Exhibit 10.1

EXECUTION COPY

TERM LOAN AGREEMENT

DATED AS OF JUNE 14, 2013

BY AND AMONG

MID-AMERICA APARTMENTS, L.P.,

AS BORROWER,

AND

JPMORGAN CHASE BANK, N.A.,

THE OTHER LENDERS WHICH ARE PARTIES TO THIS AGREEMENT

AND

OTHER LENDERS THAT MAY BECOME

PARTIES TO THIS AGREEMENT,

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT,

AND

J.P. MORGAN SECURITIES LLC,

AS LEAD ARRANGER

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§1.

  

DEFINITIONS AND RULES OF INTERPRETATION

     1       §1.1.   

Definitions

     1       §1.2.   

Rules of Interpretation

     25   

§2.

  

THE CREDIT FACILITY

     26       §2.1.   

Term Loans

     26       §2.2.   

Termination and Reduction of Commitments

     27       §2.3.   

[Intentionally Omitted.]

     27       §2.4.   

[Intentionally Omitted.]

     27       §2.5.   

[Intentionally Omitted.]

     27       §2.6.   

Interest on Loans

     27       §2.7.   

Requests for Term Loans

     27       §2.8.   

Funds for Loans

     28       §2.9.   

Use of Proceeds

     29       §2.10.   

Extension of Maturity Date

     29       §2.11.   

[Intentionally Omitted.]

     29       §2.12.   

[Intentionally Omitted.]

     29       §2.13.   

Defaulting Lenders

     30   

§3.

  

REPAYMENT OF THE LOANS

     32       §3.1.   

Stated Maturity

     32       §3.2.   

Mandatory Prepayments

     32       §3.3.   

Optional Prepayments

     32       §3.4.   

Partial Prepayments

     33       §3.5.   

[Intentionally Omitted.]

     33       §3.6.   

Effect of Prepayments

     33   

§4.

  

CERTAIN GENERAL PROVISIONS

     33       §4.1.   

Conversion Options

     33       §4.2.   

Fees

     34       §4.3.   

[Intentionally Omitted]

     34       §4.4.   

Funds for Payments

     34       §4.5.   

Computations

     36       §4.6.   

Suspension of LIBOR Rate Loans

     36       §4.7.   

Illegality

     37       §4.8.   

Additional Interest

     37   

 

-viii-

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   §4.9.   

Additional Costs, Etc

     37       §4.10.   

Capital Adequacy

     38       §4.11.   

Breakage Costs

     39       §4.12.   

Default Interest

     39       §4.13.   

Certificate

     39       §4.14.   

Limitation on Interest

     39       §4.15.   

Certain Provisions Relating to Increased Costs

     40   

§5.

  

UNSECURED OBLIGATIONS; GUARANTY

     41       §5.1.   

Unsecured Obligations

     41       §5.2.   

Additional Subsidiary Guarantors

     41       §5.3.   

Release of a Subsidiary Guarantor

     41   

§6.

  

REPRESENTATIONS AND WARRANTIES

     41       §6.1.   

Corporate Authority, Etc

     41       §6.2.   

Governmental Approvals

     42       §6.3.   

Title to Properties

     42       §6.4.   

Financial Statements

     43       §6.5.   

No Material Changes

     43       §6.6.   

Franchises, Patents, Copyrights„ Etc

     43       §6.7.   

Litigation

     44       §6.8.   

No Material Adverse Contracts, Etc

     44       §6.9.   

Compliance with Other Instruments, Laws, Etc

     44       §6.10.   

Tax Status

     44       §6.11.   

No Event of Default

     45       §6.12.   

Investment Company Act

     45       §6.13.   

Absence of UCC Financing Statements, Etc

     45       §6.14.   

Partners and the REIT

     45       §6.15.   

Certain Transactions

     45       §6.16.   

Employee Benefit Plans

     45       §6.17.   

Disclosure

     46       §6.18.   

Trade Name; Place of Business

     46       §6.19.   

Regulations T, U and X

     46       §6.20.   

Environmental Compliance

     47       §6.21.   

Subsidiaries; Organizational Structure

     48   

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   §6.22.   

Material Contracts

     48       §6.23.   

Property

     48       §6.24.   

Brokers

     49       §6.25.   

Other Debt

     49       §6.26.   

Solvency

     49       §6.27.   

No Bankruptcy Filing

     49       §6.28.   

No Fraudulent Intent

     49       §6.29.   

Transaction in Best Interests of Borrower and Guarantors; Consideration

     49       §6.30.   

Contribution Agreement

     50       §6.31.   

OFAC

     50       §6.32.   

Unencumbered Borrowing Base Properties

     50   

§7.

  

AFFIRMATIVE COVENANTS

     50       §7.1.   

Punctual Payment

     50       §7.2.   

Maintenance of Office

     51       §7.3.   

Records and Accounts

     51       §7.4.   

Financial Statements, Certificates and Information

     51       §7.5.   

Notices

     54       §7.6.   

Existence; Maintenance of Properties; NYSE Listing

     55       §7.7.   

Insurance

     56       §7.8.   

Taxes; Liens

     56       §7.9.   

Inspection of Properties and Books

     56       §7.10.   

Compliance with Laws, Contracts, Licenses and Permits

     57       §7.11.   

Further Assurances

     57       §7.12.   

Limiting Agreements

     57       §7.13.   

Ownership of Real Estate

     58       §7.14.   

Business Operations

     58       §7.15.   

Distributions of Income to Borrower

     58       §7.16.   

Plan Assets

     59       §7.17.   

Unencumbered Borrowing Base Properties,

     59   

§8.

  

NEGATIVE COVENANTS

     61       §8.1.   

Restrictions on Indebtedness

     61       §8.2.   

Restrictions on Liens, Etc

     62       §8.3.   

Restrictions on Investments

     63   

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   §8.4.   

Merger; Consolidation

     64       §8.5.   

Sale and Leaseback

     65       §8.6.   

Compliance with Environmental Laws

     65       §8.7.   

Distributions

     67       §8.8.   

Asset Sales

     67       §8.9.   

Restriction on Prepayment of Indebtedness

     67       §8.10.   

Derivatives Contracts

     68       §8.11.   

Transactions with Affiliates

     68       §8.12.   

Equity Pledges

     68       §8.13.   

Sanctions Laws and Regulations

     68   

§9.

  

FINANCIAL COVENANTS

     68       §9.1.   

Borrowing Base

     68       §9.2.   

Unencumbered Leverage Ratio

     68       §9.3.   

Minimum Unencumbered Interest Coverage Ratio

     68       §9.4.   

Total Leverage Ratio

     69       §9.5.   

Total Secured Leverage Ratio

     69       §9.6.   

Adjusted Consolidated EBITDA to Consolidated Fixed Charges

     69       §9.7.   

Minimum Consolidated Tangible Net Worth

     69       §9.8.   

Unhedged Variable Rate Debt

     69   

§10.

  

CLOSING CONDITIONS

     69       §10.1.   

Loan Documents

     69       §10.2.   

Certified Copies of Organizational Documents

     69       §10.3.   

Resolutions

     69       §10.4.   

Incumbency Certificate; Authorized Signers

     70       §10.5.   

Opinion of Counsel

     70       §10.6.   

Payment of Fees and Expenses

     70       §10.7.   

Performance; No Default

     70       §10.8.   

Representations and Warranties

     70       §10.9.   

Proceedings and Documents

     70       §10.10.   

Eligible Real Estate Qualification Documents

     70       §10.11.   

Compliance Certificate

     70       §10.12.   

Consents

     71       §10.13.   

Reserved

     71       §10.14.   

Other

     71   

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§11.

  

CONDITIONS TO ALL BORROWINGS

     71       §11.1.   

Prior Conditions Satisfied

     71       §11.2.   

Representations True; No Default

     71       §11.3.   

Borrowing Documents

     71   

§12.

  

EVENTS OF DEFAULT; ACCELERATION; ETC

     71       §12.1.   

Events of Default and Acceleration

     71       §12.2.   

Certain Cure Periods; Limitation of Cure Periods

     74       §12.3.   

Termination of Commitments

     74       §12.4.   

Remedies

     75       §12.5.   

Distribution of Proceeds

     75   

§13.

  

SETOFF

     76   

§14.

  

THE AGENT

     77       §14.1.   

Authorization

     77       §14.2.   

Employees and Agents

     77       §14.3.   

No Liability

     77       §14.4.   

No Representations

     77       §14.5.   

Payments

     78       §14.6.   

Holders of Notes

     78       §14.7.   

Indemnity

     79       §14.8.   

Agent as Lender

     79       §14.9.   

Resignation; Removal

     79       §14.10.   

Duties in the Case of Enforcement

     80       §14.11.   

Agent May File Proofs of Claim

     80       §14.12.   

Reliance by Agent

     80       §14.13.   

Approvals

     81       §14.14.   

Borrower Not Beneficiary

     81   

§15.

  

EXPENSES

     81   

§16.

  

INDEMNIFICATION

     82   

§17.

  

SURVIVAL OF COVENANTS, ETC

     83   

§18.

  

ASSIGNMENT AND PARTICIPATION

     83       §18.1.   

Conditions to Assignment by Lenders

     83       §18.2.   

Register

     85   

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   §18.3.   

New Notes

     85       §18.4.   

Participations

     85       §18.5.   

Pledge by Lender

     86       §18.6.   

No Assignment by the Borrower or the Guarantors

     86       §18.7.   

Disclosure

     86       §18.8.   

Amendments to Loan Documents

     87       §18.9.   

Mandatory Assignment

     87       §18.10.   

Titled Agents

     87   

§19.

  

NOTICES

     87   

§20.

  

RELATIONSHIP

     89   

§21.

  

GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE

     89   

§22.

  

HEADINGS

     90   

§23.

  

COUNTERPARTS

     90   

§24.

  

ENTIRE AGREEMENT, ETC

     90   

§25.

  

WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

     90   

§26.

  

DEALINGS WITH THE BORROWER AND THE GUARANTORS

     91   

§27.

  

CONSENTS, AMENDMENTS, WAIVERS, ETC

     91   

§28.

  

SEVERABILITY

     92   

§29.

  

TIME OF THE ESSENCE

     93   

§30.

  

NO UNWRITTEN AGREEMENTS

     93   

§31.

  

REPLACEMENT NOTES

     93   

§32.

  

NO THIRD PARTIES BENEFITED

     93   

§33.

  

PATRIOT ACT

     94   

§34.

  

JOINT AND SEVERAL LIABILITY

     94   

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TERM LOAN AGREEMENT

THIS TERM LOAN AGREEMENT (this “Agreement”) is made as of the 14th day of June,
2013, by and among MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership
(the “Borrower”), JPMORGAN CHASE BANK, N.A. (“JPMorgan”), the other lending
institutions which are parties to this Agreement as “Lenders”, and the other
lending institutions that may become parties hereto pursuant to §18 (together
with JPMorgan, the “Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative
Agent for the Lenders (the “Agent”).

RECITALS

WHEREAS, the Borrower has requested that the Lenders provide an unsecured term
loan facility to the Borrower; and

WHEREAS, the Agent and the Lenders are willing to provide such unsecured term
loan facility to the Borrower on and subject to the terms and conditions set
forth herein;

NOW, THEREFORE, in consideration of the recitals herein and mutual covenants and
agreements contained herein, the parties hereto hereby covenant and agree as
follows:

 

§1. DEFINITIONS AND RULES OF INTERPRETATION.

§1.1. Definitions. The following terms shall have the meanings set forth in this
§1 or elsewhere in the provisions of this Agreement referred to below:

Additional Subsidiary Guarantor. Each additional Subsidiary of the Borrower
which becomes a Subsidiary Guarantor pursuant to §5.2.

Adjusted Consolidated EBITDA. On any date of determination, the sum of (a) the
Consolidated EBITDA for the preceding four (4) fiscal quarters minus (b) the
Capital Reserves for such period.

Adjusted LIBO Rate. With respect to any LIBOR Rate Loan for any Interest Period,
an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of
1%) equal to (a) LIBOR for such Interest Period multiplied by (b) the Statutory
Reserve Rate.

Adjusted Net Operating Income. On any date of determination, the sum of (a) the
Net Operating Income for the preceding two (2) fiscal quarters annualized minus
(b) the Capital Reserves for such period.

Affiliate. An Affiliate, as applied to any Person, shall mean any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty percent (20%) or more of the stock,
shares, voting trust certificates, beneficial interests, partnership interests,
member interests or other interests having voting power for the election of
directors of such Person or otherwise to

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direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise,
or (b) the confidential ownership of (i) a general partnership interest, (ii) a
managing member’s or manager’s interest in a limited liability company or
(iii) a limited partnership interest or preferred stock (or other ownership
interest) representing twenty percent (20%) or more of the outstanding limited
partnership interests, preferred stock or other ownership interests of such
Person. In no event shall Agent or any Lender be deemed to be an Affiliate of
the Borrower.

Agent. JPMorgan Chase Bank, N.A. acting as administrative agent for the Lenders,
and its successors and assigns.

Agent’s Head Office. The Agent’s head office located at 270 Park Avenue,
New York, NY 10017, or at such other location as the Agent may designate from
time to time by notice to the Borrower and the Lenders.

Agent’s Special Counsel. Bingham McCutchen LLP or such other counsel as selected
by Agent.

Agreement. This Term Loan Agreement, including the Schedules and Exhibits
hereto.

Agreement Regarding Fees. See §4.2(a).

Alternate Base Rate. For any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate
in effect on such day plus  1/2 of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page of
such page) at approximately 11:00 a.m. London time on such day. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively.

Applicable Margin. The Applicable Margin shall mean, as of any date of
determination, a percentage per annum determined by reference to the Credit
Rating Level as set forth below:

 

Pricing Level

   Credit Rating Level    Applicable Margin for
LIBOR Rate Loans     Applicable Margin for
Base Rate Loans  

I

   Credit Rating Level 1      1.05 %      0.05 % 

II

   Credit Rating Level 2      1.15 %      0.15 % 

III

   Credit Rating Level 3      1.30 %      0.30 % 

IV

   Credit Rating Level 4      1.60 %      0.60 % 

V

   Credit Rating Level 5      2.05 %      1.05 % 

The Applicable Margin for each Base Rate Loan shall be determined by reference
to the Credit Rating Level in effect from time to time, and the Applicable
Margin for any Interest Period for all LIBOR Rate Loans comprising part of the
same borrowing shall be determined by reference

 

2

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to the Credit Rating Level in effect on the first day of such Interest Period;
provided, however that no change in the Applicable Margin resulting from the
application of the Credit Rating Levels or a change in the Credit Rating Level
shall be effective until three Business Days after the date on which the Agent
receives written notice of the application of the Credit Rating Levels or a
change in such Credit Rating Level.

Approved Fund. Any Fund that is administered or managed by (a) a Lender, (b) an
affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

Arranger. J.P. Morgan Securities LLC, or any successor.

Assignment and Acceptance Agreement. See §18.1.

Authorized Officer. Any of the following Persons: Albert M. Campbell, Andrew
Schaeffer, Timothy Argo, Leslie B.C. Wolfgang and such other Persons as the
Borrower shall designate in a written notice to Agent.

Balance Sheet Date. December 31, 2012.

Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any
successor statute thereto.

Bankruptcy Event. With respect to any Person, such Person becomes the subject of
a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, custodian, assignee for the benefit of creditors or
similar Person charged with the reorganization or liquidation of its business
appointed for it, or, in the good faith determination of the Agent, has taken
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any such proceeding or appointment, provided that a Bankruptcy
Event shall not result solely by virtue of any ownership interest, or the
acquisition of any ownership interest, in such Person by a Governmental
Authority or instrumentality thereof, provided, further, that such ownership
interest does not result in or provide such Person with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

Base Rate Loans. Term Loans bearing interest calculated by reference to the
Alternate Base Rate.

Board of Governors. The Board of Governors of the Federal Reserve System of the
United States of America.

Borrower. As defined in the preamble hereto.

Borrowing Base Availability. On any date of determination, the Borrowing Base
Availability shall be the amount which is the lesser of (a) the maximum
principal amount which, when added to the total outstanding balance of
Consolidated Total Unsecured Indebtedness (including the Loans), would not
exceed sixty percent (60%) of Unencumbered Asset Value as

 

3

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most recently determined under this Agreement, and (b) the maximum principal
amount which when added to the total outstanding balance of Consolidated Total
Unsecured Indebtedness (including the Loans) and bearing interest at an interest
rate equal to the Unencumbered Debt Service would not cause the Unencumbered
Interest Coverage Ratio to be less than 2.0 to 1.0.

Borrowing Base Certificate. See §7.4(c).

Breakage Costs. The cost to any Lender of re-employing funds bearing interest at
Adjusted LIBO Rate incurred (or reasonably expected to be incurred) in
connection with (i) any payment of any portion of the Loans bearing interest at
Adjusted LIBO Rate prior to the termination of any applicable Interest Period,
(ii) the conversion of a LIBOR Rate Loan to any other applicable interest rate
on a date other than the last day of the relevant Interest Period, or (iii) the
failure of the Borrower to draw down, on the first day of the applicable
Interest Period, any amount as to which the Borrower has elected a LIBOR Rate
Loan.

Building. With respect to each Unencumbered Borrowing Base Property or parcel of
Real Estate, all of the buildings, structures and improvements now or hereafter
located thereon.

Business Day. Any day on which banking institutions located in the same city and
State as the Agent’s Head Office are located and New York, New York are open for
the transaction of banking business and, in the case of LIBOR Rate Loans, which
also is a LIBOR Business Day.

Capital Markets Transaction. The issuance by the REIT, the Borrower or any of
their respective Subsidiaries of debt securities (excluding mortgage financings)
or common or preferred equity or equity equivalent securities (however
designated, and whether voting or non-voting, but excluding (a) equity not
issued for the purpose of raising cash such as (i) equity issued upon exercise
of options or upon awards to company executives or trustees and (ii) equity
issued under the REIT’s Dividend and Distribution Reinvestment and Share
Purchase Program and under any other dividend reinvestment plan of such Persons,
and (b) common stock issued pursuant to any of the distribution agreements by
and among the REIT, the Borrower and each of J.P. Morgan Securities LLC, BMO
Capital Markets Corp., KeyBanc Capital Markets Inc. and UBS Securities LLC, each
acting as sales agents, dated February 25, 2013, as such agreements may be
amended from time to time (collectively, the “ATM Agreements”) whereby the REIT
may issue from time to time up to 4,500,000 shares of its common stock in
at-the-market offerings (as defined in Rule 415(a)(4) under the Securities Act
of 1933, as amended) or any issuances of common stock in an at-the-market
offering pursuant to any future distribution agreement between the REIT and the
Borrower and any sales agent named therein that is materially consistent with
the terms of the ATM Agreements, provided that, for purposes of the exclusion in
(b), the net proceeds from any such sale of common stock shall be used for
property acquisitions made in the normal of business, course consistent with
past practice).

Capital Reserve. For any period and with respect to any improved Real Estate, an
amount equal to (i) $200 per apartment unit multiplied by (ii) a fraction, the
numerator of which is the number of days in such period and the denominator of
which is 365. If the term Capital Reserve is used without reference to any
specific Real Estate, then the amount shall be determined on an aggregate basis
with respect to all Real Estate of REIT and its Subsidiaries and a proportionate
share of all Real Estate of all Unconsolidated Entities.

 

4

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Capitalization Rate. Seven percent (7%).

Capitalized Lease. A lease under which the discounted future rental payment
obligations of the lessee or the obligor are required to be capitalized on the
balance sheet of such Person in accordance with GAAP.

Capitalized Value. For any Real Estate as of any date of determination, an
amount equal to (a) the Adjusted Net Operating Income for such Real Estate for
the previous two (2) fiscal quarters annualized divided by (b) the
Capitalization Rate.

Cash Equivalents. As of any date, (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of not more than one year from such
date, (ii) time deposits and certificates of deposits having maturities of not
more than one year from such date and issued by any domestic commercial bank
having, (A) senior long term unsecured debt rated at least A or the equivalent
thereof by S&P or A2 or the equivalent thereof by Moody’s and (B) capital and
surplus in excess of $100,000,000.00; (iii) commercial paper rated at least A-1
or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and
in either case maturing within one hundred twenty (120) days from such date, and
(iv) shares of any money market mutual fund rated at least AAA or the equivalent
thereof by S&P or at least Aaa or the equivalent thereof by Moody’s.

CERCLA. See §6.20(a).

