefor.  The
lien and  security  interest  hereto  shall  not in any  manner be  impaired  or
affected by (and the Lender,  without notice to anyone,  is hereby authorized to
make from time to time) any sale,  pledge,  surrender,  compromise,  settlement,
release, renewal, extension,  indulgence,  alteration,  substitution,  exchange,
change  in,  modification  or  disposition  of  any  of the  Note  or any  other
obligations secured hereby, or of any collateral or security therefor, or of any
guaranty thereof, or of any instrument or agreement setting forth the discretion
at any time grant  credit to Borrower  without  notice to the  Mortgagor in such
amounts  and on such terms as the  Lender  may elect (all of such to  constitute
additional  obligations hereby secured) without in any manner impairing the lien
and  security  interest  created and  provided  for herein.  In order to realize
hereon and to  exercise  the rights  granted to the Lender  hereunder  and under
applicable  law,  there shall be no  obligation on the part of the Lender or any
other  holder of the Note or any other  obligations  at any time to first resort
for  payment to  Borrower  or to any other  Guarantor  or to resort to any other
collateral,   security,   property,  liens  or  any  other  rights  or  remedies
whatsoever,  and the  Lender  shall  have the  right to  enforce  this  Mortgage
irrespective  of whether or not other  proceedings or steps seeking resort to or
realization upon or from any of the foregoing pending.

         The laws of South Carolina provide that in any real estate  foreclosure
proceeding a defendant  against  whom a personal  judgment is taken or asked may
within thirty days after the sale of the mortgaged  property  apply to the court
for an order of  appraisal.  The  statutory  appraisal  value as approved by the
court would be  substituted  for the high bid and may decrease the amount of any
deficiency owing in connection with the transaction.

         THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY  APPRAISAL
RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED
TO THE DEBT  EVIDENCED  BY THE NOTE  REGARDLESS  OF ANY  APPRAISED  VALUE OF THE
MORTGAGED PROPERTY (HEREIN DEFINED).

         IN WITNESS  WHEREOF,  the undersigned have executed this Mortgage under
seal as of the above written date.

                        CAROLINA INVESTORS, INC., a South Carolina corporation
                        (SEAL)


                        By:
                        Name:
                        Title:  _____________________________________


WITNESS:

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

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


<PAGE>



SOUTH CAROLINA                            )
                                          )
_________________ COUNTY                  )                  PROBATE


         Before  me, the  undersigned  notary  public  personally  appeared  the
undersigned  witness,  who,  being duly  sworn,  deposed  and said that s/he saw
Carolina  Investors,  Inc.,  a South  Carolina  corporation,  by its  authorized
officer, ___________________,  sign, seal and deliver the foregoing Mortgage and
Security  Agreement and that s/he together with the other witness  witnessed the
execution thereof.






SWORN TO and subscribed before
me this ____ day of _______________, 2001

                                            (L.S.)
--------------------------------------------
Notary Public for South Carolina

My commission expires:
                       -------------


<PAGE>


                                    EXHIBIT A

                                LEGAL DESCRIPTION


ALL THAT  CERTAIN  PROPERTY  SITUATED IN THE COUNTY OF  GREENVILLE  AND STATE OF
SOUTH  CAROLINA,  BEING  DESCRIBED  AS FOLLOWS:  22.41  ACRES,  BEING MORE FULLY
DESCRIBED IN A DEED DATED 09/13/99 AND RECORDED 9/23/99,  AMONG THE LAND RECORDS
OF THE COUNTY AND STATE SET FORTH ABOVE, IN DEED VOLUME 1868, PAGE 193.


BEING ALL OF THAT CERTAIN TRACT OR PARCEL OF LAND,  WITH  IMPROVEMENTS  THEREON,
CONTAINING  22.41 ACRES,  MORE OR LESS,  LYING IN GREENVILLE,  SOUTH CAROLINA AS
SHOWN ON THAT CERTAIN SURVEY FOR HOMEGOLD FINANCIAL, INC. (F/K/A EMERGENT GROUP,
INC.), DATED OCTOBER 6, 1997, PREPARED BY FREELAND & ASSOCIATES, AND RECORDED IN
GREENVILLE  COUNTY REGISTER OF DEEDS IN PLAT BOOK 36-T AT PAGE 61, AND BY A MORE
RECENT SURVEY (NOT RECORDED) FOR HOMEGOLD FINANCIAL, INC. (F/K/A EMERGENT GROUP,
INC.) DATED  MARCH 13,  1998,  AND HAVING SUCH  COURSES,  METES,  MEASURES,  AND
BOUNDARIES  AS  APPEAR  ON THE  AFORESAID  SURVEYS  AND  INCORPORATED  HEREIN BY
REFERENCE.


Commonly known as:  3901 Pelham Road, Greenville, South Carolina  29605

Tax map parcel no.:  0533.04-01-009.03


<PAGE>




                                       B-1
                                    EXHIBIT B

                             PERMITTED ENCUMBRANCES



</TEXT>
</DOCUMENT>