Change of Control. A Change of Control shall exist upon the occurrence of any of
the following:

(a) any Person (including a Person’s Affiliates and associates) or group (as
that term is understood under Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the rules and regulations thereunder)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of REIT
equal to at least thirty percent (30%);

(b) as of any date a Majority of the Board of Directors or Trustees or similar
body (the “Board”) of REIT or the Borrower consists of individuals who were not
either (i) directors or trustees of REIT or the Borrower as of the corresponding
date of the previous year, or (ii) selected or nominated to become directors or
trustees by the Board of REIT or the Borrower of which a majority consisted of
individuals described in clause (b)(i) above, or (iii) selected or nominated to
become directors or trustees by the Board of REIT or the Borrower, which
majority consisted of individuals described in clause (b)(i) above and
individuals described in clause (b)(ii), above (excluding, in the case of both
clause (ii) and (iii) above, any individual whose initial nomination for, or
assumption of office as, a member of the Board occurs as a result of an actual
or threatened solicitation of proxies or consents for the election or removal of
one or more directors or trustees by any Person or group other than a
solicitation for the election of one or more directors or trustees by or on
behalf of the Board); or

(c) the Borrower or any Guarantor consolidates with, is acquired by, or merges
into or with any Person (other than a merger permitted by §8.4); or

 

5

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(d) REIT (i) fails to own directly or indirectly, free of any lien, encumbrance
or other adverse claim, at least eighty-five percent (85%) of the economic,
voting and beneficial interests of the Borrower, (ii) fails to be the sole
general partner of the Borrower, or (iii) shall fail to control the management
and policies of the Borrower; or

(e) the Borrower (or in the event that the Subsidiaries of the Borrower which
own the projects commonly known as Woods of Post House, Paddock Club Florence,
Hunter’s Ridge and/or Austin Chase become Subsidiary Guarantors, Borrower and
REIT) (i) fails to own directly or indirectly, free of any lien, encumbrance or
other adverse claim, at least one hundred percent (100%) of the economic, voting
and beneficial interests of each Subsidiary Guarantor, or (ii) shall fail to
control the management and policies of each Subsidiary Guarantor; or

(f) Both of H. Eric Bolton, Jr. and Albert M. Campbell III shall cease to be the
Chairman of the Board and Chief Executive Officer and Chief Financial Officer,
respectively, of the REIT, and competent and experienced directors or officers,
as applicable, shall not be reasonably approved by the Agent within three
(3) months of such event.

Notwithstanding the foregoing, the Merger Transaction shall not be deemed to
constitute a Change of Control hereunder.

Closing Date. The first date on which all of the conditions set forth in §10
have been satisfied.

Code. The Internal Revenue Code of 1986, as amended, and all regulations and
formal guidance issued thereunder.

Commitment. With respect to each Lender, the amount set forth on Schedule 1.1
hereto as the amount of such Lender’s Commitment to make or maintain Loans to
the Borrower, as the same may be reduced from time to time in accordance with
the terms of this Agreement.

Commitment Percentage. With respect to each Lender, the percentage set forth on
Schedule 1.1 hereto as such Lender’s percentage of the aggregate Commitments of
all of the Lenders, as the same may be changed from time to time in accordance
with the terms of this Agreement; provided that if the Commitments of the
Lenders have been terminated as provided in this Agreement, then the Commitment
of each Lender shall be determined based on the Commitment Percentage of such
Lender immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof.

Commitment Period. The period from the Closing Date to the earliest to occur of
(a) the date that is sixty (60) days following the date on which the Merger
Transaction is consummated, (b) the date on which Term Loans have been made in
an amount equal to the Total Commitments, and (c) June 14, 2014.

Compliance Certificate. See §7.4(c).

 

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Consolidated. With reference to any term defined herein, that term as applied to
the accounts of a Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.

Consolidated EBITDA. For any period of determination, an amount equal to the
EBITDA of REIT and its Subsidiaries for such period determined on a Consolidated
basis.

Consolidated Entities. Collectively, the REIT and all Subsidiaries of the REIT.

Consolidated Fixed Charges. For any period of determination, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, plus (b) all
Preferred Distributions paid during such period (other than Preferred
Distributions paid by a Consolidated Entity to another Consolidated Entity),
plus (c) the scheduled principal amount of all amortization payments in respect
to Indebtedness of the Consolidated Entities during such period (other than any
such Indebtedness owed to another Consolidated Entity and any balloon payments),
plus (d) such Person’s Unconsolidated Allocation Percentage in the fixed charges
referred to above of its Unconsolidated Entities for such period.

Consolidated Interest Expense. For any period of determination, (a) total
interest (whether accrued or paid) actually payable by the Consolidated
Entities, together with the interest portion of payments on Capitalized Leases
of the Consolidated Entities, determined on a Consolidated basis for such period
minus (b) any non-cash amounts included in such total Interest Expense which
reflect the amortization of deferred financing charges for such period.

Consolidated Tangible Net Worth. As of any date of determination, with respect
to the Consolidated Entities determined on a Consolidated basis, the sum of
(a) Consolidated Total Asset Value minus (b) Consolidated Total Indebtedness.

Consolidated Total Asset Value. On a Consolidated basis for the Consolidated
Entities, Consolidated Total Asset Value shall mean as of any date of
determination the sum of the following (without duplication):

(a) with respect to Real Estate owned by REIT, the Borrower and their respective
Wholly Owned Subsidiaries for four (4) full fiscal quarters or more (other than
those included under clauses (c) and (d) below), (x) the Adjusted Net Operating
Income attributable to such Real Estate for the period of the two (2) fiscal
quarters most recently ending prior to the date of determination annualized
divided by (y) the Capitalization Rate; plus

(b) with respect to Real Estate owned by REIT, the Borrower and their Wholly
Owned Subsidiaries for less than four (4) full fiscal quarters (other than those
included under clauses (c) and (d) below), the undepreciated book value
determined in accordance with GAAP of all such Real Estate; plus

(c) the undepreciated book value determined in accordance with GAAP of all
Development Properties owned by REIT, the Borrower and their respective
Wholly-Owned Subsidiaries; plus

 

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(d) the undepreciated book value determined in accordance with GAAP of all
Unimproved Land owned by REIT, the Borrower and their respective Wholly-Owned
Subsidiaries; plus

(e) the aggregate amount of all Unrestricted Cash and Cash Equivalents of REIT
and its Subsidiaries as of the date of determination determined in accordance
with GAAP; plus

(f) the REIT’s Unconsolidated Allocation Percentage of the Consolidated Total
Asset Value attributable to any of the items listed above in this definition
owned by such Unconsolidated Entity.

For purposes of determining Consolidated Total Asset Value, assets no longer
owned as of a date of determination shall be excluded from such calculation.

Consolidated Total Indebtedness. All Indebtedness of the Consolidated Entities
determined on a Consolidated basis.

Consolidated Total Secured Indebtedness. On any date of determination, all
Secured Indebtedness of the Consolidated Entities determined on a Consolidated
basis and shall include (without duplication) such Person’s Unconsolidated
Allocation Percentage of the Secured Indebtedness of its Unconsolidated
Entities.

Consolidated Total Unsecured Indebtedness. On any date of determination, all
Unsecured Indebtedness of the Consolidated Entities determined on a Consolidated
basis and shall include (without duplication) such Person’s Unconsolidated
Allocation Percentage of the Unsecured Indebtedness of its Unconsolidated
Entities.

Contribution Agreement. That certain Contribution Agreement as may be required
to be executed by the Borrower and the Guarantors (including each Additional
Subsidiary Guarantor which may hereafter become a party thereto) pursuant to the
terms hereof, in the form attached hereto as Exhibit J, as the same may be
modified, amended or ratified from time to time.

Conversion/Continuation Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with §4.1.

Credit Party. The Agent or any other Lender.

Credit Rating. As of any date of determination, the higher of the credit ratings
(or their equivalents) then assigned to REIT’s long-term senior unsecured
non-credit enhanced debt by either of the Rating Agencies. A credit rating of
BBB- from S&P is equivalent to a credit rating of Baa3 from Moody’s and vice
versa. A credit rating of BBB from S&P is equivalent to a credit rating of Baa2
from Moody’s and vice versa: A credit rating of BBB+ from S&P is equivalent to a
credit rating of Baal by Moody’s and vice versa. It is the intention of the
parties that if REIT shall only obtain a credit rating from one of the Rating
Agencies without seeking a credit rating from the other of the Rating Agencies,
the Borrower shall be entitled to the benefit of the Credit Rating Level for
such credit rating. If REIT shall have obtained a credit rating from both of the
Rating Agencies, the higher of the two ratings shall control, provided that the
lower rating is only

 

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one level below that of the higher rating. If the lower rating is more than one
level below that of the higher credit rating, the operative rating shall be
deemed to be one rating level lower than the higher of the two ratings. In the
event that REIT shall have obtained a credit rating from both of the Rating
Agencies and shall thereafter lose such rating (whether as a result of a
withdrawal, suspension, election to not obtain a rating, or otherwise) from one
of the Rating Agencies, the operative rating would be deemed to be one rating
level lower than the remaining rating. In the event that REIT shall have
obtained a credit rating from both of the Rating Agencies and shall thereafter
lose such rating (whether as a result of withdrawal, suspension, election to not
obtain a rating, or otherwise) from both of the Rating Agencies, REIT shall be
deemed for the purposes hereof not to have a credit rating. If at any time
either of the Rating Agencies shall no longer perform the functions of a
securities rating agency, then the Borrower and the Agent shall promptly
negotiate in good faith to agree upon a substitute rating agency or agencies
(and to correlate the system of ratings of each substitute rating agency with
that of the rating agency being replaced), and pending such amendment, the
Credit Rating of the other of the Rating Agencies, if one has been provided,
shall continue to apply.

Credit Rating Level. One of the following five pricing levels, as applicable,
and provided that, during any period that REIT has no Credit Rating Level,
Credit Rating Level 5 shall be the applicable Credit Rating Level;

“Credit Rating Level 1” means the Credit Rating Level which would be applicable
for so long as the Credit Rating is greater than or equal to A- by S&P or A3 by
Moody’s;

“Credit Rating Level 2” means the Credit Rating Level which would be applicable
for so long as the Credit Rating is equal to BBB+ by S&P or Baal by Moody’s;

“Credit Rating Level 3” means the Credit Rating Level which would be applicable
for so long as the Credit Rating is equal to BBB by S&P or Baa2 by Moody’s;

“Credit Rating Level 4” means the Credit Rating Level which would be applicable
for so long as the Credit Rating is equal to BBB- by S&P or Baa3 by Moody’s; and

“Credit Rating Level 5” means the Credit Rating Level which would be applicable
for so long as the Credit Rating is less than BBB- by S&P or Baa3 by Moody’s or
there is no Credit Rating.

Default. See §12.1.

Defaulting Lender. Any Lender that (a) has failed, within two Business Days of
the date required to be funded or paid, to (i) fund any portion of its Loans or
(ii) pay over to any Credit Party any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Lender notifies the
Agent in writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified and
including the particular default, if any) has not been satisfied, (b) has
notified the Borrower or any Credit Party in writing, or has made a public
statement to the effect, that it does not intend or

 

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expect to comply with any of its funding obligations under this Agreement
(unless such writing or public statement indicates that such position is based
on such Lender’s good faith determination that a condition precedent
(specifically identified and including the particular default, if any) to
funding a loan under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit, (c) has failed, within
three (3) Business Days after request by a Credit Party, acting in good faith,
to provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Loans under this Agreement, provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
such Credit Party’s receipt of such certification in form and substance
satisfactory to it and the Agent, or (d) has become the subject of a Bankruptcy
Event.

Default Rate. See §4.12.

Derivatives Contract. Any and all rate swap transactions, basis swaps, credit
derivative transactions, rate cap transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement. Not in limitation
of the foregoing, the term “Derivatives Contract” includes any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement,
including any such obligations or liabilities under any such master agreement.

Derivatives Termination Value. In respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Derivatives Contracts, (a) for any date on or
after the date such Derivatives Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) the amount(s)
determined as the mark-to-market value(s) for such Derivatives Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Derivatives Contracts as
reasonably acceptable to Agent and Borrower (which may include the Agent or any
Lender).

Designated Person. A person or entity (a) listed in the annex to, or otherwise
subject to the provisions of, any Executive Order; (b) named as a “Specially
Designated National and Blocked Person” (“SDN”) on the most current list
published by OFAC at its official website or any replacement website or other
replacement official publication of such list (the “SDN List”) or is otherwise
the subject of any Sanctions Laws and Regulations; (c) in which an entity or
person on the SDN List has 50% or greater ownership interest or that is
otherwise controlled by an SDN.

 

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Development Property. Any Real Estate owned or acquired by the REIT, Borrower or
any of their respective Subsidiaries and on which the Borrower or any of its
Subsidiaries is actively pursuing construction of one or more buildings for use
as a multifamily property and for which construction is proceeding to completion
without undue delay from permit denial, construction delays or otherwise, all
pursuant to the ordinary course of business of the REIT, Borrower or such
Subsidiary; provided that any such property will no longer be considered to be a
Development Property at the earlier to occur of (i) the first date that not less
than 85% of the apartment units in such multifamily property are subject to a
lease and (ii) such Real Estate having been in operation for four (4) full
fiscal quarters.

Distribution. Any (a) dividend or other distribution, direct or indirect, on
account of any Equity Interest of the Guarantors, the Borrower, or any of their
respective Subsidiaries now or hereafter outstanding, except a dividend payable
solely in Equity Interests of identical class to the holders of that class;
(b) redemption, conversion, exchange, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity Interest of the Guarantors, the Borrower, or any of their respective
Subsidiaries now or hereafter outstanding; and (c) payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire any Equity Interests of the Guarantors, the Borrower, or any of their
respective Subsidiaries now or hereafter outstanding.

Dollars or $. Dollars in lawful currency of the United States of America.

Domestic Lending Office. Initially, the office of each Lender designated as such
on Schedule 1.1 hereto; thereafter, such other office of such Lender, if any,
located within the United States that will be making or maintaining Base Rate
Loans.

Drawdown Date. The date on which any Loan is made or is to be made, and the date
on which any Loan which is made prior to the Maturity Date is converted in
accordance with §4.1.

EBITDA. For any period (without duplication), the consolidated Net Income (or
Loss) of the Consolidated Entities for such period (before deduction for
minority interests in any of the Consolidated Entities and excluding any
adjustments for “straight-line rent accounting”), plus (A) the following items
to the extent deducted in computing such consolidated Net Income (or Loss) for
such period: (i) Consolidated Interest Expense of the Consolidated Entities for
such period, (ii) consolidated income tax expense of the Consolidated Entities
for such period, (iii) consolidated expenses associated with the upfront costs
of acquisitions and not otherwise capitalized, and (iv) consolidated real estate
depreciation, amortization, and other extraordinary and non-cash items of the
Consolidated Entities for such period (except, in the case of such other
non-cash items, to the extent that a cash payment will be required to be made in
respect thereof in a future period), minus (B) the following items to the extent
included in computing such consolidated Net Income (or Loss) for such period:
(i) all consolidated gains (or plus all consolidated losses) attributable to any
sales or other dispositions of assets, debt restructurings or early retirement
of debt of the Consolidated Entities in such period, and (ii) all income (or
plus all losses) from all Unconsolidated Entities, plus (or minus, as
applicable) (C) the Unconsolidated Allocation Percentage of any of the items
described above in this definition that are attributable to any Unconsolidated
Entity for such period.

 

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Electronic System. Any electronic system, including e-mail, e-fax, Intralinks®,
ClearPar® and any other Internet or extranet-based site, whether such electronic
system is owned, operated or hosted by the Administrative Agent and the Issuing
Bank and any of its respective Related Parties or any other Person, providing
for access to data protected by passcodes or other security system.

Eligible Real Estate. Real Estate:

(a) which is wholly-owned in fee (or leased under a Ground Lease) by the REIT,
Borrower or a Subsidiary Guarantor;

(b) which is located within the continental United States;

(c) which is either (i) Unimproved Land, (ii) a Development Property, (iii) the
Headquarters, or (iv) an income-producing multifamily property, which contains
improvements that are in operating condition and available for occupancy, is
currently open for business to the public and has been fully and continuously
operating during the immediately preceding three (3) month period, and with
respect to which valid certificates of occupancy and all other operating permits
and licenses have been validly issued and are in full force and effect;

(d) as to which all of the representations set forth in §6 of this Agreement
concerning Unencumbered Borrowing Base Property are true and correct; and

(e) which is in compliance with and would not cause a Default or Event of
Default under this Agreement.

Eligible Real Estate Qualification Documents. See §7.17(a)(ix).

Employee Benefit Plan. Any employee benefit plan within the meaning of §3(3) of
ERISA maintained or contributed to by the Borrower, any Guarantor or any ERISA
Affiliate, other than a Multiemployer Plan.

Environmental Laws. See §6.20(a).

Equity Interests. With respect to any Person, any share of capital stock of (or
other ownership or profit interests in) such Person, any warrant, option or
other right for the purchase or other acquisition from such Person of any share
of capital stock of (or other ownership or profit interests in) such Person, any
security convertible into or exchangeable for any share of capital stock of (or
other ownership or profit interests in) such Person or warrant, right or option
for the purchase or other acquisition from such Person of such shares (or such
other interests), and any other ownership or profit interest in such Person
(including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting, and whether or not such share, warrant, option,
right or Other interest is authorized or otherwise existing on any date of
determination.

Equity Offering. The issuance and sale after the Closing Date by REIT or any of
its Subsidiaries of any equity securities of such Person.

 

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ERISA. The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time, and all regulations and formal guidance issued
thereunder.

ERISA Affiliate. Any Person which is treated as a single employer with REIT or
its Subsidiaries under §414 of the Code or §4001 of ERISA, and any predecessor
entity of any of them.

ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension.
Plan within the meaning of §4043 of ERISA as to which the requirement of notice
has not been waived or any other event with respect to which the Borrower or an
ERISA Affiliate could have liability under ERISA §4062(e) or §4063.

Event of Default. See §12.1.

Excluded FATCA Tax. Any tax, assessment or other governmental charge imposed on
a Lender under FATCA, to the extent applicable to the transactions contemplated
by this Agreement, that would not have been imposed but for a failure by a
Lender (or any financial institution through which any payment is made to such
Lender) to comply with the requirements of FATCA.

Existing Credit Facilities. The credit facilities of the Borrower more
particularly described on Schedule 1.3 hereto.

Existing Revolving Credit Facility. The revolving credit facilities of the
Borrower with KeyBank, National Association as administrative agent, entered
into November 1, 2011, as more particularly described on Schedule 1.3 hereto.

Extension Effective Date. See §2.10(b).

Extension Notice Date. See §2.10(a).

FATCA. Sections 1471 through 1474 of the Internal Revenue Code.

Federal Funds Effective Rate. For any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.

Fund. Any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.

Funds from Operations. With respect to REIT and its Subsidiaries for any period,
on a Consolidated basis (and in accordance with the standards established by the
Board of Governors of NAREIT in its March 1995 White Paper, as amended in
November 1999 and April 2000), Net

 

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Income, excluding to the extent included to arrive at Net Income: (1) gains (or
losses) from sales of property and extraordinary and unusual items,
(ii) depreciation and amortization, and (iii) expenses (not otherwise
capitalized) associated with the upfront costs of acquisitions. Adjustments for
Unconsolidated Entities will be calculated to reflect funds from operations on
the same basis.

GAAP. Principles that are (a) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time and (b) consistently applied with past financial
statements of the Person adopting the same principles; provided that a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.

Governmental Authority. The government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

Ground Lease. An unsubordinated ground lease as to which no default or event of
default has occurred or with the passage of time or the giving of notice would
occur and containing the following terms and conditions: (a) a remaining term
(exclusive of any unexercised extension options) of thirty (30) years or more
from the Closing Date; (b) the right of the lessee to mortgage and encumber its
interest in the leased property without the consent of the lessor; (c) the
obligation of the lessor to give the holder of any mortgage lien on such leased
property written notice of any defaults on the part of the lessee and agreement
of such lessor that such lease will not be terminated until such holder has had
a reasonable opportunity to cure or complete foreclosure, and fails to do so;
(d) reasonable transferability of the lessee’s interest under such lease,
including the ability to sublease; and (e) such other rights customarily
required by mortgagees making a loan secured by the interest of the holder of
the leasehold estate demised pursuant to a ground lease.

Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of
§3(2) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate the benefits of which are guaranteed on termination in full or in part
by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantors. Collectively, REIT and the Subsidiary Guarantors (including all
Additional Subsidiary Guarantors), and individually any one of them.

Guaranty. The Unconditional Guaranty of Payment and Performance dated of even
date herewith given by REIT and, if required by the terms of this Agreement, the
Subsidiary Guarantors (including each Additional Subsidiary Guarantor which may
hereafter become a party thereto) to and for the benefit of Agent and the
Lenders as the same may be modified, amended, restated or ratified, such
Guaranty to be in form and substance satisfactory to the Required Lenders.

 

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Hazardous Substances. See §6.20(b).

Headquarters. The REIT’s corporate headquarters, which is wholly owned by the
Borrower and located at 6584 Poplar Avenue, Memphis, Tennessee.

Indebtedness. With respect to a Person, at the time of computation thereof, all
of the following (without duplication): (a) all obligations of such Person in
respect of money borrowed (other than trade debt incurred in the ordinary course
of business not more than 180 days past due); (b) all obligations of such
Person, whether or not for money borrowed (i) represented by notes payable, or
drafts accepted, in each case representing extensions of credit, (ii) evidenced
by bonds, debentures, notes or similar instruments, or (iii) constituting
purchase money indebtedness, conditional sales contracts, title retention debt
instruments or other similar instruments, upon which interest charges are
customarily paid or that are issued or assumed as full or partial payment for
property or services rendered; (c) obligation of such Person as a lessee or
obligor under a Capitalized Lease; (d) all reimbursement obligations of such
Person under any letters of credit or acceptances (whether or not the same have
been presented for payment); (e) all obligations of such Person in respect of
any purchase obligation, repurchase obligation, takeout commitment or forward
equity commitment, in each case evidenced by a binding agreement (excluding any
such obligation to the extent the obligation can be solely satisfied by the
issuance of Equity Interests); (f) all Indebtedness of other Persons which such
Person has guaranteed or is otherwise recourse to such Person (except for
guaranties of customary exceptions for fraud, misapplication of funds,
environmental indemnities, violation of “special purpose entity” covenants, and
other similar exceptions to recourse liability until a claim is made with
respect thereto, and then shall be included only to the extent of the amount of
such claim), including any obligation to supply funds to or in any manner to
invest directly or indirectly in a Person, to maintain working capital or equity
capital of a Person or otherwise to maintain net worth, solvency or other
financial condition of a Person, to purchase indebtedness, or to assure the
owner of indebtedness against loss, including, without limitation, through an
agreement to purchase property, securities, goods, supplies or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise; and (g) such Person’s Unconsolidated Allocation Percentage
of the Indebtedness of any Unconsolidated Entity of such Person. Indebtedness of
any Person shall include Indebtedness of any partnership or joint venture in
which such Person is a general partner or joint venturer to the extent of such
Person’s pro rata share of the ownership of such partnership or joint venture
(except if such Indebtedness, or portion thereof, is recourse to such Person, in
which case the greater of such Person’s pro rata portion of such Indebtedness or
the amount of the recourse portion of the Indebtedness, shall be included as
Indebtedness of such Person). All Loans shall constitute Indebtedness of the
Borrower.

Interest Payment Date. As to each Base Rate Loan, the fifth (5th) day of each
calendar month during the term of such Loan. As to each LIBOR Rate Loan, the
last day of the applicable Interest Period and on the date such LIBOR Rate Loan
is converted or paid in full, provided that in the event that the Interest
Period shall be for a period of six (6) months, then interest shall also be
payable on the three (3) month anniversary of the commencement of such Interest
Period.

Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period
commencing on the Drawdown Date of such LIBOR Rate Loan and ending one, three or
six

 

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months thereafter, and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Loan Request or Conversion/Continuation Request;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:

(i) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end
on a day that is not a LIBOR Business Day, such Interest Period shall end on the
next succeeding LIBOR Business Day, unless such next succeeding LIBOR Business
Day occurs in the next calendar month, in which case such Interest Period shall
end on the next preceding LIBOR Business Day, as determined conclusively by the
Agent in accordance with the then current bank practice in London;

(ii) if the Borrower shall fail to give notice as provided in §4.1, the Borrower
shall be deemed to have requested a conversion of the affected LIBOR Rate Loan
to a Base Rate Loan on the last day of the then current Interest Period with
respect thereto;

(iii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the applicable calendar month; and

(iv) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the
Maturity Date.

Investments. With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person and owned by
such Person, all loans, advances, or extensions of credit to, or contributions
to the capital of, any other Person, all purchases of the securities or business
or integral part of the business of any other Person and commitments and options
to make such purchases, all interests in real property, and all other
investments; provided, however, that the term “Investment” shall not include
(i) equipment, inventory and other tangible personal property acquired in the
ordinary course of business, or (ii) current trade and customer accounts
receivable for services rendered in the ordinary course of business and payable
in accordance with customary trade terms. In determining the aggregate amount of
Investments outstanding at any particular time: (a) there shall be included as
an Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (b) there shall be deducted
in respect of each Investment any amount received as a return of capital;
(c) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the foregoing
clause (a) may be deducted when paid; and (d) there shall not be deducted in
respect of any Investment any decrease in the value thereof.

Joinder Agreement. The Joinder Agreement with respect to the Guaranty and the
Contribution Agreement to be executed and delivered pursuant to §5.2 by any
Additional Subsidiary Guarantor, such Joinder Agreement to be substantially in
the form of Exhibit C hereto.

 

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JPMorgan. As defined in the preamble hereto.

Leases. Leases, licenses and agreements, whether written or oral, relating to
the use or occupation of space in any Building or of any Real Estate.

Lenders. JPMorgan, the other lending institutions which are party hereto and any
other Person which becomes an assignee of any rights of a Lender pursuant to §18
(but not including any participant as described in §18).

LIBOR. For any LIBOR Rate Loan for any Interest Period, the rate appearing on
Reuters Screen LIBOR01 Page (or on any successor or substitute page) on such
screen at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits in the
London interbank market with a maturity comparable to such Interest Period. In
the event that such rate does not appear on such page (or on any successor or
substitute page on such screen or otherwise on such screen), “LIBOR” with
respect to such LIBOR Rate Loan for such Interest Period shall be determined by
reference to such other comparable publicly available service for displaying
interest rates for dollar deposits in the London interbank market as may be
selected by the Agent or, in the absence of such availability, by reference to
the rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

LIBOR Business Day. Any day on which commercial banks are open for international
business (including dealings in Dollar deposits) in London, England.

LIBOR Lending Office. Initially, the office of each Lender designated as such on
Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that
shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate Loans. Term Loans bearing interest calculated by reference to
Adjusted LIBO Rate.

Lien. See §8.2.

Loan Documents. This Agreement, the Notes, the Guaranty, the Joinder Agreement,
and all other documents, instruments or agreements now or hereafter executed or
delivered by or on behalf of the Borrower or the Guarantors in connection with
the Loans.

Loan Request. See §2.7.

Loan or Loans. The Term Loan or the Term Loans, as the case may be.

Manager. Mid-America Apartments, L.P., a Tennessee limited partnership.

Material Adverse Effect. A material adverse effect on (a) the business,
properties, assets, condition (financial or otherwise) or results of operations
of REIT and its Subsidiaries considered as a whole; (b) the ability of the
Borrower or any Guarantor to perform any of its obligations under the Loan
Documents; or (c) the validity or enforceability of any of the Loan Documents or
the rights or remedies of Agent or the Lenders thereunder.

 

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Material Contract. Any contract or other arrangement (other than Loan
Documents), whether written or oral, to which the Borrower, REIT or any of their
respective Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could reasonably be
expected to have a Material Adverse Effect.

Material Subsidiary. Any Subsidiary of REIT which has total asset value that
constitutes in excess of five percent (5%) of Consolidated Total Asset Value.
For the purposes of this definition, the asset value shall be calculated
consistent with the definition of Consolidated Total Asset Value.

Maturity Date. June 14, 2014 or, if the Maturity Date is extended in accordance
with the terms of §2.10, June 14, 2015, or such earlier date on which the Loan
shall become due and payable pursuant to the terms hereof.

Merger Transaction. That certain stock-for-stock merger transaction more fully
described on Schedule 1.4.

Moody’s. Moody’s Investor Service, Inc. or its successor.

Mortgage Notes. Seller financing notes that the Borrower has received from
purchasers of its properties. For purposes of calculations in this Agreement,
Mortgage Notes shall be valued in accordance with GAAP (including write-offs for
uncollectability).

Multiemployer Plan. Any multiemployer plan within the meaning of §3(37) or
§4001(a)(3) of ERISA or §414(f) of the Code maintained or contributed to by the
Borrower, any Guarantor or any ERISA Affiliate.

Net Cash Proceeds. With respect to any Capital Markets Transaction, the cash
proceeds received from such Capital Markets Transaction, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred and payable
to third parties in connection therewith.

Net Income (or Loss). With respect to any Person (or any asset of any Person)
for any period, the net income (or loss) of such Person (or attributable to such
asset), determined in accordance with GAAP.

Net Offering Proceeds. The gross cash proceeds received by REIT or any of its
Subsidiaries as a result of an Equity Offering less the customary and reasonable
costs, expenses and discounts paid by REIT or such Subsidiary in connection
therewith.

Net Operating Income. For any Real Estate and for a given period, the sum of the
following (without duplication): (a) gross revenues (including interest income)
received in the ordinary course from such Real Estate minus (b) all expenses
paid or accrued related to the ownership, operation or maintenance of such Real
Estate, including but not limited to taxes, assessments and the like, insurance,
utilities, payroll costs, maintenance, repair and landscaping

 

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expenses, marketing expenses, and general and administrative expenses (including
an appropriate allocation for legal, accounting, advertising, marketing and
other expenses incurred in connection with such Real Estate, but specifically
excluding general overhead expenses of the REIT, Borrower or any Subsidiary, any
property management fees, debt service charges, income taxes, depreciation,
amortization, other non-cash expenses, and any extraordinary, non-recurring
expense associated with any financing, merger, acquisition, divestiture or other
capital transaction) minus (c) a management fee in the amount of three percent
(3.0%) of the gross revenues for such Real Estate for such period.

Non-Defaulting Lender. At any time, any Lender that is not a Defaulting Lender
at such time.

Non-Recourse Exclusions. With respect to any Non-Recourse Indebtedness of any
Person, any usual and customary exclusions from the non-recourse limitations
governing such Indebtedness, including, without limitation, exclusions for
claims that (i) are based on fraud, intentional misrepresentation,
misapplication of funds, gross negligence or willful misconduct, (ii) result
from intentional mismanagement of or waste at the Real Property securing such
Non-Recourse Indebtedness, (iii) arise from the presence of Hazardous Substances
on the Real Property securing such Non-Recourse Indebtedness; or (iv) are the
result of any unpaid real estate taxes and assessments (whether contained in a
loan agreement, promissory note, indemnity agreement or other document).

Non-Recourse Indebtedness. Indebtedness of REIT, Borrower or a Subsidiary of
REIT or Borrower which is not a Guarantor for borrowed money (other than
construction completion guaranties with respect to Development Properties) in
respect of which recourse for payment (except for Non-Recourse Exclusions until
a claim is made with respect thereto, and then such Indebtedness shall not
constitute “Non-Recourse Indebtedness” only to the extent of the amount of such
claim) is contractually and solely limited to specific assets of such Person
encumbered by a Lien securing such Indebtedness and is not a general obligation
of such Person.

Notes. Collectively, the Term Loan Notes.

Notice. See §19.

Obligations. All indebtedness, obligations and liabilities of the Borrower and
the Guarantors to any of the Lenders or the Agent, individually or collectively,
under this Agreement or any of the other Loan Documents or in respect of any of
the Loans, the Notes or other instruments at any time evidencing any of the
foregoing, whether existing on the date of this Agreement or arising or incurred
hereafter, or arising or incurred after the commencement of any bankruptcy or
insolvency proceeding (whether or not the same is allowed as an enforceable
claim in such proceeding), direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, whether on
account of principal, interest, fees, indemnities, costs, expenses (including
all fees, charges and disbursements of counsel to the Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or otherwise.

 

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Occupancy Rate. With respect to any Eligible Real Estate included in the
calculation of the Borrowing Base Availability, the ratio, expressed as a
percentage, of (a) the number of apartment units in such Eligible Real Estate
actually occupied by tenants (excluding any tenants holding over) that are not
affiliated with the Borrower and paying rent at rates not materially less than
rates generally prevailing in the geographical market of the respective Eligible
Real Estate at the time the applicable lease was entered into, pursuant to
binding leases as to which no monetary default has occurred and is continuing
which has continued unremedied for thirty (30) or more days to (b) the aggregate
number of apartment units in such. Eligible Real Estate. For purposes of
determining compliance with §7.17(a)(viii), the aggregate Occupancy Rate shall
be computed on an aggregated basis for all Unencumbered Borrowing Base
Properties, consistent with the provisions for determining the Occupancy Rate
for any individual Unencumbered Borrowing Base Property as set forth above:

OFAC. Office of Foreign Asset Control of the Department of the Treasury of the
United States of America.

Outstanding. With respect to the Loans, the aggregate unpaid principal thereof
as of any date of determination.

Patriot Act. The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as the same may
be amended from time to time, and corresponding provisions of future laws.

PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
successor entity or entities having similar responsibilities.

Permitted Debt. Indebtedness permitted by §8.1.

Permitted Liens. Liens, security interests and other encumbrances permitted by
§8.2.

Person. Any individual, corporation, limited liability company, partnership,
trust, bank, trust company, land trust, business trust, unincorporated
association, joint venture, business, or other legal entity or organization
(whether or not a legal entity), or any other nongovernmental entity, and any
government or any governmental agency or political Subdivision thereof.

Plan Assets. Assets of any employee benefit plan subject to Part 4, Subtitle B,
Title I of ERISA.

Preferred Distributions. For any period and without duplication, all
Distributions paid, declared but not yet paid or otherwise due and payable
during such period on Preferred Securities issued by any of the Consolidated
Entities. Preferred Distributions shall not include dividends or distributions
(a) paid or payable solely in Equity Interests of identical class payable to
holders of such class of Equity Interests; (b) paid or payable to any of the
Consolidated Entities; or (c) constituting or resulting in the redemption of
Preferred Securities, other than scheduled redemptions not constituting balloon,
bullet or similar redemptions in full.

 

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Preferred Securities. With respect to any Person, Equity Interests in such
Person, which are entitled to preference or priority over any other Equity
Interest in such Person in respect of the payment of dividends or distribution
of assets upon liquidation, or both.

Prime Rate. The rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank as its prime rate in effect at its office located at 270
Park Avenue, New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

Private Placement Notes. $135,000,000 of unsecured notes issued via a private
placement on July 29, 2011 and outstanding on the date hereof which includes
$50,000,000 of 4.68% Senior Guaranteed Notes (Series A) due July 29, 2018;
$72,750,000 of 5.40% Senior Guaranteed Notes (Series B) due July 29, 2021; and
$12,250,000 of 5.57% Senior Guaranteed Notes (Series C) due July 29, 2023 and
$175,000,000 of unsecured notes issued via a private placement on August 31,
2012, September 28, 2012 and November 30, 2012 and outstanding on the date
hereof which includes $18,000,000 of 3.15% Senior Guaranteed Notes (Series A)
due November 30, 2017, $20,000,000 of 3.61% Senior Guaranteed Notes (Series B)
due November 30, 2019; $117,000,000 of 4.17% Senior Guaranteed Notes (Series C)
due November 30, 2022; and $20,000,000 of 4.33% Senior Guaranteed Notes (Series
D) due November 30, 2024.

Rating Agencies. S&P and Moody’s, collectively, and Rating Agency means either
S&P or Moody’s.

Real Estate. All real property at any time owned or leased (in whole or in part)
or operated by the REIT, Borrower or any of its Subsidiaries or Unconsolidated
Entities and which is located in the continental United States or Hawaii,
including, without limitation, the Unencumbered Borrowing Base Properties.

Record. The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Agent with
respect to any Loan referred to in such Note.

Register. See §18.2.

REIT. Mid-America Apartment Communities, Inc., a Tennessee corporation.

REIT Status. With respect to a Person, its status as a real estate investment
trust as defined in §856(a) of the Code.

Related Parties. With respect to any specified Person, such Person’s Affiliates
and the respective directors, officers, employees, agents and advisors of such
Person and such Person’s Affiliates.

Release. See §6.20(c)(iv).

Required Lenders. As of any date, the Lender or Lenders whose aggregate
Commitment Percentage is at least fifty percent (50%) of the Total Commitment;
provided that in determining said percentage at any given time, all then
existing Defaulting Lenders will be disregarded and

 

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excluded and the Commitment Percentages of the Lenders shall be redetermined for
voting purposes only to exclude the Commitment Percentages of such Defaulting
Lenders; provided further that in the event that there are at least two
(2) Lenders that are not Defaulting Lenders, in no event shall the “Required
Lenders” include less than two (2) Lenders that are not Defaulting Lenders.

SEC. The federal Securities and Exchange Commission.

S&P. Standard & Poor’s Ratings Group or its successor.

Sanctions Laws and Regulations. Any sanctions, prohibitions or requirements
imposed by any executive order (an “Executive Order”) or by any sanctions
program administered by OFAC.

Secured Indebtedness. Any Indebtedness of a Person that is secured by a Lien on
any Real Estate or on any ownership interests in any other Person or on any
other assets, provided that the portion of such Indebtedness included in Secured
Indebtedness shall not exceed the sum of the aggregate value of the assets
securing such. Indebtedness at the time such Indebtedness was incurred, plus the
aggregate value of any improvements to such assets, plus the value of any
additional assets provided to secure such Indebtedness. Notwithstanding the
foregoing, Secured Indebtedness shall exclude Indebtedness that is secured
solely by ownership interests in another Person that owns Real Estate which is
encumbered by a mortgage securing Indebtedness.

Secured Recourse Indebtedness. With respect to any Person as of any date of
determination, Secured Indebtedness of other Persons which such first Person has
guaranteed or is otherwise recourse to such first Person.

Stabilized Property. Any Real Estate that has had an Occupancy Rate of not less
than 90% for not less than three (3) consecutive months. Once a project becomes
a Stabilized Property under this Agreement, it shall remain a Stabilized
Property.

State. A state of the United States of America and the District of Columbia.

Statutory Reserve Rate. A fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentage (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board of Governors to which the Agent is subject with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board of Governors). Such reserve percentage
shall include those imposed pursuant to such Regulation D. LIBOR Rate Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

Stock Investments. Investment in Persons that are not Unconsolidated Entities or
Subsidiaries.

 

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Subsidiary. For any Person, any corporation, partnership, limited liability
company or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other individuals performing similar
functions of such corporation, partnership, limited liability company or other
entity (without regard to the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person, and shall include all Persons the accounts of which are
consolidated with those of such Person pursuant to GAAP.

Subsidiary Guarantors. The Persons that are a party to the Guaranty (other than
REIT) from time to time, including any and all Additional Subsidiary Guarantors.

Term Loan or Term Loans. An individual term loan or the aggregate term loans, as
the case may be, in the maximum principal amount of $250,000,000.00 to be made
by the Lenders hereunder as more particularly described in §2. All Term Loans
shall be made in Dollars.

Term Loan Notes. See §2.1(b).

Titled Agents. The Arranger, and any syndication agent or documentation agent.

Total Commitment. The sum of the Commitments of the Lenders, as in effect from
time to time. As of the date of this Agreement, the Total Commitment is
$250,000,000.00.

Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

Unconsolidated Allocation Percentage. As of any date of determination with
respect to any Unconsolidated Entity, the aggregate percentage ownership
interest of the Consolidated Entities in such Unconsolidated Entity as of such
date.

Unencumbered Adjusted NOI. For any period of determination, Adjusted Net
Operating Income from Unencumbered Borrowing Base Properties; provided, however,
that in no event shall any Adjusted Net Operating Income from the Headquarters
be included in the calculation of Unencumbered Adjusted NOI.

Unencumbered Asset Value. As of the date of determination, without duplication,
the sum of the following amounts on such date, all as determined for the
Consolidated Entities on a consolidated basis in accordance with GAAP:
(i) Unrestricted Cash and Cash Equivalents, (ii). the Capitalized Value of all
Unencumbered Borrowing Base Properties (excluding the Capitalized Value of
Unencumbered Borrowing Base Properties that are classified as Development
Properties as of such date and the Capitalized Value of all Unencumbered
Borrowing Base Properties that were not owned by any Consolidated Entity for
four full fiscal quarters as of such date) which are multifamily properties,
(iii) without duplication, the undepreciated book value of all Unencumbered
Borrowing Base Properties which are multifamily properties and are owned or in
operation by any Consolidated Entity for less than four (4) full fiscal quarters
as of such date and all Unencumbered Borrowing Base Properties that are
classified as Development Properties as of such date, and (iv) without
duplication, the undepreciated book value of the Headquarters and all
Unencumbered Borrowing Base Properties that are classified as Unimproved Land as
of such date. For purposes of this definition, to the

 

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extent (a) the Unencumbered Asset Value attributable to any single property
would exceed ten percent (10%) of the Unencumbered Asset Value, (b) the
Unencumbered Asset Value attributable to the total of all of Development
Properties, Unimproved Land and Unrestricted Cash and Cash Equivalents would
exceed twenty percent (20%) of Unencumbered Asset Value, (c) the Unencumbered
Asset Value attributable to Unimproved Land would exceed ten percent (10%) of
Unencumbered Asset Value, and (d) the Unencumbered Asset Value attributable to
assets owned by REIT (other than the Borrower or a Subsidiary of the Borrower)
would exceed fifteen percent (15%) of Unencumbered Asset Value, in each, such
case such excess shall be excluded.

Unencumbered Borrowing Base Properties. Eligible Real Estate which satisfy all
conditions set forth in §7.17(a), or which have been included in the calculation
of the Borrowing Base Availability pursuant to §7.17(b). The initial properties
designated by the Borrower to be Unencumbered Borrowing Base Properties are
described on Schedule 1.2 hereto.

Unencumbered Debt Service. As of any date of determination the greater of
(a) five percent (5%) multiplied by the total amount of Unsecured Indebtedness
and (b) total interest expense accrued with respect to Unsecured Indebtedness
for the previous four (4) fiscal quarters.

Unconsolidated Entity. Any Person in which the REIT has an Investment (a) that
is not consolidated with REIT in accordance with GAAP or (b) is not a
Subsidiary.

Unencumbered Interest Coverage Ratio. As of any date of determination, the
Unencumbered Adjusted NOI divided by the Unencumbered Debt Service tested on a
trailing four quarter basis. In the event the five percent (5%) methodology is
utilized to calculate Unencumbered Debt Service, the Unencumbered Adjusted NOI,
for such determination only, shall be further adjusted to annualize performance
of properties that have not been owned by a Consolidated Entity for four
(4) full fiscal quarters and fully exclude the performance of sold properties.

Unhedged Variable Rate Debt. Any Indebtedness with respect to which the interest
is not fixed (or hedged to a fixed rate) for the entire term of such
Indebtedness to maturity.

Unimproved Land. Land to be used primarily for the development of multifamily
properties on which no development (other than improvements that are not
material and are temporary in nature) has occurred and on which no development
is scheduled to occur within the following twelve (12) months.

Unrestricted Cash and Cash Equivalents. As of any date of determination, the sum
of (a) the aggregate amount of Unrestricted cash and (b) the aggregate amount of
Unrestricted Cash Equivalents (valued at fair market value). As used in this
definition, “Unrestricted” means the specified asset is not subject to any
escrow, cash trap, negative pledge, reserves or Liens or claims of any kind in
favor of any Person.

Unsecured Indebtedness. With respect to the REIT and its Subsidiaries as of any
date of determination, the Indebtedness of such Persons which is not Secured
Indebtedness.

 

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Wholly Owned Subsidiary. As to a Person, any Subsidiary of such first Person
that is directly or indirectly owned one hundred percent (100%) by such first
Person.

§1.2. Rules of Interpretation.

(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) A reference to any law includes any amendment or modification of such law.

(d) A reference to any Person includes its permitted successors and permitted
assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to
them by GAAP applied on a consistent basis by the accounting entity to which
they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) The words “approval” and “approved”, as the context requires, means an
approval in writing given to the party seeking approval after full and fair
disclosure to the party giving approval of all material facts necessary in order
to determine whether approval should be granted.

(h) All terms not specifically defined herein or by GAAP, which terms are
defined in the Uniform Commercial Code as in effect in the State of New York,
have the meanings assigned to them therein.

(i) Reference to a particular “§”, refers to that section of this Agreement
unless otherwise indicated.

(j) The words “herein”, “hereof”, “hereunder” and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

(k) In the event of any change in generally accepted accounting principles after
the date hereof or any other change in accounting procedures pursuant to §7.3
which would affect the computation of any financial covenant, ratio or other
requirement set forth in any Loan Document, then upon the request of the
Borrower, Guarantors or Agent, the Borrower, the Guarantors, the Agent and the
Lenders shall negotiate promptly, diligently and in good faith in order to amend
the provisions of the Loan Documents such that such financial covenant, ratio or
other requirement shall continue to provide substantially the same financial
tests or restrictions of the Borrower and the Guarantors as in effect prior to
such accounting change, as determined by the Required Lenders in their good
faith judgment. Until such time as

 

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such amendment shall have been executed and delivered by the Borrower, the
Guarantors, the Agent and the Required Lenders, such financial covenants, ratio
and other requirements, and all financial statements and other documents
required to be delivered under the Loan Documents, shall be calculated and
reported as if such change had not occurred.

 

§2. THE CREDIT FACILITY.

§2.1. Term Loans.

(a) Subject to the terms and conditions set forth in this Agreement, each of the
Lenders severally agrees to lend to the Borrower, and the Borrower may borrow,
Term Loans on the Closing Date or the applicable Drawdown Date thereafter during
the Commitment Period upon notice by the Borrower to the Agent given in
accordance with §2.7, such sums as are requested by the Borrower for the
purposes set forth in §2.9 up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested) at any one time equal
to the lesser of (i) such Lender’s Commitment and (ii) such Lender’s Commitment
Percentage of the Borrowing Base Availability; provided, that, in all events no
Default or Event of Default shall have occurred and be continuing or would arise
as a result thereof; and provided, further, that the outstanding principal
amount of the Term Loans (after giving effect to all amounts requested), shall
not at any time exceed the Total Commitment or cause a violation of the
covenants set forth in §9.1, §9.2 or §9.3. The Term Loans shall be made pro rata
in accordance with each Lender’s Commitment Percentage. Each request for a Term
Loan hereunder shall constitute a representation and warranty by the Borrower
that all of the conditions required of the Borrower set forth in §10 and §11
have been satisfied on the date of such request. The Agent may assume that the
conditions in §10 and §11 have been satisfied unless it receives prior written
notice from a Lender that such conditions have not been satisfied. No Lender
shall have any obligation to make Term Loans to the Borrower in the maximum
aggregate principal outstanding balance of more than the principal face amount
of its Term Loan Note.

(b) The Term Loans shall be evidenced by separate promissory notes of the
Borrower in substantially the form of Exhibit A hereto (collectively, the “Term
Loan Notes”), dated of even date with this Agreement (except as otherwise
provided in §18.3) and completed with appropriate insertions. One Term Loan Note
shall be payable to the order of each Lender in the principal amount equal to
such Lender’s Commitment or, if less, the outstanding amount of all Loans made
by such Lender, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes Agent to make or cause to be made, at or about the time
of the Drawdown Date of any Term Loan or the time of receipt of any payment of
principal thereof, an appropriate notation on Agent’s Record reflecting the
making of such Term Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Term Loans set forth on Agent’s Record shall be
prima facie evidence, absent manifest error, of the principal amount thereof
owing and unpaid to each Lender, but the failure to record, or any error in so
recording, any such amount on Agent’s Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Term Loan Note to make
payments of principal of or interest on any Term Loan Note when due.

 

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§2.2. Termination and Reduction of Commitments. (a) Unless previously
terminated, the unused Commitments shall terminate on the last day of the
Commitment Period.

(b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that each reduction of the Commitments shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000.

(c) The Borrower shall notify the Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this §2.2 at least three (3)Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Agent shall advise the Lenders of the contents thereof. Each notice
delivered by the Borrower pursuant to this §2.2 shall be irrevocable; provided
that a notice of termination of the Commitments delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Agent on or prior to the specified effective date) if such condition is
not satisfied. Any termination or reduction of the Commitments shall be
permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments.

§2.3. [Intentionally Omitted.]

§2.4. [Intentionally Omitted.]

§2.5. [Intentionally Omitted.]

§2.6. Interest on Loans.

(a) Each Base Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the date on which such Base Rate Loan is
repaid or converted to a LIBOR Rate Loan at the rate per annum equal to the sum
of the Alternate Base Rate plus the Applicable Margin.

(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of each Interest Period with
respect thereto at the rate per annum equal to the sum of the Adjusted LIBO Rate
determined for such Interest Period plus the Applicable Margin.

(c) The Borrower promises to pay interest on each Loan in arrears on each
Interest Payment Date with respect thereto.

(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other
Type as provided in §4.1.

§2.7. Requests for Term Loans. Except with respect to the initial Term Loan on
the Closing Date, the Borrower shall give to the Agent written notice executed
by an Authorized Officer in the form of Exhibit D hereto (or telephonic notice
confirmed in writing in the form of Exhibit D hereto) of each Term Loan
requested hereunder (a “Loan Request”) by 11:00 a.m. (New York City time) one
(1) Business Day prior to the proposed Drawdown Date with respect

 

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to Base Rate Loans and three (3) Business Days prior to the proposed Drawdown
Date with respect to LIBOR Rate Loans. Each such notice shall specify with
respect to the requested Term Loan the proposed principal amount of such Term
Loan, the Type of Term Loan, the initial Interest Period (if applicable) for
such Term Loan and the Drawdown Date. Each such notice shall also contain (i) a
general statement as to the purpose for which such advance shall be used (which
purpose shall be in accordance with the terms of §2.9) and (ii) a certification
by an Authorized Officer that the Borrower and Guarantors are and will be in
compliance with all covenants under the Loan Documents after giving effect to
the making of such Term Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Lenders thereof. Each such Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Term Loan requested from the Lenders on the proposed Drawdown Date.
Each Loan Request shall be in a minimum aggregate amount of $20,000,000.00;
provided, however, that the Borrower shall not make more than a total of five
(5) Loan Requests and there shall be no more than six (6) LIBOR Rate Loans
outstanding at any one time.

§2.8. Funds for Loans.

(a) Not later than 12:00 p.m. (New York City time) on the proposed Drawdown Date
of any Term Loans, each of the Lenders will make available to the Agent, at the
Agent’s Head Office, in immediately available funds, the amount of such Lender’s
Commitment Percentage of the amount of the requested Term Loans which may be
disbursed pursuant to §2.1. Upon receipt from each such Lender of such amount,
and upon receipt of the documents required by §10 and §11 and the satisfaction
of the other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such Term Loans made
available to the Agent by the Lenders, as applicable, as instructed by Borrower
not later than 1:00 p.m. (New York City time) on the proposed Drawdown Date of
any Term Loans. The failure or refusal of any Lender to make available to the
Agent at the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Term Loans shall not relieve any other
Lender from its several obligation hereunder to make available to the Agent the
amount of such other Lender’s Commitment Percentage of any requested Term Loans.

(b) Unless the Agent shall have been notified by any Lender prior to the
applicable Drawdown Date that such Lender will not make available to Agent such
Lender’s Commitment Percentage of a proposed Loan, Agent may in its discretion
assume that such Lender has made such Loan available to Agent in accordance with
the provisions of this Agreement and the Agent may, if it chooses, in reliance
upon such assumption make such Loan available to the Borrower, and such Lender
shall be liable to the Agent for the amount of such advance. If such Lender does
not pay such corresponding amount upon the Agent’s demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall promptly pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a per annum rate equal to
(i) from the Borrower at the applicable rate for such Loan or (ii) from a Lender
at the Federal Funds Effective Rate plus one percent (1%).

 

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§2.9. Use of Proceeds. The Borrower will use the proceeds of the Loans solely to
(a) pay closing costs in connection with this Agreement, (b) repay the principal
amount of loans outstanding under the Existing Credit Facilities and finance
acquisitions and developments and (c) pay any applicable costs of the Borrower
or the REIT in connection with the Merger Transaction.

§2.10. Extension of Maturity Date.

(a) Not earlier than 90 days or later than 30 days prior to the scheduled
Maturity Date, Borrower may, upon written notice to Agent (which shall promptly
notify Lenders) and satisfaction of the conditions precedent set forth in
§2.10(b), elect to extend the Maturity Date to June 14, 2015 (the date of
receipt of such notice by the Agent from the Borrower is referred to herein as
the “Extension Notice Date”).

(b) The extension of the Maturity Date contemplated by §2.10(a) shall become
effective on the date (the “Extension Effective Date”) on which the following
conditions precedent have been satisfied:

(i) The Agent shall have received the written notice referred to in §2.10(a);

(ii) Borrower shall have paid to the Agent, for the benefit of each Lender, an
extension fee in an amount equal to 0.10% times the aggregate principal amount
of the outstanding Loans of each such Lender as of such date;

(iii) On the Extension Notice Date and Extension Effective Date, there shall
exist no Default or Event of Default; and

(iv) The representations and warranties made by the Borrower and the Guarantors
in the Loan Documents or otherwise made by or on behalf of the Borrower or the
Guarantors in connection therewith or after the date thereof shall have been
true and correct in all material respects when made and shall also be true and
correct in all material respects on the Extension Notice Date and Extension
Effective Date, (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date, and
that any representation or warranty that is qualified by any materiality
standard shall be required to be true and correct in all respects).

Upon the satisfaction of the conditions precedent set forth in this §2.10(b) and
the occurrence of the Extension Effective Date, the Agent shall promptly confirm
to the Borrower and the Lenders such extension and the Extension Effective Date.

§2.11. [Intentionally Omitted.]

§2.12. [Intentionally Omitted.]

 

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§2.13. Defaulting Lenders.

(a) If for any reason any Lender shall be a Defaulting Lender, then, in addition
to the rights and remedies that may be available to the Agent or the Borrower
under this Agreement or applicable law, such Defaulting Lender’s right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Agent or to be taken
into account in the calculation of the Required Lenders or all of the Lenders,
shall be suspended during the pendency of such failure or refusal. If a Lender
is a Defaulting Lender because it has failed to make timely payment to the Agent
of any amount required to be paid to the Agent hereunder (without giving effect
to any notice or cure periods), in addition to other rights and remedies which
the Agent or the Borrower may have under the immediately preceding provisions or
otherwise, the Agent shall be entitled (i) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date on
which the payment was due until the date on which the payment is made at the
Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction of
the defaulted payment and any related interest, any amounts otherwise payable to
such Defaulting Lender under this Agreement or any other Loan Document and
(iii) to bring an action or suit against such Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest.
Any amounts received by the Agent in respect of a Defaulting Lender’s Loans
shall be applied as set forth in §2.13(d).

(b) Any Non-Defaulting Lender may, but shall not be obligated, in its sole
discretion, to acquire all or a portion of a Defaulting Lender’s Commitment and
Loans. Any Lender desiring to exercise such right shall give written notice
thereof to the Agent and the Borrower no sooner than two (2) Business Days and
not later than five (5) Business Days after such Defaulting Lender became a
Defaulting Lender. If more than one Lender exercises such right, each such
Lender shall have the right to acquire an amount of such Defaulting Lender’s
Commitments and Loans in proportion to the Commitments of the other Lenders
exercising such right. If after such 5th Business Day, the Lenders have not
elected to purchase all of the Commitments and Loans of such Defaulting Lender,
then the Borrower may, by giving written notice thereof to the Agent, such
Defaulting Lender and the other Lenders, demand that such Defaulting Lender
assign its Commitments to an eligible assignee subject to and in accordance with
the provisions of §18.1 for the purchase price provided for below. No party
hereto shall have any obligation whatsoever to initiate any such replacement or
to assist in finding an eligible assignee. Upon any such purchase or assignment,
and any such demand with respect to which the conditions specified in §18.1 have
been satisfied, the Defaulting Lender’s interest in the Loans and its rights
hereunder (but not its liability in respect thereof or under the Loan Documents
or this Agreement to the extent the same relate to the period prior to the
effective date of the purchase) shall terminate on the date of purchase, and the
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement. The purchase price
for the Commitment of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans outstanding and owed by the Borrower to the
Defaulting Lender plus any accrued but unpaid interest thereon, accrued but
unpaid fees and all other Obligations owing to such Defaulting Lender. Prior to
payment of such purchase price to a Defaulting Lender, the Agent shall apply
against such purchase price any amounts retained by the Agent pursuant to
§2.13(d).

 

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(c) [Intentionally Omitted.]

(d) Any payment of principal, interest, fees or other amounts received by the
Agent for the account of such Defaulting Lender (whether voluntary or mandatory,
at maturity, or otherwise, and including any amounts made available to the Agent
for the account of such Defaulting Lender pursuant to §13), shall be applied at
such time or times as may be determined by the Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Agent hereunder;
second, as the Borrower may request (so long as no Default or Event of Default
exists), to the funding of any Loan in respect of which such Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by the Agent; third, if so determined by the Agent and the Borrower,
to be held in a non-interest bearing deposit account and released pro rata in
order to (x) satisfy obligations of such Defaulting Lender to fund Loans under
this. Agreement and (y) be held as cash collateral for future funding
obligations of such Defaulting Lender; fourth, to the payment of any amounts
owing to the Agent or the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by the Agent or any Lender against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; fifth, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and sixth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(i) such payment is a payment of the principal amount of any Term Loans in
respect of which such Defaulting Lender has not fully funded its appropriate
share and (ii) such Term Loans were made at a time when the conditions set forth
in §10 and §11, to the extent required by this Agreement, were satisfied or
waived, such payment shall be applied solely to pay the Term Loans of all
Non-Defaulting Lenders on a pro rata basis until such time as all Term Loans are
held by the Lenders pro rata in accordance with their Commitment Percentages,
prior to being applied to the payment of any Term Loans of, such Defaulting
Lender. Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting
Lender or to post cash collateral pursuant to this §2.13(d) shall be deemed paid
to and redirected by such Defaulting Lender, and each Lender irrevocably
consents hereto, and to the extent allocated to the repayment of principal of
the Loan, shall not be considered outstanding principal under this Agreement.

(e) [Intentionally Omitted.]

(f) [Intentionally Omitted.]

(g) If the Borrower (if no Default or Event of Default has occurred and is
continuing) and the Agent agree in writing in their sole discretion that a
Defaulting Lender should no longer be deemed to be a Defaulting Lender, the
Agent will so notify the parties hereto, whereupon as of the date specified in
such notice and subject to any conditions set forth therein (which may include
arrangements with respect to any cash collateral), that Lender will,

 

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to the extent applicable, purchase that portion of outstanding Loans of the
other Lenders or take such other actions as the Agent may determine to be
necessary to cause the Loans to be held on a pro rata basis by the Lenders in
accordance with their Commitments, whereupon such Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
such Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from such Lender’s having been a Defaulting
Lender.

 

§3. REPAYMENT OF THE LOANS.

§3.1. Stated Maturity. The Borrower promises to pay on the Maturity Date and
there shall become absolutely due and payable on the Maturity Date all of the
Term Loans outstanding on such date, together with any and all accrued and
unpaid interest thereon and all other Obligations.

§3.2. Mandatory Prepayments.

(a) If at any time (x) the sum of the aggregate principal amount of all Term
Loans made hereunder exceeds the Total Commitment or (y) the aggregate
outstanding amount of Consolidated Total Unsecured Indebtedness at such time
(including the sum of the aggregate outstanding principal amount of the Term
Loans) exceeds the Borrowing Base Availability then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Lenders, as applicable, for application to the Loans as provided
in §3.4, together with any additional amounts payable pursuant to §4.8.

(b) If any Capital Markets Transaction is consummated after the Closing Date,
the Borrower shall apply 100% of the Net Cash Proceeds of such Capital Markets
Transaction to the prepayment of the Loans as provided in §3.4, together with
any additional amounts payable pursuant to §4.8, on the date that such Net Cash
Proceeds are received.

§3.3. Optional Prepayments.

(a) The Borrower shall have the right, at its election, to prepay the
outstanding amount of the Term Loans, as a whole or in part, at any time and
from time to time without penalty or premium; provided, that if any prepayment
of the outstanding amount of any LIBOR Rate Loans pursuant to this §3.3 is made
on a date that is not the last day of the Interest Period relating thereto, such
prepayment shall be accompanied by the payment of any amounts due pursuant to
§4.8.

(b) The Borrower shall give the Agent, no later than 10:00 a.m. (New York City
time) at least three (3) days prior written notice of any prepayment pursuant to
this §3.3 of LIBOR Rate Loans unless a shorter notice period is agreed to in
writing by the Agent, and one (1) Business Day’s prior written notice of any
prepayment pursuant to this §3.3 of Base Rate Loans, in each case specifying the
proposed date of prepayment of the Loans and the principal amount to be prepaid
(provided that any such notice may be revoked or modified upon one (1) day’s
prior notice to the Agent).

 

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§3.4. Partial Prepayments. Each partial prepayment of the Loans under §3.3 shall
be in a minimum amount of $100,000.00 or an integral multiple of $100,000.00 in
excess thereof, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of payment. Each partial payment under §3.2 and
§3.3 shall be applied first to the accrued but unpaid interest and then to the
principal of Term Loans. In the absence of instruction by the Borrower,
prepayments shall be applied first to the principal of Base Rate Loans, and then
to the principal of LIBOR Rate Loans.

§3.5. [Intentionally Omitted.]

§3.6. Effect of Prepayments. Amounts of the Loans prepaid under §3.2 and §3.3
may not be reborrowed.

 

§4. CERTAIN GENERAL PROVISIONS.

§4.1. Conversion Options.

(a) The Borrower may elect from time to time to convert any of its outstanding
Term Loans to a Term Loan of another Type and such Term Loans shall thereafter
bear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided,
that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate
Loan, the Borrower shall give the Agent at least one (1) Business Day’s prior
written notice of such election, and such conversion shall only be made on the
last day of the Interest Period with respect to such LIBOR Rate Loan; (ii) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the
Borrower shall give the Agent at least three (3) LIBOR Business Days’ prior
written notice of such election and the Interest Period requested for such Loan,
the principal amount of the Loan so converted shall be in a minimum aggregate
amount of $1,000,000.00 or an integral multiple of $500,000.00 in excess thereof
and, after giving effect to the making of such Loan, there shall be no more than
six (6) LIBOR Rate Loans outstanding at any one time unless all of the Lenders
otherwise consent in writing; and (iii) no Loan may be converted into a LIBOR
Rate Loan when any Default or Event of Default has occurred and is continuing.
All or any part of the outstanding Term Loans of any Type may be converted as
provided herein, provided that no partial conversion shall result in a Base Rate
Loan in a principal amount of less than $1,000,000.00 or an integral multiple of
$100,000.00 or a LIBOR Rate Loan in a principal amount of less than
$1,000,000.00 or an integral multiple of $500,000.00. On the date on which such
conversion is being made, each Lender shall take such action as is necessary to
transfer its Commitment Percentage of such Loans to its Domestic Lending Office
or its LIBOR Lending Office, as the case may be. Each Conversion/Continuation
Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan
shall be irrevocable by the Borrower. The Agent shall promptly notify the
Lenders of the applicable Adjusted LIBO Rate or Alternate Base Rate.

(b) Any LIBOR Rate Loan may be continued as such Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
terms of §4.1; provided that no LIBOR Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Default or Event of
Default.

 

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(c) In the event that the Borrower does not notify the Agent of its election
hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically
continued at the end of the applicable Interest Period as a LIBOR Rate Loan for
an Interest Period of one month unless such Interest Period shall be greater
than the time remaining until the Maturity Date, in which case such Loan shall
be automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.

§4.2. Fees.

(a) The Borrower agrees to pay to JPMorgan, the Agent and the Arranger for their
own account certain fees for services rendered or to be rendered in connection
with the Loans as provided pursuant to a fee letter dated June 14, 2013, between
the Borrower, REIT, JPMorgan and the Arranger (the “Agreement Regarding Fees”).
All such fees shall be fully earned when paid and nonrefundable under any
circumstances.

(b) The Borrower agrees to pay to the Agent for the account of each Lender (in
accordance with its Commitment Percentage), a “ticking fee” which shall accrue
and be payable on the daily amount of the unused Commitment of such Lender
beginning August 13, 2013, and continuing through the last day of the Commitment
Period, at a rate of 0.20% per annum on the sum of the average daily unused
portion of the Commitments. All such fees shall be fully earned when paid and
nonrefundable under any circumstances. Accrued ticking fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the last day of the Commitment Period commencing on September 30, 2013. All
ticking fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

§4.3. [Intentionally Omitted].

§4.4. Funds for Payments.

(a) All payments of principal, interest, facility fees, closing fees and any
other amounts due hereunder or under any of the other Loan Documents shall be
made to the Agent, for the respective accounts of the Lenders and the Agent, as
the case may be, at the Agent’s Head Office, not later than 2:00 p.m. (New York
City time) on the day when due, in each case in lawful money of the United
States in immediately available funds. If not received by 2:00 p.m. (New York
City time) on the day when due, the Agent is hereby authorized to charge the
accounts of the Borrower with JPMorgan, on the dates when the amount thereof
shall become due and payable, with the amounts of the principal of and interest
on the Loans and all fees, charges, expenses and other amounts owing to the
Agent and/or the Lenders under the Loan Documents. Subject to the foregoing, all
payments made to Agent on behalf of the Lenders, and actually received by Agent,
shall be deemed received by the Lenders on the date actually received by Agent.

(b) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of and

 

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without deduction for any taxes (other than income or franchise taxes imposed on
any Lender and any Excluded FATCA Tax), levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents, the Borrower will pay to the Agent,
for the account of the Lenders or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Lenders or the Agent to receive the same net amount which the Lenders or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrower. If any such Lender, to the extent it may lawfully do so,
fails to deliver the above forms or other documentation, then the Agent may
withhold from any payments to be made to such Lender under any of the Loan
Documents such amounts as are required by the Internal Revenue Code. If any
Governmental Authority asserts that the Agent did not properly withhold or
backup withhold, as the case may be, any tax or other amount from payments made
to or for the account of any Lender, such Lender shall indemnify the Agent
therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, and costs
and expenses (including all reasonable fees and disbursements of any law firm or
other external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Agent. The obligation of the Lenders
under this section shall survive the termination of the Commitments, repayment
of all Obligations and all the resignation or replacement of the Agent. Without
limitation of §4.4(b), if a payment made to a Lender under any Loan Document
would be subject to United States federal withholding tax imposed by FATCA if
such Lender were to fail to comply with the applicable reporting and document
provision requirements of FATCA (including those contained in Section 1741(b) or
1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver
to the Borrower and the Agent, at the time or times prescribed by law and at
such time or times reasonably requested by either, such documentation prescribed
by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Internal Revenue Code) and such additional documentation reasonably requested by
the Borrower and/or the Agent as may be necessary for the Borrower and the Agent
to comply with their obligations under FATCA, to determine that such Lender has
or has not complied with such Lender obligations under FATCA and, as necessary,
to determine the amount to deduct and withhold from such payment. The Borrower
will deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
the Borrower hereunder or under any other Loan Document.

(c) Each Lender organized under the laws of a jurisdiction outside the United
States, if requested in writing by the Borrower (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower with such duly
executed form(s) or statement(s) which may, from time to time, be prescribed by
law and, which, pursuant to applicable provisions of (i) an income tax treaty
between the United States and the country of residence of such Lender, (ii) the
Code, or (iii) any applicable rules or regulations in effect under (i) or
(ii) above, indicates the withholding status of such Lender; provided that
nothing herein (including without limitation the failure or inability to provide
such form or statement)

 

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shall relieve the Borrower of its obligations under §4.4(b). In the event that
the Borrower shall have delivered the certificates or vouchers described above
for any payments made by the Borrower and such Lender receives a refund of any
taxes paid by the Borrower pursuant to §4.4(b), such Lender will pay to the
Borrower the amount of such refund promptly upon receipt thereof; provided that
if at any time thereafter such Lender is required to return such refund, the
Borrower shall promptly repay to such Lender the amount of such refund upon
receipt from such Lender of a demand therefor.

(d) The obligations of the Borrower to the Lenders under this Agreement shall be
absolute, unconditional and irrevocable, and shall be paid and performed
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including, without limitation, the following circumstances: (i) any
lack of validity or enforceability of this Agreement, or any of the other Loan
Documents; (ii) the existence of any claim, set-off, defense or any right which
the Borrower or any of its Subsidiaries or Affiliates may have at any time
against the Lenders (other than the defense of payment to the Lenders in
accordance with the terms of this Agreement) or any other Person, whether in
connection with this Agreement, any other Loan Document, or any unrelated
transaction; (iii) any breach of any agreement between the Borrower, any
Guarantor or any of their. Subsidiaries or Affiliates; (iv) the surrender or
impairment of any security for the performance or observance of any of the terms
of any of the Loan Documents; (v) the occurrence of any Default or Event of
Default; and (vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, provided that such other circumstances or
happenings shall not have been the result of gross negligence or willful
misconduct on the part of the Lenders as determined by a court of competent
jurisdiction after the exhaustion of all applicable appeal periods.

§4.5. Computations. All computations of interest on the LIBOR Rate Loans and of
other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. All computations of interest on Base Rate
Loans (including Base Rate Loans determined by reference to the Adjusted LIBO
Rate) shall be based on a year of 365 or 366 days, as applicable, and paid for
the actual number of days elapsed. Except as otherwise provided in the
definition of the term “Interest Period” with respect to LIBOR Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding Loans as reflected on the records of the Agent
from time to time shall be considered prima facie evidence of such amount absent
manifest error.

§4.6. Suspension of LIBOR Rate Loans. In the event that, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall reasonably determine that adequate and reasonable methods do not exist for
ascertaining Adjusted LIBO Rate for such Interest Period, or the Agent shall
reasonably determine that Adjusted LIBO Rate will not accurately and fairly
reflect the cost of the Lenders making or maintaining LIBOR Rate Loans for such
Interest Period, the Agent shall forthwith give notice of such determination
(which shall be conclusive and binding on the Borrower and the Lenders absent
manifest error) to the Borrower and the Lenders. In such event (a) any Loan
Request with respect to a LIBOR Rate Loan shall be automatically withdrawn and
shall be deemed a request for a Base Rate Loan and (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period

 

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applicable thereto, become a Base Rate Loan, and the obligations of the Lenders
to make LIBOR Rate Loans shall be suspended until the Agent reasonably
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent shall so notify the Borrower and the Lenders.

§4.7. Illegality. Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or the interpretation or application
thereof shall make it unlawful, or any central bank or other governmental
authority having jurisdiction over a Lender or its LIBOR Lending Office shall
assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans,
such Lender shall forthwith give notice of such circumstances to the Agent and
the Borrower and thereupon (a) the commitment of the Lenders to make LIBOR Rate
Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Rate Loans or within such earlier
period as may be required by law. Notwithstanding the foregoing, before giving
such notice, the applicable Lender shall designate a different lending office if
such designation will void the need for giving such notice and will not, in the
judgment of such Lender, be otherwise materially disadvantageous to such Lender
or increase any costs payable by Borrower hereunder.

§4.8. Additional Interest. If any LIBOR Rate Loan or any portion thereof is
repaid or is converted to a Base Rate Loan for any reason on a date which is
prior to the last day of the Interest Period applicable to such LIBOR Rate Loan,
or if repayment of the Loans has been accelerated as provided in §12.1, or if a
borrowing, conversion, or continuation of LIBOR Rate Loans does not occur on the
date specified in a Loan Request or a conversion/continuation request pursuant
to §4.1, or if the Borrower fails to repay a LIBOR Rate Loan on the date
specified in a prepayment notice pursuant to §3.3 or when otherwise required
hereunder, the Borrower will pay to the Agent upon demand for the account of the
applicable Lenders in accordance with their respective Commitment Percentages,
in addition to any amounts of interest otherwise payable hereunder, the Breakage
Costs. The Borrower understands, agrees and acknowledges the following: (i) no
Lender has any obligation to purchase, sell and/or match funds in connection
with the use of Adjusted LIBO Rate as a basis for calculating the rate of
interest on a LIBOR Rate Loan; (ii) Adjusted LIBO Rate is used merely as a
reference in determining such rate; and (iii) the Borrower has accepted Adjusted
LIBO Rate as a reasonable and fair basis for calculating such rate and any
Breakage Costs. The Borrower further agrees to pay the Breakage Costs, if any,
whether or not a Lender elects to purchase, sell and/or match funds.

§4.9. Additional Costs, Etc. Notwithstanding anything herein to the contrary, if
any present or future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Lender or the Agent by any central bank or
other fiscal, monetary or other authority (whether or not having the force of
law), shall:

(a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan

 

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Documents, such Lender’s Commitment, or the Loans (other than taxes based upon
or measured by the gross receipts, income or profits of such Lender or the Agent
or its franchise tax), or

(b) materially change the basis of taxation (except for changes in taxes on
gross receipts, income or profits or its franchise tax) of payments to any
Lender of the principal of or the interest on any Loans or any other amounts
payable to any Lender under this Agreement or the other Loan Documents, or

(c) impose or increase or render applicable any special deposit, reserve (other
than the Statutory Reserve Rate), assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law and which are
not already reflected in any amounts payable by the Borrower hereunder) against
assets held by, or deposits in or for the account of or loans by, or commitments
of an office of any Lender; or

(d) impose on any Lender or the Agent any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, such Lender’s
Commitment, or any class of loans or commitments of which any of the Loans or
such Lender’s Commitment forms a part, and the result of any of the foregoing
is:

(i) to increase the cost to any Lender of making, funding, renewing, extending
or maintaining any of the Loans or such Lender’s Commitment, or

(ii) to reduce the amount of principal, interest or other amount payable to any
Lender or the Agent hereunder on account of such Lender’s Commitment or any of
the Loans, or

(iii) to require any Lender or the Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the Agent from the Borrower
hereunder,

then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Lender or (as the case may be) the Agent at any time and
from time to time and as often as the occasion therefor may arise, pay to such
Lender or the Agent such additional amounts as such Lender or the Agent shall
determine in good faith to be sufficient to compensate such Lender or the Agent
for such additional cost, reduction, payment or foregone interest or other sum.
Each Lender and the Agent in determining such amounts may use any reasonable
averaging and attribution methods generally applied by such Lender or the Agent.

§4.10. Capital Adequacy. If after the date hereof any Lender in good faith
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (b) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender’s or
such holding company’s capital as a consequence of such Lender’s commitment to
make Loans hereunder to a level below that which

 

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such Lender or holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full
utilization of such entity’s capital) by any amount deemed by such Lender to be
material, then such Lender may notify the Borrower thereof. The Borrower agrees
to pay to such Lender the amount of such reduction in the return on capital as
and when such reduction is determined, upon presentation by such Lender of a
statement of the amount setting forth the Lender’s calculation thereof. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods generally applied by such Lender.

For purposes of §4.9 and §4.10, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, publications, orders, guidelines and
directives thereunder or issued in connection therewith and all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel. Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall be deemed to have been adopted and gone into effect
after the date hereof regardless of when adopted, enacted or issued.

§4.11. Breakage Costs. The Borrower shall pay all Breakage Costs required to be
paid by them pursuant to this Agreement and incurred from time to time by any
Lender upon demand within fifteen (15) days from receipt of written notice from
Agent, or such earlier date as may be required by this Agreement.

§4.12. Default Interest. Following the occurrence and during the continuance of
any Event of Default, and regardless of whether or not the Agent or the Lenders
shall have accelerated the maturity of the Loans, all Loans shall bear interest
payable on demand at a rate per annum equal to two percent (2.0%) above an
amount equal to the sum of the Alternate Base Rate plus the Applicable Margin in
effect from time to time (the “Default Rate”), until such amount shall be paid
in full (after as well as before judgment), or if any of such amounts shall
exceed the maximum rate permitted by law, then at the maximum rate permitted by
law.

§4.13. Certificate. A certificate setting forth any amounts payable pursuant to
§4.8, §4.9, §4.10, §4.11 or §4.12 and a reasonably detailed explanation of such
amounts which are due, submitted by any Lender or the Agent to the Borrower,
shall be conclusive in the absence of manifest error.

§4.14. Limitation on Interest. Notwithstanding anything in this Agreement or the
other Loan Documents to the contrary, all agreements between or among the
Borrower, the Guarantors, the Lenders and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Lenders exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Lenders in excess of the maximum lawful amount, the interest payable to the
Lenders shall be reduced to the maximum amount permitted under applicable law;
and if from any circumstance the Lenders shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful amount, an
amount equal to any excessive interest shall be applied to the reduction of the

 

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principal balance of the Obligations and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations,
such excess shall be refunded to the Borrower. All interest paid or agreed to be
paid to the Lenders shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal of the Obligations (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law. This Section
shall control all agreements between or among the Borrower, the Guarantors, the
Lenders and the Agent.

§4.15. Certain Provisions Relating to Increased Costs. If a Lender gives notice
of the existence of the circumstances set forth in §4.7 or any Lender requests
compensation for any losses or costs to be reimbursed pursuant to any one or
more of the provisions of §4.4(b) (as a result of the imposition of U.S.
withholding taxes on amounts paid to such Lender under this Agreement), §4.9 or
§4.10, then, upon request of the Borrower, such Lender, as applicable, shall use
reasonable efforts in a manner consistent with such institution’s practice in
connection with loans like the Loan of such Lender to eliminate, mitigate or
reduce amounts that would otherwise be payable by the Borrower under the
foregoing provisions, provided that such action would not be otherwise
prejudicial to such Lender, including, without limitation, by designating
another of such Lender’s offices, branches or affiliates; the Borrower agreeing
to pay all reasonably incurred costs and expenses incurred by such Lender in
connection with any such action. Notwithstanding anything to the contrary
contained herein, if no Default or Event of Default shall have occurred and be
continuing, and if any Lender has given notice of the existence of the
circumstances set forth in §4.7 or has requested payment or compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of §4.4(b) (as a result of the imposition of U.S. withholding taxes on amounts
paid to such Lender under this Agreement), §4.9 or §4.10 and following the
request of the Borrower has been unable to take the steps described above to
mitigate such amounts (each, an “Affected Lender”), then, within thirty
(30) days after such notice or request for payment or compensation, the Borrower
shall have the one-time right as to such Affected Lender, to be exercised by
delivery of written notice delivered to the Agent and the Affected Lender within
thirty (30) days of receipt of such notice, to elect to cause the Affected
Lender to transfer its Commitment and Loans. The Agent shall promptly notify the
remaining Lenders that each of such Lenders shall have the right, but not the
obligation, to acquire a portion of the Commitment and Loans, pro rata based
upon their relevant Commitment Percentages, of the Affected Lender (or if any of
such Lenders does not elect to purchase its pro rata share, then to such
remaining Lenders in such proportion as approved by the Agent). In the event
that the Lenders do not elect to acquire all of the Affected Lender’s Commitment
and Loans, then the Agent and Borrower shall endeavor to obtain a new Lender to
acquire such remaining Commitment and Loans that is reasonably acceptable to
Agent and Borrower and is an eligible assignee pursuant to §18.1. Upon any such
purchase of the Commitment and Loans of the Affected Lender, the Affected
Lender’s interest in the Obligations and its rights hereunder and under the Loan
Documents shall terminate at the date of purchase, and the Affected Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest. The purchase price for the Affected Lender’s Commitment and Loans
shall equal any and all amounts outstanding and owed by the Borrower to the
Affected Lender, including principal, prepayment premium or fee, and all accrued
and unpaid interest or fees and all other Obligations.

 

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§5. UNSECURED OBLIGATIONS; GUARANTY.

§5.1. Unsecured Obligations. The Lenders have agreed to make the Loans to the
Borrower for the account of the Borrower on an unsecured basis. Notwithstanding
the foregoing, the Obligations shall be guaranteed pursuant to the terms of the
Guaranty.

§5.2. Additional Subsidiary Guarantors. In the event that the Borrower shall
request that certain Real Estate of a Wholly Owned Subsidiary of the Borrower be
included as an Unencumbered Borrowing Base Property, the Borrower shall as a
condition thereto, in addition to the requirements of §7.17, cause each such
Wholly Owned Subsidiary to execute and deliver to Agent a Joinder Agreement (and
if such Subsidiary is the first Subsidiary Guarantor, then such Subsidiary
Guarantor, Borrower and REIT shall execute and deliver a Contribution
Agreement), and such Subsidiary shall become a Subsidiary Guarantor hereunder.
Each such Subsidiary shall not be restricted by its respective organizational
documents and applicable law, from serving as a Guarantor hereunder. The
Borrower shall further cause all representations, covenants and agreements in
the Loan Documents with respect to the Guarantors to be true and correct with
respect to each such Subsidiary or other entity. In connection with the delivery
of such Joinder Agreement, the Borrower shall deliver to the Agent such
organizational agreements, resolutions, consents, opinions and other documents
and instruments as the Agent may reasonably require.

§5.3. Release of a Subsidiary Guarantor. The Borrower may request in writing
that the Agent release, and upon receipt of such request the Agent shall release
(subject to the terms hereof), a Subsidiary Guarantor from the Guaranty so long
as: (a) no Default or Event of Default shall then be in existence or would occur
as a result of such release or the removal of Real Estate referred to in clause
(c) below; (b) the Agent shall have received such written request at least ten
(10) Business Days prior to the requested date of release; and (c) any Real
Estate owned or leased by such Subsidiary Guarantor shall be removed from the
Unencumbered Borrowing Base Properties in accordance with §7.17. Delivery by the
Borrower to the Agent of any such request for a release shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request. Notwithstanding the foregoing, the foregoing provisions shall not apply
to REIT, which may only be released upon the written approval of Agent and all
of the Lenders.

 

§6. REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Agent and the Lenders as follows.

§6.1. Corporate Authority, Etc.

(a) Incorporation; Good Standing. REIT is a corporation duly organized pursuant
to its charter filed with the Tennessee Secretary of State, and is validly
existing and in good standing under the laws of Tennessee. REIT is organized and
conducts its business in a manner which enables it to qualify as a real estate
investment trust under, and is entitled to the benefits of, §856 of the Code,
and has elected to be treated as a real estate investment trust pursuant to the
Code. The Borrower is a limited partnership duly organized pursuant to its
certificate of limited partnership filed with the Tennessee Secretary of State,
and is validly

 

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existing and in good standing under the laws of Tennessee. Each of REIT and the
Borrower (i) has all requisite power to own its respective property and conduct
its respective business as now conducted and as presently contemplated, and
(ii) is in good standing and duly authorized to do business in the jurisdictions
where the Unencumbered Borrowing Base Properties owned or leased by it are
located and in each other jurisdiction where a failure to be so qualified in
such other jurisdiction could have a Material Adverse Effect.

(b) Subsidiaries. Each of the Subsidiary Guarantors and other Subsidiaries of
the Borrower and REIT (i) is a corporation, limited partnership, general
partnership, limited liability company or trust duly organized under the laws of
its State of organization and is validly existing and in good standing under the
laws thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where a
Unencumbered Borrowing Base Property owned or leased by it is located and in
each other jurisdiction where a failure to be so qualified could have a Material
Adverse Effect.

(c) Authorization. The execution, delivery and performance of this Agreement and
the other Loan Documents to which any of the Borrower or the Guarantors is a
party and the transactions contemplated hereby and thereby (i) are within the
authority of such Person, (ii) have been duly authorized by all necessary
proceedings on the part of such Person, (iii) do not and will not conflict with
or result in any breach or contravention of any provision of law, statute, rule
or regulation to which such Person is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, (iv) do not and will
not conflict with or constitute a default (whether with the passage of time or
the giving of notice, or both) under any provision of the partnership agreement,
articles of incorporation or other charter documents or bylaws of, or any
agreement or other instrument binding upon, such Person or any of its
properties, (v) do not and will not result in or require the imposition of any
lien or other encumbrance on any of the properties, assets or rights of such
Person, and (vi) do not require the approval or consent of any Person other than
those already obtained and delivered to the Agent.

(d) Enforceability. The execution and delivery of this Agreement and the other
Loan Documents to which the Borrower or any of the Guarantors is a party are
valid and legally binding obligations of such Person enforceable in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights and general principles of equity.

§6.2. Governmental Approvals. The execution, delivery and performance. of this
Agreement and the other Loan Documents to which the Borrower or any Guarantor is
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing or registration with, or the giving of any
notice to, any court, department, board, governmental agency or authority other
than those already obtained except for those filings after the date hereof as
may be required as a publicly traded real estate investment trust.

§6.3. Title to Properties. Except as indicated on Schedule 6.3 hereto, REIT and
its Subsidiaries own or lease all of the assets reflected in the pro-forma
consolidated balance sheet

 

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of REIT as of the Balance Sheet Date or acquired or leased since that date
(except property and assets sold or otherwise disposed of in the ordinary course
since that date) subject to no Liens except Permitted Liens.

§6.4. Financial Statements. The Borrower has furnished to Agent: (a) (i) the
audited consolidated balance sheet of REIT and its Subsidiaries as of the close
of business on Balance Sheet Date and the related audited consolidated statement
of income and cash flow as of the close of business on Balance Sheet Date
certified by the chief financial officer, treasurer or other senior financial
officer of the REIT reasonably acceptable to Agent, and (ii) the unaudited
consolidated balance sheet of REIT and its Subsidiaries as of the close of
business on March 31, 2013, and the related unaudited consolidated statement of
income and cash flow as of the close of business on March 31, 2013, certified by
the chief financial officer, treasurer or other senior financial officer of the
REIT reasonably acceptable to Agent, (b) an unaudited statement of Net Operating
Income for each of the Unencumbered Borrowing Base Properties for the period
ending March 31, 2013, each reasonably satisfactory in form to the Agent and
certified by the chief financial officer, treasurer or other senior financial
officer of the REIT reasonably acceptable to Agent as fairly presenting the Net
Operating Income for such parcels for such periods, and (c) certain other
financial information relating to the Borrower, the Guarantors, and the Real
Estate (including, without limitation, the Unencumbered Borrowing Base
Properties). Such balance sheet and statements have been prepared in accordance
with generally accepted accounting principles and fairly present in all material
respects the consolidated financial condition of REIT and its Subsidiaries as of
such dates and the consolidated results of the operations of REIT and its
Subsidiaries for such periods, subject, in the case of unaudited financials, to
normal year-end audit adjustments and the absence of footnotes. There, are no
liabilities, contingent or otherwise, of REIT or any of its Subsidiaries
involving material amounts not disclosed in said financial statements and the
related notes thereto.

§6.5. No Material Changes. Since the Balance Sheet Date or the date of the most
recent financial statements delivered pursuant to §7.4, as applicable, there has
occurred no materially adverse change in the financial condition, prospects or
business (a) of the Borrower and its Subsidiaries taken as a whole as shown on
or reflected in the consolidated balance sheet of REIT and its Subsidiaries as
of the Balance Sheet Date, or their consolidated statement of income or cash
flows for the calendar year then ended, or (b) of REIT and its Subsidiaries
taken as a whole as shown on or reflected in the consolidated balance sheet of
REIT and its Subsidiaries as of the Balance Sheet Date, or their consolidated
statement of income or cash flows for the calendar year then ended, other than
changes in the ordinary course of business that have not and could not
reasonably be expected to have a Material Adverse Effect. As of the date hereof,
except as set forth on Schedule 6.5 hereto, there has occurred no materially
adverse change in the financial condition, prospects, operations or business
activities of any of the Unencumbered Borrowing Base Properties from the
condition shown on the statements of income delivered to the Agent pursuant to
§6.4 other than changes in the ordinary course of business that have not had any
materially adverse effect either individually or in the aggregate on the
business, prospects, operation or financial condition of such Unencumbered
Borrowing Base Property.

§6.6. Franchises, Patents, Copyrights„ Etc. The Borrower, the Guarantors and
their respective Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, service marks, licenses and permits, and rights in
respect of the foregoing, adequate for the

 

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conduct of their business substantially as now conducted without known conflict
with any rights of others, except where such failure has not and could not
reasonably be expected to have a Material Adverse Effect.

§6.7. Litigation. Except as stated on Schedule 6.7, there are no actions, suits,
proceedings or investigations of any kind pending or to the knowledge of the
Borrower threatened in writing against the Borrower, any Guarantor or any of
their respective Subsidiaries before any court, tribunal, arbitrator, mediator
or administrative agency or board which question the validity of this Agreement
or any of the other Loan Documents, any action taken or to be taken pursuant
hereto or thereto or any lien, security title or security interest created or
intended to be created pursuant hereto or thereto, or which if adversely
determined could reasonably be expected to cause a Default, or Event of Default
or have a Material Adverse Effect. Except as set forth on Schedule 6.7, as of
the date of this Agreement there are no judgments, final orders or awards
outstanding against or affecting the Borrower, any Guarantor or any of their
respective Subsidiaries individually or in the aggregate in excess of
$1,000,000.00 or any Unencumbered Borrowing Base Property.

§6.8. No Material Adverse Contracts, Etc. None of the Borrower, the Guarantors
or any of their respective Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a Material Adverse Effect. None of the
Borrower, the Guarantors or any of their respective Subsidiaries is in default
(taking into account all applicable cure periods, if any) of any contract or
agreement that has or could reasonably be expected to have a Material Adverse
Effect.

§6.9. Compliance with Other Instruments, Laws, Etc. None of the Borrower, the
Guarantors or any of their respective Subsidiaries is in violation of any
provision of its charter or other organizational documents, bylaws, or any
agreement or instrument to which it is subject or by which it or any of its
properties is bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that has had or could
reasonably be expected to have a Material Adverse Effect.

§6.10. Tax Status. Each of the Borrower, the Guarantors and their respective
Subsidiaries (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject or has obtained an extension for filing, (b) has paid prior to
delinquency all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) has set
aside on its books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction, and the officers or partners of such Person know
of no basis for any such claim. As of the date of this Agreement, there are no
audits pending or to the knowledge of the Borrower or the Guarantors threatened
with respect to any tax returns filed by the Borrower, Guarantors or their
respective Subsidiaries individually or in the aggregate involving tax returns
of $15,000,000.00 or greater. The taxpayer identification numbers for the
Borrower and the Guarantors as of the Closing Date are set forth on
Schedule 6.10 hereto.

 

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§6.11. No Event of Default. No Default or Event of Default has occurred and is
continuing.

§6.12. Investment Company Act. None of the Borrower, the Guarantors nor any of
their respective Subsidiaries is an “investment company”, or an “affiliated
company” or a “principal underwriter” of an “investment company”, as such terms
are defined in the Investment Company Act of 1940.

§6.13. Absence of UCC Financing Statements, Etc. Except with respect to
Permitted Liens or as disclosed on the lien search reports delivered to Agent
prior to the Closing Date, to the best of the Borrower’s knowledge and belief
there is no financing statement (but excluding any financing statements that may
be filed against the Borrower, any of the Guarantors or their respective
Subsidiaries without the consent or agreement of such Persons), security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any applicable filing records, registry, or other public office,
that purports to cover, affect or give notice of any present or possible future
lien on, or security interest or security title in, any property of the
Borrower, any of the Guarantors or their respective Subsidiaries or rights
thereunder.

§6.14. Partners and the REIT. REIT is the sole general partner of the Borrower
and as of the Closing Date owns not less than a ninety three percent
(93%) partnership interest in the Borrower, and as of the Closing Date such
partnership interest is REIT’s sole interest in the Borrower.

§6.15. Certain Transactions. Except as disclosed on Schedule 6.15 hereto and
except with respect to agreements with employees of the Borrower, any Guarantor
or any of their respective Subsidiaries which in the aggregate provide for
consideration or other benefits to such employees of less than $100,000.00 per
year, none of the partners, officers, trustees, managers, members, directors, or
employees of the Borrower, any Guarantor or any of their respective Subsidiaries
is, nor shall any such Person become, a party to any transaction with the
Borrower, any Guarantor or any of their respective Subsidiaries or Affiliates
(other than for services as partners, managers, members, employees, officers and
directors), including any agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any partner,
officer, trustee, director or such employee or, to the knowledge of the
Borrower, the Guarantors, any corporation, partnership, trust or other entity in
which any partner, officer, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, which are
on terms less favorable to the Borrower, the Guarantors or any of their
respective Subsidiaries than those that would be obtained in a comparable
arms-length transaction.

§6.16. Employee Benefit Plans. The Borrower, each Guarantor and each ERISA
Affiliate has fulfilled its obligation, if any, under the minimum funding
standards of ERISA and the Code with respect to each Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the Code
with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan. Neither the Borrower, any Guarantor nor any ERISA Affiliate has
(a) sought a waiver of the minimum funding standard under §412 of the Code in
respect of any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension
Plan, (b) failed to make any

 

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contribution or payment to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, or made any amendment to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Code, or (c) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under §4007 of ERISA. None of
the Unencumbered Borrowing Base Properties constitutes a “plan asset” within the
meaning of ERISA and the Code.

§6.17. Disclosure. All of the representations and warranties made by or on
behalf of the Borrower, the Guarantors and their respective Subsidiaries in this
Agreement and the other Loan Documents or any document or instrument delivered
to the Agent or the Lenders pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects. All information
contained in this Agreement, the other Loan Documents or otherwise furnished to
or made available to the Agent or the Lenders by or on behalf of the Borrower,
any Guarantor or any of their respective Subsidiaries is and will be true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein and in light of the circumstances under which they were made
not misleading. The written information, reports and other papers and data with
respect to the Borrower, the Guarantors, any Subsidiary or the Unencumbered
Borrowing Base Properties (other than projections and estimates) furnished to
the Agent or the Lenders in connection with this Agreement or the obtaining of
the Commitments of the Lenders hereunder was, at the time so furnished, complete
and correct in all material respects, or has been subsequently supplemented by
other written information, reports or other papers or data, to the extent
necessary to give in all material respects a true and accurate knowledge of the
subject matter in all material respects; provided that such representation shall
not apply to (a) the accuracy of any appraisal, title commitment, survey, or
engineering and environmental reports or any other documents (excluding
financial statements or reports) prepared by third parties or legal conclusions
or analysis provided by the Borrower’s and Guarantors’ counsel (although the
Borrower and Guarantors have no reason to believe that the Agent and the Lenders
may not rely on the accuracy thereof) or (b) budgets, projections and other
forward-looking speculative information prepared in good faith by the Borrower
and the Guarantors (except to the extent the related assumptions were when made
manifestly unreasonable).

§6.18. Trade Name; Place of Business. Except as provided in Schedule 6.18
hereto, neither the Borrower nor any Guarantor uses any trade name and conducts
business under any name other than its actual name set forth in the Loan
Documents. The principal place of business of the Borrower and the Guarantors is
6584 Poplar Avenue, Memphis, Tennessee 38138.

§6.19. Regulations T, U and X. No portion of any Loan is to be used for the
purpose of purchasing or carrying any “margin security” or “margin stock” as
such terms are used in Regulations T, U and X of the Board of Governors, 12
C.F.R. Parts 220, 221 and 224. Neither the Borrower nor any Guarantor is
engaged, nor will it engage, principally or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
any “margin security” or “margin stock” as such terms are used in Regulations T,
U and X of the Board of Governors, 12 C.F.R. Parts 220, 221 and 224.

 

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§6.20. Environmental Compliance.

(a) None of the Borrower, the Guarantors, their respective Subsidiaries nor to
the best knowledge and belief of the Borrower and the Guarantors any operator or
Manager of the Real Estate, nor any tenant or operations thereon, is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
(“RCRA”), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended (“CERCLA”), the Superfund Amendments and Reauthorization
Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to the environment (hereinafter
“Environmental Laws”), which violation (i) involves Real Estate (other than the
Unencumbered Borrowing Base Properties) and has had or could reasonably be
expected to have a Material Adverse Effect or (ii) involves an Unencumbered
Borrowing Base Property and has caused or could reasonably be expected to cause
a violation of §7.17(a)(ii).

(b) None of the Borrower, the Guarantors nor any of their respective
Subsidiaries has received notice from any third party including, without
limitation, any federal, state or local governmental authority, that it has been
identified as a potentially responsible party under any Environmental Law or
with respect to any hazardous waste, as defined by 42 U.S.C. §9601(5), any
hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or
contaminant as defined by 42 U.S.C. §9601(33) or any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws (“Hazardous Substances”), which it has generated, transported
or disposed of or has been found at any site, or that it is or shall be a named
party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) in connection
with the release of Hazardous Substances or violation of Environmental Laws,
which in any case (i) involves Real Estate other than the Unencumbered Borrowing
Base Properties and has had or could reasonably be expected to have a Material
Adverse Effect or (ii) involves an Unencumbered Borrowing Base Property and has
caused or could reasonably be expected to cause a violation of §7.17(a)(ii).

(c) Except as set forth in Schedule 6.20 hereto, (i) no portion of the Real
Estate has been used for the handling, processing, storage or disposal of
Hazardous Substances except in accordance with applicable Environmental Laws,
and (ii) no underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Real Estate except those
which are being operated and maintained in compliance with Environmental Laws;
(iii) no Hazardous Substances have been generated (as to predecessors in title
of REIT, the Borrower or their Subsidiaries, to the best of the Borrower’s
knowledge) or are being used on the Real Estate except in the ordinary course of
business and in accordance with applicable Environmental Laws; (iv) there has
been no past (as to predecessors in title of REIT, the Borrower or their
Subsidiaries, to the best of the Borrower’s knowledge) or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping (other than the storing of materials in
reasonable quantities to the extent necessary for the operation of real
properties, as applicable, of the type and size of those owned by the Borrower,
the Guarantors and their respective Subsidiaries in the ordinary

 

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course of their business, and in any event in compliance with all Environmental
Laws) (a “Release”) or threatened Release of Hazardous Substances on, upon, into
or from the Real Estate; and (v) any Hazardous Substances that have been
generated on any of the Real Estate have been transported off-site in accordance
with all applicable Environmental Laws, except with respect to the foregoing in
this §6.20(c) as (A) any Real Estate (other than the Unencumbered Borrowing Base
Properties) where the foregoing has not had or could not reasonably be expected
to have a Material Adverse Effect and (B) any Unencumbered Borrowing Base
Property where the foregoing has not caused and could not reasonably be expected
to cause a violation of §7.17(a)(ii).

(d) None of the Borrower or the Guarantors have received any written notice of
any claim by any party that any use, operation, or condition of the Real Estate
has caused any nuisance or any other liability or adverse condition on any other
property which (i) as to any Real Estate other than a Unencumbered Borrowing
Base Property has had or could reasonably be expected to have a Material Adverse
Effect, nor is there any knowledge of any basis for such a claim or (ii) with
respect to any Unencumbered Borrowing Base Property has caused or could
reasonably be expected to cause a violation of §7.17(a)(ii).

§6.21. Subsidiaries; Organizational Structure. Schedule 6.21(a) sets forth, as
of the date hereof, all of the Subsidiaries of REIT, the form and jurisdiction
of organization of each of the Subsidiaries, and the owners of the direct and
indirect ownership interests therein. Schedule 6.21(b) sets forth, as of the
date hereof, all of the Unconsolidated Entities of REIT and its Subsidiaries,
the form and jurisdiction of organization of each of the Unconsolidated
Entities, REIT’s or its Subsidiary’s ownership interest therein and the other
owners of the applicable Unconsolidated Entity. No Person owns any legal,
equitable or beneficial interest in any of the Persons set forth on Schedules
6.21(a) and 6.21(b) except as set forth on such Schedules. Each Subsidiary
Guarantor is a Wholly Owned Subsidiary of the Borrower.

§6.22. Material Contracts. As of the Closing Date, the Borrower and each of the
Guarantors that is a party to any Material Contract has performed and is in
compliance in all material respects with all of the terms of such Material
Contract, and no default or event of default or event or condition which with
the giving of notice, the lapse of time, or both, would constitute such a
default or event of default, exists with respect to any such Material Contract.

§6.23. Property. All of the Unencumbered Borrowing Base Properties, and all
major building systems located thereon, are structurally sound, in good
condition and working order and free from material defects, subject to ordinary
wear and tear. All of the other Real Estate of the Borrower, the Guarantors and
their respective Subsidiaries is structurally sound, in good condition and
working order, subject to ordinary wear and tear, except where such defects have
not had and could not reasonably be expected to have a Material Adverse Effect.
Each of the Unencumbered Borrowing Base Properties, and the use and operation
thereof, is in material compliance with all applicable federal and state law and
governmental regulations and any local ordinances, orders or regulations,
including without limitation, laws, regulations and ordinances relating to
zoning, building codes, subdivision, fire protection, health, safety,
handicapped access, historic preservation and protection, wetlands, tidelands,
and Environmental Laws. There are no unpaid or outstanding real estate or other
taxes or assessments on or against any of the Unencumbered Borrowing Base
Properties which are payable by the Borrower or any Guarantor

 

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(except only real estate or other taxes or assessments, that are not yet
delinquent or are being protested as permitted by this Agreement or taxes which
in the aggregate do not exceed $1,000,000.00 as to which no proceedings to
enforce the payment thereof have commenced). Each Unencumbered Borrowing Base
Property which is a phase of a larger project either has on such Unencumbered
Borrowing Base Property a leasing office, clubhouse and other amenities for such
project or has access to each of the foregoing on the adjoining phase through a
perpetual insured easement.

§6.24. Brokers. None of the Borrower, the Guarantors nor any of their respective
Subsidiaries has engaged or otherwise dealt with any broker, finder or similar
entity in connection with this Agreement or the Loans contemplated hereunder.

§6.25. Other Debt. As of the Closing Date only, none of the Borrower, the
Guarantors nor any of their respective Subsidiaries is in default of the payment
of any Indebtedness or has received written notice that it is in default of the
performance of any related agreement, mortgage, deed of trust, security
agreement, financing agreement or indenture to which any of them is a party.
None of the Borrower, the Guarantors or any of their respective Subsidiaries is
a party to or bound by any agreement, instrument or indenture that may require
the subordination in right or time or payment of any of the Obligations to any
other indebtedness or obligation of any such Person. Schedule 6.25 hereto
describes all credit facilities of the Borrower, the Guarantors or any of their
respective Subsidiaries or their respective properties and entered into by such
Person as of the date of this Agreement with respect to any Indebtedness of such
Person in an amount greater than $5,000,000.00.

§6.26. Solvency. As of the Closing Date and after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents,
including all Loans made or to be made hereunder, neither the Borrower nor any
of the Guarantors is insolvent on a balance sheet basis such that the sum of
such Person’s assets exceeds the sum of such Person’s liabilities, the Borrower
and each Guarantor is able to pay its debts as they become due, and the Borrower
and each Guarantor has sufficient capital to carry on its business.

§6.27. No Bankruptcy Filing. None of the Borrower or the Guarantors is
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of its assets or property, and
neither the Borrower nor the Guarantors have knowledge of any Person
contemplating the filing of any such petition against it.

§6.28. No Fraudulent Intent. Neither the execution and delivery of this
Agreement or any of the other Loan Documents nor the performance of any actions
required hereunder or thereunder is being undertaken by the Borrower, any
Guarantor or any of their respective Subsidiaries with or as a result of any
actual intent by any of such Persons to hinder, delay or defraud any entity to
which any of such Persons is now or will hereafter become indebted.

§6.29. Transaction in Best Interests of Borrower and Guarantors; Consideration.
The transaction evidenced by this Agreement and the other Loan Documents is in
the best interests of the Borrower and each of the Guarantors and, to the
Borrower’s and Guarantors’ belief, the creditors of such Persons. The direct and
indirect benefits to inure to the Borrower and the Guarantors pursuant to this
Agreement and the other Loan Documents constitute substantially

 

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more than “reasonably equivalent value” (as such term is used in §548 of the
Bankruptcy Code) and “valuable consideration,” “fair value,” and “fair
consideration,” (as such terms are used in any applicable state fraudulent
conveyance law), in exchange for the benefits to be provided by the Borrower and
the Guarantors pursuant to this Agreement and the other Loan Documents, and but
for the willingness of each Guarantor to be a guarantor of the Loan, the
Borrower would be unable to obtain the financing contemplated hereunder which
financing will enable the Borrower, the Guarantors and their respective
Subsidiaries to have available financing to conduct and expand their business.
The Borrower and the Guarantors further acknowledge and agree that the Borrower
and the Guarantors constitute a single integrated and common enterprise and that
each receives a benefit from the availability of credit under this Agreement.

§6.30. Contribution Agreement. Upon the execution and delivery of the
Contribution Agreement pursuant to §5.2, the Contribution Agreement shall
constitute the valid and legally binding obligations of such parties enforceable
against them in accordance with the terms and provisions thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the enforcement of creditors’
rights and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

§6.31. OFAC. None of the Borrower, the Guarantors or their respective
Subsidiaries is (or will be) a person with whom any Lender is a Designated
Person or is otherwise restricted from doing business under OFAC (including,
those Persons named on OFAC’s Specially Designated and Blocked Persons list) or
under any statute, executive order (including the September 24, 2001 Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and shall not engage in any dealings or transactions or otherwise be
associated with such persons. In addition, the Borrower hereby agrees to provide
to the Lenders any additional information that a Lender deems necessary from
time to time in order to ensure compliance with all applicable laws concerning
money laundering and similar activities.

§6.32. Unencumbered Borrowing Base Properties. Schedule 1.2 is a correct and
complete list of all Unencumbered Borrowing Base Properties as of the Closing
Date. Each of the Unencumbered Borrowing Base Properties included by the
Borrower in calculation of the compliance of the covenants set forth in §9
satisfies all of the requirements contained in this Agreement for the same to be
included therein.

 

§7. AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees that so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:

§7.1. Punctual Payment. The Borrower will duly and punctually pay or cause to be
paid the principal and interest on the Loans and all interest and fees provided
for in this Agreement, all in accordance with the terms of this Agreement and
the Notes, as well as all other sums owing pursuant to the Loan Documents.

 

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§7.2. Maintenance of Office. The Borrower and the Guarantors will maintain their
respective chief executive office at 6584 Poplar Avenue, Memphis Tennessee
38138, or at such other place in the United States of America as the Borrower or
the Guarantors shall designate upon thirty (30) days prior written notice to the
Agent and the Lenders, where notices, presentations and demands to or upon the
Borrower or the Guarantors in respect of the Loan Documents may be given or
made.

§7.3. Records and Accounts. The Borrower and the Guarantors will keep, and cause
each of their respective Subsidiaries to keep true and accurate records and
books of account with full, true and correct entries. Except as required by a
change in GAAP or any change in regulations of any regulatory authority having
jurisdiction, neither the Borrower, any Guarantor nor any of their respective
Subsidiaries shall, without the prior written consent of the Agent: (x) make any
material change to the accounting policies/principles used by such Person in
preparing the financial statements and other information described in §6.4 or
§7.4, or (y) change its fiscal year. Agent and the Lenders acknowledge that the
Borrower’s and REIT’s fiscal year is a calendar year.

§7.4. Financial Statements, Certificates and Information. The Borrower will
deliver or cause to be delivered to the Agent with sufficient copies for each of
the Lenders:

(a) within ten (10) days of the filing of REIT’s Form 10-K with the SEC, if
applicable, but in any event not later than ninety (90) days after the end of
each calendar year, the audited Consolidated balance sheet of REIT and its
Subsidiaries at the end of such year, and the related audited consolidated
statements of income, changes in capital and cash flows for such year, setting
forth in comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with GAAP,
together with a certification by the chief financial officer or treasurer of
REIT or another senior financial officer of REIT reasonably acceptable to Agent
that the information contained in such financial statements fairly presents the
financial position of REIT and its Subsidiaries, and accompanied by an auditor’s
report prepared without qualification by a nationally recognized accounting firm
approved by the Agent and who shall have authorized REIT to deliver such
financial statements and certification thereof to Agent and the Lenders, and any
other information the Lenders may reasonably request to complete a financial
analysis of the Borrower and its Subsidiaries and of REIT and its Subsidiaries;

(b) within ten (10) days of the filing of REIT’s Form 10-Q with the SEC, if
applicable, but in any event not later than forty-five (45) days after the end
of each fiscal quarter of each year, copies of the unaudited consolidated
balance sheet of REIT and its Subsidiaries, as at the end of such quarter, and
the related unaudited consolidated statements of income and cash flows for the
portion of REIT’s fiscal year then elapsed, all in reasonable detail and
prepared in accordance with GAAP, together with a certification by the chief
financial officer or treasurer of REIT or another senior financial officer of
REIT reasonably acceptable to Agent that the information contained in such
financial statements fairly presents in all material respects the financial
position of REIT and its Subsidiaries on the date thereof (subject to year-end
adjustments);

 

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(c) simultaneously with the delivery of the financial statements referred to in
subsections (a) and (b) above, a statement (a “Compliance Certificate”)
certified by the chief financial officer or treasurer of REIT or another senior
financial officer of REIT reasonably acceptable to Agent in the form of Exhibit
G hereto (or in such other form as the Agent may approve from time to time)
setting forth in reasonable detail computations evidencing compliance or
non-compliance (as the case may be) with the covenants contained in §8.3(h) -
(l) (and the last sentence of §8.3), §8.7, §8.8 and §9 and the other covenants
described in such certificate and (if applicable) setting forth reconciliations
to reflect changes in GAAP since the Balance Sheet Date. REIT shall submit with
the Compliance Certificate a Borrowing Base Certificate in the form of Exhibit H
attached hereto (a “Borrowing Base Certificate”) pursuant to which REIT shall
calculate the amount of the Borrowing Base Availability as of the end of the
immediately preceding fiscal quarter, list the Unencumbered Borrowing Base
Properties and certify that each Unencumbered Borrowing Base Property included
therein and in the calculation of the Borrowing Base Availability satisfies all
of the requirements contained in this Agreement for the same to be included
therein. All income, expense and value associated with Real Estate or other
Investments disposed of during any quarter will be eliminated from calculations,
where applicable. The Compliance Certificate shall be accompanied by copies of
the statements of Net Operating Income and Adjusted Net Operating Income for
such fiscal quarter for each of the Unencumbered Borrowing Base Properties and
Funds from Operations, prepared on a basis consistent with the statements
furnished to the Agent prior to the date hereof and otherwise in form and
substance reasonably satisfactory to the Agent, together with a certification by
the chief financial officer or treasurer of REIT or another senior financial
officer of REIT reasonably acceptable to Agent that the information contained in
such statement fairly presents in all material respects the Funds from
Operations, Net Operating income and Adjusted Net Operating Income for such
periods;

(d) simultaneously with the delivery of the financial statements referred to in
clause (a) above, the statement of all contingent liabilities involving amounts
of $1,000,000.00 or more of the Borrower, the Guarantors and their Subsidiaries,
which are not reflected in such financial statements or referred to in the notes
thereto (including, without limitation, all guaranties, endorsements and other
contingent obligations in respect of the indebtedness of others, and obligations
to reimburse the issuer in respect of any letters of credit);

(e) promptly upon the request of Agent or the Required Lenders, (i) a Rent Roll
for each of the Unencumbered Borrowing Base Properties, and a combined Rent Roll
for all of the Unencumbered Borrowing Base Properties, included in the
calculation of Unencumbered Asset Value and a summary thereof in form
satisfactory to Agent as of the end of each fiscal quarter (including the fourth
fiscal quarter in each year), (ii) an operating statement for each of the
Unencumbered Borrowing Base Properties for each such quarter and year to date, a
consolidated operating statement for the Unencumbered Borrowing Base Properties
for each such quarter and year to date, and a balance sheet for the Subsidiary
Guarantor which owns or leases any Unencumbered Borrowing Base Property as at
the end of the most recently ended fiscal quarter (such statements, balance
sheets and reports to be in form reasonably satisfactory to Agent), (iii) a
comparison of actual results to budgeted results for each such quarter and year
to date, together with the actual results for the same fiscal quarter and year
to date for the immediately preceding calendar year, and (iv) a statement of the
capital expenditures for the Unencumbered Borrowing Base Properties for each
such quarter and year to date, together with a comparison against budgeted
forecasts;

 

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(f) promptly upon the request of Agent or the Required Lenders, a statement
listing the Real Estate owned by the Borrower, the Guarantors and their
Subsidiaries (or in which the Borrower, the Guarantors or their Subsidiaries
owns an interest) and stating the location thereof, the date acquired and the
acquisition cost, (ii) listing the Indebtedness of the Borrower, the Guarantors
and their Subsidiaries (excluding Indebtedness of the type described in
§8.1(b)-(e)), which statement shall include, without limitation, a statement of
the original principal amount of such Indebtedness and the current amount
outstanding, the holder thereof (or if there is a trustee acting on behalf of
the holders, the trustee), the maturity date and any extension options, the
interest rate, the collateral provided for such Indebtedness and whether such
indebtedness is recourse or non-recourse, and (iii) listing the properties of
the Borrower, the Guarantors and their Subsidiaries which are Unimproved Land or
Development Properties, and if a Development Property providing a brief summary
of the status of such development;

(g) contemporaneously with the filing or mailing thereof, copies of all material
of a financial nature, reports or proxy statements sent to the owners of the
Borrower or REIT that is not publicly available;

(h) promptly upon the request of Agent, copies of all annual federal income tax
returns and amendments thereto of the Borrower and the Guarantors;

(i) promptly upon the request of Agent, copies of any registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and any annual, quarterly or monthly reports and other
statements of REIT which are not publicly available;

(j) promptly upon the request of Agent, evidence reasonably satisfactory to
Agent of the timely payment of all real estate taxes for the Unencumbered
Borrowing Base Properties;

(k) not later than March 1 of each year, an operating and capital budget for the
Borrower and its Subsidiaries for such calendar year;

(l) promptly upon the request of Agent, copies of any financial covenant
reporting, compliance certificate or similar reporting pursuant to the Existing
Credit Facilities and the Private Placement Notes;

(m) promptly upon becoming aware thereof, notice of a change in the Credit
Rating given by a Rating Agency or any announcement that any rating is “under
review” or that such rating has been placed on a watch list or that any similar
action has been taken by a Rating Agency; and

(n) from time to time such other financial data and information in the
possession of the Borrower, the Guarantors or their respective Subsidiaries
(including without limitation auditors’ management letters, status of litigation
or investigations against the

 

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Borrower or the Guarantors and any settlement discussions relating thereto,
property inspection and environmental reports and information as to zoning and
other legal and regulatory changes affecting the Borrower and the Guarantors) as
the Agent or any Lender may reasonably request.

Any material to be delivered pursuant to this §7.4 may be delivered
electronically directly to Agent and the Lenders provided that such material is
in a format reasonably acceptable to Agent, and such material shall be deemed to
have been delivered to Agent and the Lenders upon Agent’s receipt thereof. Upon
the request of Agent, the Borrower and the Guarantors shall deliver paper copies
thereof to Agent and the Lenders. The Borrower and the Guarantors authorize
Agent and Arranger to disseminate any such materials through the use of
Intralinks, SyndTrak or any other electronic information dissemination system,
and the Borrower and the Guarantors release Agent and the Lenders from any
liability in connection therewith. In the event that Agent receives paper copies
of any material delivered pursuant to this §7.4 which is not made available by
Intralinks, Syndtrak or any other electronic information dissemination system
(or by posting to Borrower’s website), Agent shall promptly deliver copies of
such material to each Lender.

§7.5. Notices.

(a) Defaults. The Borrower will within two (2) Business Days of becoming aware
of same notify the Agent in writing of the occurrence of any Default or Event of
Default, which notice shall describe such occurrence with reasonable specificity
and shall state that such notice is a “notice of default”. If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or under
any note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower, any Guarantor or any of their respective
Subsidiaries is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence of
indebtedness to accelerate the maturity thereof or cause the redemption,
prepayment or purchase thereof, which acceleration, redemption, prepayment or
purchase would either cause a Default or have a Material Adverse Effect, the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Lenders, describing the notice or action and the nature of the claimed
default.

(b) Environmental Events. The Borrower will give notice to the Agent within five
(5) Business Days of becoming aware of (i) any potential or known Release or
threat of Release of any Hazardous Substances in violation of any applicable
Environmental Law at any Real Estate; (ii) any violation of any Environmental
Law that the Borrower, any Guarantor or any of their respective Subsidiaries
reports in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal, state or
local environmental agency or (iii) any written inquiry, proceeding,
investigation, or other action, including a notice from any agency of potential
environmental liability, of any federal, state or local environmental agency or
board, that in any case involves (A) any Unencumbered Borrowing Base Property,
or (B) any other Real Estate and could reasonably be expected to have a Material
Adverse Effect.

 

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(c) Notice of Material Adverse Events. The Borrower will give notice to the
Agent within five (5) Business Days of becoming aware of any matter that has
resulted or could reasonably be expected to result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, any provision
of any security issued by REIT, Borrower or any of their respective Subsidiaries
or of any agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound; (ii) any dispute,
litigation, investigation, proceeding or suspension between REIT, Borrower or
any of their respective Subsidiaries and any Governmental Authority; or
(iii) the commencement of, or any material development in, any litigation or
proceeding affecting REIT, Borrower or any of their respective Subsidiaries,
including pursuant to any applicable Environmental Laws.

(d) Notice of Litigation and Judgments. The Borrower will give notice to the
Agent in writing within five (5) Business Days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower, any Guarantor or any of their respective
Subsidiaries or to which the Borrower, any Guarantor or any of their respective
Subsidiaries is or is to become a party that could either cause a Default or
could reasonably be expected to have a Material Adverse Effect and stating the
nature and status of such litigation or proceedings. The Borrower will give
notice to the Agent, in writing, in form and detail reasonably satisfactory to
the Agent and each of the Lender’s, within ten (10) days of any judgment not
covered by insurance, whether final or otherwise, against the Borrower, any
Guarantor or any of their respective Subsidiaries in an amount in excess of
$5,000,000.00.

(e) ERISA. The Borrower will give notice to the Agent within ten (10) Business
Days after the Borrower, any Guarantor or any ERISA Affiliate (i) gives or is
required to give notice to the PBGC of any ERISA Reportable Event with respect
to any Guaranteed Pension Plan, Multiemployer Plan or Employee Benefit Plan, or
knows that the plan administrator of any such plan has given or is required to
give notice of any such ERISA Reportable Event; (ii) gives a copy of any notice
of complete or partial withdrawal liability under Title IV of ERISA; or
(iii) receives any notice from the PBGC under Title IV or ERISA of an intent to
terminate or appoint a trustee to administer any such plan.

(f) Notification of Lenders. Within five (5) Business Days after receiving any
notice under this §7.5, the Agent will forward a copy thereof to each of the
Lenders, together with copies of any certificates or other written information
that accompanied such notice.

§7.6. Existence; Maintenance of Properties; NYSE Listing.

(a) The Borrower and the Guarantors will, and will cause each of their
respective Subsidiaries to, preserve and keep in full force and effect their
legal existence in the jurisdiction of its incorporation or formation. The
Borrower and the Guarantors will preserve and keep in full force all of their
rights and franchises and those of their Subsidiaries, the preservation of which
is necessary to the conduct of their business. REIT will maintain its status,
and election to be treated, as a real estate investment trust. REIT shall
continue to own, directly or indirectly, not less than eighty-five percent
(85%) of the economic, voting and beneficial interest in the Borrower and shall
be the sole general partner of the Borrower and the

 

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Borrower (or as provided in clause (e) of the definition of Change of Control,
Borrower and REIT) shall continue to own, directly or indirectly, one hundred
percent (100%) of the economic, voting and beneficial interest in each
Subsidiary Guarantor.

(b) The Borrower and each Guarantor (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment, and (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof in all cases in
which the failure so to do would have a material adverse effect on the condition
of any Unencumbered Borrowing Base Property or would cause a Material Adverse
Effect.

(c) REIT shall, at all times (i) cause its common shares to be duly listed and
traded on the New York Stock Exchange and (ii) file all reports required to be
filed by it in connection therewith in a timely manner, after giving effect to
any extensions allowed by the New York Stock Exchange or the Securities and
Exchange Commission.

§7.7. Insurance. The Borrower will, at its expense, procure and maintain
insurance covering the Borrower and its Subsidiaries and the Real Estate in such
amounts and against such risks and casualties as is customarily maintained by
similar businesses.

§7.8. Taxes; Liens. The Borrower and the Guarantors will, and will cause their
respective Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become delinquent, all taxes, assessments and
other governmental charges imposed upon them or upon the Unencumbered Borrowing
Base Properties or the other Real Estate, sales and activities, or any part
thereof, or upon the income or profits therefrom as well as all claims for
labor, materials or supplies that if unpaid might by law become a lien or charge
upon any of its property, except as to Real Estate which is not an Unencumbered
Borrowing Base Property to the extent that the failure to do so has not had and
could not reasonably be expected to result in a Material Adverse Effect,
provided that any such tax, assessment, charge or levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings which shall suspend the collection thereof with respect
to such property, neither such property nor any portion thereof or interest
therein would be in any danger of sale, forfeiture or loss by reason of such
proceeding and the Borrower, such Guarantor or any such Subsidiary shall have
set aside on its books adequate reserves in accordance with GAAP; and provided,
further, that forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor, the Borrower, such Guarantor
or any such Subsidiary either (i) will provide a bond issued by a surety
reasonably acceptable to the Agent and sufficient to stay all such proceedings
or (ii) if no such bond is provided, will pay each such tax, assessment, charge
or levy.

§7.9. Inspection of Properties and Books. The Borrower and the Guarantors will,
and will cause their respective Subsidiaries to, permit the Agent and the
Lenders, at the Borrower’s expense and upon reasonable prior notice, to visit
and inspect any of the properties of the Borrower, the Guarantors’ or any of
their respective Subsidiaries (subject to the rights of tenants under their
Leases), to examine the books of account of the Borrower, the Guarantors and
their respective Subsidiaries (and to make copies thereof and extracts
therefrom) and to discuss the

 

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affairs, finances and accounts of the Borrower, the Guarantors and their
respective Subsidiaries with, and to be advised as to the same by, their
respective officers, partners or members, all at such reasonable times and
intervals as the Agent or any Lender may reasonably request, provided that so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower shall not be required to pay for such visits and inspections. The
Lenders shall use good faith efforts to coordinate such visits and inspections
so as to minimize the interference with and disruption to the normal business
operations of the Borrower, the Guarantors and their respective Subsidiaries.

§7.10. Compliance with Laws, Contracts, Licenses and Permits. The Borrower and
the Guarantors will, and will cause each of their respective Subsidiaries to,
comply in all respects with (i) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its corporate charter, partnership
agreement, limited liability company agreement or declaration of trust, as the
case may be, and other charter documents and bylaws, (iii) all agreements and
instruments to which it is a party or by which it or any of its properties may
be bound, (iv) all applicable decrees, orders, and judgments, and (v) all
licenses and permits required by applicable laws and regulations for the conduct
of its business or the ownership, use or operation of its properties, except
where a failure to so comply with any of clauses (i) through (v) could not
reasonably be expected to have a Material Adverse Effect. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Borrower,
the Guarantors or their respective Subsidiaries may fulfill any of its
obligations hereunder, the Borrower, the Guarantors or such Subsidiary will
immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Lenders with evidence thereof

§7.11. Further Assurances. The Borrower and the Guarantors will, and will cause
each of their respective Subsidiaries to, cooperate with the Agent and the
Lenders and execute such further instruments and documents as the Lenders or the
Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.

§7.12. Limiting Agreements.

(a) Neither Borrower, the Guarantors nor any of their respective Subsidiaries
shall enter into, any agreement, instrument or transaction which has or may have
the effect of prohibiting or limiting Borrower’s, the Guarantors’ or any of
their respective Subsidiaries’ ability to pledge to Agent any Unencumbered
Borrowing Base Properties as security for the Obligations. Borrower shall take,
and shall cause the Guarantors and their respective Subsidiaries to take, such
actions as are necessary to preserve the right and ability of the Borrower, the
Guarantors and their respective Subsidiaries to pledge such assets as security
for the Obligations without any such pledge after the date hereof causing or
permitting the acceleration (after the giving of notice or the passage of time,
or otherwise) of any other Indebtedness of the Borrower, the Guarantors or any
of their respective Subsidiaries, provided, that the foregoing shall not
prohibit Borrower’s, Guarantors’ or any of their respective Subsidiaries’ use of
Unencumbered Borrowing Base Properties as a borrowing base for other Unsecured
Indebtedness.

 

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(b) Borrower shall, upon demand, provide to the Agent such evidence as the Agent
may reasonably require to evidence compliance with this §7.12, which evidence
shall include, without limitation, copies of any agreements or instruments which
would in any way restrict or limit the Borrower’s, any Guarantor’s or any
Subsidiary’s ability to pledge Unencumbered Borrowing Base Properties as
security for Indebtedness, or which provide for the occurrence of a default
(after the giving of notice or the passage of time, or otherwise) if
Unencumbered Borrowing Base Properties are pledged in the future as security for
Indebtedness of the Borrower or any Guarantor.

§7.13. Ownership of Real Estate. Without the prior written consent of the
Required Lenders, all Real Estate and all interests (whether direct or indirect)
of the Borrower or REIT in any real estate acquired or leased after the date
hereof shall be owned or leased directly by the REIT, Borrower or a Wholly Owned
Subsidiary of the Borrower of REIT; provided, however that the Borrower and REIT
shall be permitted to own or lease interests in Real Estate through non-Wholly
Owned Subsidiaries and Unconsolidated Entities as permitted by §8.3 and may
dispose of such interests as permitted by §8.8.

§7.14. Business Operations. The Borrower, the Guarantors and their respective
Subsidiaries shall operate their respective businesses in substantially the same
manner and in substantially the same fields and lines of business as such
business is now conducted and in compliance with the terms and conditions of
this Agreement and the Loan Documents and as contemplated by the Merger
Transaction. The Borrower and the Guarantors will not, and will not permit any
Subsidiary to, directly or indirectly, engage in any line of business other than
the ownership, operation, management and development of multifamily properties,
properties acquired in connection with the Merger Transaction or businesses
incidental thereto (including ancillary attached retail).

§7.15. Distributions of Income to Borrower. The Borrower shall cause all of its
Subsidiaries that are not Subsidiary Guarantors (subject to the terms of any
loan documents under which such Subsidiary is the borrower) to promptly
distribute to the Borrower (but not less frequently than once each fiscal
quarter, unless otherwise approved by the Agent), whether in the form of
dividends, distributions or otherwise, all profits, proceeds or other income
relating to or arising from its Subsidiaries’ use, operation, financing,
refinancing, sale or other disposition of their respective assets and properties
after (a) the payment by each Subsidiary of its debt service, operating
expenses, capital improvements and leasing commissions for such quarter and
(b) the establishment of reasonable reserves for the payment of operating
expenses not paid on at least a quarterly basis and capital improvements to be
made to such Subsidiary’s assets and properties approved by such Subsidiary in
the course of its business consistent with its past practices. Neither the
Borrower, the Guarantors or any of their Subsidiaries shall enter into any
agreement that limits the ability of any Subsidiary to make a Dividend or
distribution payment to the Borrower or any Guarantor or to otherwise transfer
any property to the Borrower or any Guarantor, provided, however, that this
sentence shall not prohibit any negative pledge incurred or provided in favor of
any holder of Indebtedness permitted under §8.1(f) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness.

 

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§7.16. Plan Assets. The Borrower will do, or cause to be done, all things
necessary to ensure that none of the Unencumbered Borrowing Base Properties will
be deemed to be Plan Assets at any time.

§7.17. Unencumbered Borrowing Base Properties,

(a) Subject to clause (b) of this §7.17, the Eligible Real Estate included in
the calculation of the Borrowing Base Availability and inclusion as Unencumbered
Borrowing Base Properties shall at all times satisfy all of the following
conditions:

(i) the Eligible Real Estate shall be owned one hundred percent (100%) in fee
simple or leased under a Ground Lease by the Borrower, REIT or a Subsidiary
Guarantor, free and clear of all Liens other than the Liens permitted in
§8.2(i)A and (iii), and, such Eligible Real Estate shall not have applicable to
it any restriction on the sale, pledge, transfer, mortgage or assignment of such
property (including any restrictions contained in any applicable organizational
documents, other than, solely with respect to Park Estate and Reserve at Dexter
Lake (each as described on Schedule 1.2), the restrictions on sale set forth in
Section 6.11 of the Borrower’s Second Amended and Rested Limited Partnership
Agreement);

(ii) none of the Eligible Real Estate shall have any material title, survey,
environmental, structural or other defects that would give rise to a materially
adverse effect as to the value, use of, operation of or ability to sell or
finance such property;

(iii) if such Real Estate is owned by a Subsidiary Guarantor, the only asset of
such Subsidiary shall be the Eligible Real Estate included in the calculation of
the Borrowing Base Availability and inclusion as Unencumbered Borrowing Base
Properties and related fixtures and personal property;

(iv) such Real Estate is managed by Manager;

(v) no Person other than the Borrower (or as provided in clause (e) of the
definition of Change of Control, Borrower and REIT) has any direct or indirect
ownership of any legal, equitable or beneficial interest in such Subsidiary
Guarantor if such Unencumbered Borrowing Base Property is owned or leased under
a Ground Lease by a Subsidiary Guarantor, and no direct or indirect ownership or
other interests or rights in any such Subsidiary Guarantor shall be subject to
any Lien;

(vi) the Unencumbered Borrowing Base Properties included in the calculation of
Borrowing Base Availability shall at all times have an aggregate Unencumbered
Asset Value of not less than $250,000,000.00;

(vii) there shall be at all times at least ten (10) Unencumbered Borrowing Base
Properties included in the calculation of the Borrowing Base Availability;

(viii) all Unencumbered Borrowing Base Properties will at all times have an
aggregate Occupancy Rate of no less than eighty percent (80%);

 

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(ix) the Borrower shall have delivered to the Agent (A) a written request to
include such Eligible Real Estate in the calculation of the Borrowing Base
Availability, (B) a physical description of such Eligible Real Estate, (C) a
current Rent Roll and current operating statements for such Eligible Real
Estate, (D) an operating and capital expenditure budget for such Eligible Real
Estate in form and substance reasonably satisfactory to the Agent, (E) a
certification as to the matters covered under §7.17(a)(i)-(v), and (F) such
other information as the Agent may reasonably require with respect to such
Eligible Real Estate, including, but not limited to, any information required by
the Agent to determine the Unencumbered Asset Value attributable to such
Eligible Real Estate and compliance with this §7.17 (collectively, the “Eligible
Real Estate Qualification Documents”); and

(x) such Eligible Real Estate has not been removed from the calculation of the
Borrowing Base Availability pursuant to §7.17(c), §7.17(d) or §7.17(e).

(b) Notwithstanding the foregoing, in the event any Real Estate does not qualify
as Eligible Real Estate or satisfy the requirements of §7.17(a), such Real
Estate shall be included in the calculation of the Borrowing Base Availability
so long as the Agent shall have received the prior written consent of each of
the Required Lenders to the inclusion of such Real Estate in the calculation of
the Borrowing Base Availability.

(c) In the event that all or any material portion of any Eligible Real Estate
included in the calculation of the Borrowing Base Availability shall be
materially damaged or taken by condemnation, then such property shall no longer
be included in the calculation of the Borrowing Base Availability unless and
until (i) any damage to such real estate is repaired or restored, such real
estate becomes fully operational and the Agent shall receive evidence
satisfactory to the Agent of the value of such real estate following such repair
or restoration (both at such time and prospectively) or (ii) Agent shall receive
evidence satisfactory to the Agent that the value of such real estate (both at
such time and prospectively) shall not be materially adversely affected by such
damage or condemnation.

(d) Upon any asset ceasing to qualify to be included in the calculation of the
Borrowing Base Availability, such asset shall no longer be included in the
calculation of the Borrowing Base Availability. Within five (5) Business Days
after any such disqualification, the Borrower shall deliver to the Agent a
certificate reflecting such disqualification, together with the identity of the
disqualified asset, a statement as to whether any Default or Event of Default
arises as a result of such disqualification, and a calculation of the Borrowing
Base Availability attributable to such asset. Simultaneously with the delivery
of the items required pursuant above, the Borrower shall deliver to the Agent a
pro forma Compliance Certificate and Borrowing Base Certificate demonstrating,
after giving effect to such removal or disqualification, compliance with the
covenants contained in §§9.1, 9.2 and 9.3.

(e) In addition, the Borrower may voluntarily remove any Real Estate from the
calculation of the Borrowing Base Availability in its sole discretion, or upon
either of the events described in clause (b) or (c) of §5.3 occurring, by
delivering to the Agent, no later than five (5) Business Days prior to date on
which such removal is to be effected, notice of such removal, together with a
statement that no Default or Event of Default then exists or would, upon the
occurrence of such event or with passage of time, result from such removal, the

 

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identity of the Unencumbered Borrowing Base Property being removed, and a
calculation of the value attributable to such Unencumbered Borrowing Base
Property. Simultaneously with the delivery of the items required pursuant above,
the Borrower shall deliver to the Agent a pro forma Compliance Certificate and
Borrowing Base Certificate demonstrating, after giving effect to such removal or
disqualification, compliance with the covenants contained in §7.17, §8.8 and
§§9.1, 9.2 and 9.3.

(f) The Agent shall promptly notify the Lenders of the addition or removal of
any Real Estate from the calculation of the Borrowing Base Availability.

 

§8. NEGATIVE COVENANTS.

The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any of the Lenders has any obligation to make any Loans:

§8.1. Restrictions on Indebtedness. The Borrower and the Guarantors will not,
and will not permit their respective Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:

(a) Indebtedness to the Lenders arising under any of the Loan Documents;

(b) current liabilities of the Borrower, the Guarantors or their respective
Subsidiaries incurred in the ordinary course of business but not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily, extended and in fact extended in
connection with normal purchases of goods and services;

(c) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of §7.8;

(d) Indebtedness in respect of judgments only to the extent, for the period and
for an amount not resulting in a Default;

(e) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;

(f) subject to the provisions of §9, Non-Recourse Indebtedness of the REIT,
Borrower and their respective Subsidiaries (other than the Subsidiary Guarantors
or any other Subsidiary of the Borrower owning an interest in a Subsidiary
Guarantor); provided that REIT or the Borrower may provide a guaranty or
indemnity with respect to Non-Recourse Exclusions in connection with such
Non-Recourse Indebtedness; and

(g) subject to the provisions of §9, Indebtedness (other than Non-Recourse
Indebtedness) of the REIT, Borrower and their respective Subsidiaries.

Notwithstanding anything in this Agreement to the contrary, (i) none of the
Subsidiary Guarantors shall create, incur, assume, guarantee or be or remain
liable contingently or

 

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otherwise, with respect to any Indebtedness described in §8.1(f) or any
Indebtedness described in §8.1(g) that is Secured Indebtedness, (ii) a
Subsidiary Guarantor shall only provide a guaranty of other Unsecured
Indebtedness of the Borrower permitted pursuant to §8.1(g), and (iii) none of
the Indebtedness described in §8.1(f) or §8.1(g) that is Secured Indebtedness
shall have any of the Unencumbered Borrowing Base Properties or any interest
therein or equipment related thereto or any direct or indirect ownership
interest in any Subsidiary Guarantor as collateral, a borrowing base, asset pool
or any similar form of credit support for such Indebtedness (provided that the
foregoing shall not preclude REIT or the Borrower from incurring liability with
respect to Non-Recourse Exclusions in connection with the Indebtedness described
in §8.1(f)).

§8.2. Restrictions on Liens, Etc. The Borrower and the Guarantors will not, and
will not permit their respective Subsidiaries to (a) create or incur or suffer
to be created or incurred or to exist any lien, security title, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of their respective property or assets of any character whether now
owned or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of their property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or
performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against any of them that if unpaid could by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
any of their general creditors; (e) sell, assign, pledge or otherwise transfer
any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; or (f) incur or maintain any obligation
to any holder of Indebtedness of any of such Persons which prohibits the
creation or maintenance of any lien securing the Obligations, including, without
limitation, any Lien on the Unencumbered Borrowing Base Properties
(collectively, “Liens”); provided that notwithstanding anything to the contrary
contained herein, the Borrower, the Guarantors and any such Subsidiary may
create or incur or suffer to be created or incurred or to exist:

(i) (A) Liens on properties to secure taxes, assessments and other governmental
charges (excluding any Lien imposed pursuant to any of the provisions of ERISA
or pursuant to any Environmental Laws) or claims for labor, material or supplies
incurred in the ordinary course of business in respect of obligations not then
delinquent or not otherwise required to be paid or discharged under the terms of
this Agreement or any of the other Loan Documents and (B) Liens on assets, other
than (I) the Unencumbered Borrowing Base Properties and (II) any direct or
indirect interest of the Borrower or any Subsidiary of the Borrower in any
Subsidiary Guarantor, in respect of judgments permitted by §8.1(d);

(ii) deposits or pledges made in connection with, or to secure payment of,
workers’ compensation, unemployment insurance, old age pensions or other social
security obligations;

(iii) encumbrances on properties consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord’s or lessor’s liens under leases
to which the Borrower or any such Subsidiary is a party, and other non-monetary
liens or encumbrances, which do not individually or in the aggregate have a
Material Adverse Effect; and

 

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(iv) liens on properties or interests therein permitted by §8.1(f) or (g) (but
excluding (A) Unencumbered Borrowing Base Properties or any interest therein, or
(B) any direct or indirect interest of the Borrower or any Subsidiary of the
Borrower in any Subsidiary Guarantor) to secure Indebtedness permitted by
§8.1(f) or (g).

Notwithstanding anything in this Agreement to the contrary, (A) no Subsidiary
Guarantor shall create or incur or suffer to be created or incurred or to exist
any Lien other than Liens contemplated in §§8.2(i)(A) and (iii); and (B) no Lien
may be granted, suffered or incurred on any property, assets or revenues in
favor of the lenders or holders under the Private Placement Notes or any other
Existing Credit Facilities, without effectively providing that all Obligations
shall be secured equally and ratably with such indebtedness pursuant to
agreements in form and substance reasonably satisfactory to the Agent.

§8.3. Restrictions on Investments. Neither the Borrower nor the Guarantors will,
nor will they permit any of their respective Subsidiaries to, make or permit to
exist or to remain outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (l) year from the date of purchase by the Borrower, such
Guarantor or such Subsidiary;

(b) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in. excess of $100,000,000;
provided, however, that the aggregate amount at any time so invested with any
single bank having total assets of less than $1,000,000,000 will not exceed
$200,000;

(c) repurchase agreements having a term not greater than. ninety (90) days and
fully secured by securities described in the foregoing subsection (a), (b) or
(e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000;

(d) shares of so-called “money market funds” registered with the SEC under the
Investment Company Act of 1940 which maintain a level per-share value, invest
principally in investments described in the foregoing subsections (a) through
(d) and have total assets in excess of $50,000,000;

(e) Investments by the Borrower in its Wholly-Owned Subsidiaries;

(f) Investments by REIT in the Borrower, in its Wholly Owned Subsidiaries and
other Subsidiaries (provided that any interest in such Subsidiaries not owned by
REIT shall be owned directly or indirectly by Borrower);

(g) the acquisition of fee interests or long-term ground lease interests by the
REIT, Borrower or their respective Subsidiaries in (i) Real Estate which are
Stabilized Properties utilized for income-producing multifamily Real Estate and
(ii) acquisitions of

 

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multifamily properties or condominium projects to be converted to multifamily
properties which have certificates of occupancy but are not yet Stabilized
Properties but which are expected to become Stabilized Properties within
twenty-four (24) months following acquisition, in each case located in the
continental United States and businesses and investments incidental thereto
(including ancillary attached retail);

(h) Investments by the REIT, Borrower or their respective Subsidiaries in
Unimproved Land; provided that the aggregate Investments therein shall not at
any time exceed five percent (5%) of Consolidated Total Asset Value at any time;

(i) Investments by the REIT, Borrower or their respective Subsidiaries in
Development Properties which are being developed as an income-producing
multifamily properties; provided that the aggregate Investments therein shall
not at any time exceed ten percent (10%) of Consolidated Total Asset Value;

(j) Investments by the REIT, Borrower or their respective Subsidiaries in
non-Wholly Owned Subsidiaries and Unconsolidated Entities; provided that the
aggregate Investments therein shall not at any time exceed fifteen percent
(15%) of Consolidated Total Asset Value;

(k) Investments by the REIT, Borrower or their respective Subsidiaries in
Mortgage Notes; provided that the aggregate Investment therein shall not at any
time exceed five percent (5%) of Consolidated Total Asset Value;

(l) Investments by the REIT, Borrower or their respective Subsidiaries in Stock
Investments; provided that the aggregate Investments therein shall not at any
time exceed five percent (5%) of Total Asset Value; and

(m) the acquisition by the REIT, Borrower or their respective Subsidiaries of
fee interests in certain non-multifamily Real Estate, solely as a result of the
Merger Transaction.

Notwithstanding the foregoing, in no event shall the aggregate investments
permitted under clauses (h), (i), (j), (k) and (l) of this §8.3 exceed
twenty-five percent (25%) of Consolidated Total Asset Value at any time.
Notwithstanding the foregoing, in no event shall the aggregate Investments by
REIT and its Subsidiaries (other than through Borrower and its Subsidiaries)
permitted under this §8.3 exceed twenty percent (20%) of Consolidated Total
Asset Value at any time.

§8.4. Merger; Consolidation. The Borrower and the Guarantors will not, and will
not permit any of their respective Subsidiaries to, effect any dissolution,
liquidation, disposition of all or substantially all of its assets or business,
merger, reorganization, consolidation or other business combination or effect
any asset acquisition, stock acquisition or other acquisition individually or in
a series of transactions which may have a similar effect as any of the
foregoing, in each case without the prior written consent of the Required
Lenders except for (i) the merger or consolidation of one or more of the
Subsidiaries of the Borrower with and into the Borrower (it being understood and
agreed that in any such event the Borrower will be the surviving Person),
(ii) the merger or consolidation of two or more Subsidiaries of the Borrower;
provided that no such merger or consolidation shall involve any Subsidiary that
is a Guarantor

 

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(unless the Guarantor is the surviving entity), (iii) asset sales consummated in
accordance with §5.3 or §8.8, (iv) the merger or consolidation of a Subsidiary
of the REIT (other than the Borrower) with and into the REIT, (v) the Merger
Transaction, if consummated in all material respects as described on Schedule
1.4, and (vi) any Person may merge into the Borrower or a Guarantor, so long as:
(w) the Borrower or such Guarantor is the surviving entity, (x) no Change of
Control results therefrom, (y) no Default or Event of Default then exists or
would result therefrom, and (z) the Borrower and the Guarantors shall be in pro
forma compliance with the financial covenants under §9 immediately after giving
effect to such merger, and the Borrower shall have delivered an officer’s
certificate to the Agent by which it certifies to the satisfaction of such
conditions.

§8.5. Sale and Leaseback. The Borrower and the Guarantors will not, and will not
permit their respective Subsidiaries, to enter into any arrangement, directly or
indirectly, whereby the Borrower, any Guarantor or any such Subsidiary shall
sell or transfer any Real Estate owned by it in order that then or thereafter
the Borrower or any such Subsidiary shall lease back such Real Estate without
the prior written consent of the Agent, such consent not to be unreasonably
withheld.

§8.6. Compliance with Environmental Laws. None of the Borrower or the Guarantors
will, nor will any of them permit any of its respective Subsidiaries or any
other Person to, do any of the following and will use commercially reasonably
reasonable efforts so as not to permit any other Person to: (a) use any of the
Real Estate or any portion thereof as a facility for the handling, processing,
storage or disposal of Hazardous Substances, except for quantities of Hazardous
Substances used in the ordinary course of business and in material compliance
with all applicable Environmental Laws, (b) cause or permit to be located on any
of the Real Estate any underground tank or other underground storage receptacle
for Hazardous Substances except in full compliance with Environmental Laws,
(c) generate any Hazardous Substances on any of the Real Estate except in full
compliance with Environmental Laws, (d) conduct any activity at any Real Estate
or use any Real Estate in any manner that could reasonably be contemplated to
cause a Release of Hazardous Substances on, upon or into the Real Estate or any
surrounding properties or any threatened Release of Hazardous Substances which
might give rise to liability under CERCLA or any other Environmental Law, or
(e) directly or indirectly transport or arrange for the transport of any
Hazardous Substances (except in compliance with all Environmental Laws), except,
in each case, (i) with respect to any Real Estate other than an Unencumbered
Borrowing Base Property where any such use, generation, conduct or other
activity has not had and could not reasonably be expected to have a Material
Adverse Effect, and (ii) with respect to any Unencumbered Borrowing Base
Property where any such use, generation, conduct or other activity has not
caused and could not reasonably be expected to cause a violation of
§7.17(a)(ii); and Borrower shall diligently and continuously pursue corrective,
remedial and other actions to bring such Unencumbered Borrowing Base Property or
Properties into compliance with Environmental Laws and to eliminate such
liability.

The Borrower shall:

(i) in the event of any material change in Environmental Laws governing the
assessment, release or removal of Hazardous Substances, take all reasonable
action (including, without limitation, the conducting of engineering tests at
the sole expense of

 

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the Borrower) to confirm that no Hazardous Substances are or ever were Released
or disposed of on the Unencumbered Borrowing Base Properties in violation of
applicable Environmental Laws; and

(ii) if any Release or disposal of Hazardous Substances which any Person may be
legally obligated to contain, correct or otherwise remediate or which may
otherwise expose it to liability shall occur or shall have occurred on any
Unencumbered Borrowing Base Property (including without limitation any such
Release or disposal occurring prior to the acquisition or leasing of such
Unencumbered Borrowing Base Property by the Borrower), the Borrower shall, after
obtaining knowledge thereof, cause the prompt containment and removal of such
Hazardous Substances and remediation of the Unencumbered Borrowing Base Property
in full compliance with all applicable Environmental Laws; provided, that the
Borrower shall be deemed to be in compliance with Environmental Laws for the
purpose of this clause (ii) so long as it or a responsible third party with
sufficient financial resources is taking reasonable action to remediate or
manage any event of noncompliance to the satisfaction of the Agent and no action
shall have been commenced by any enforcement agency. The Agent may engage its
own environmental consultant to review the environmental assessments and the
compliance with the covenants contained herein.

At any time after an Event of Default shall have occurred hereunder the Agent
may at its election (and will at the request of the Required Lenders) obtain
such environmental assessments of any or all of the Unencumbered Borrowing Base
Properties prepared by an environmental consultant as may be necessary or
advisable for the purpose of evaluating or confirming (i) whether any Hazardous
Substances are present in the soil or water at or adjacent to any such
Unencumbered Borrowing Base Property and (ii) whether the use and operation of
any such Unencumbered Borrowing Base Property complies with all Environmental
Laws to the extent required by the Loan Documents. Additionally, at any time
that the Agent or the Required Lenders shall have reasonable grounds to believe
that a Release or threatened Release of Hazardous Substances which any Person
may be legally obligated to contain, correct or otherwise remediate or which
otherwise may expose such Person to liability may have occurred, relating to any
Unencumbered Borrowing Base Property, or that any of the Unencumbered Borrowing
Base Property is not in compliance with Environmental Laws to the extent
required by the Loan Documents, the Borrower shall promptly upon the request of
Agent obtain and deliver to Agent such environmental assessments of such
Unencumbered Borrowing Base Property prepared by an environmental consultant
reasonably acceptable to Agent as may be necessary or advisable for the purpose
of evaluating or confirming (i) whether any Hazardous Substances are present in
the soil or water at or adjacent to such Unencumbered Borrowing Base Property
and (ii) whether the use and operation of such Unencumbered. Borrowing Base
Property comply with all Environmental Laws to the extent required by the Loan
Documents. Environmental assessments may include detailed visual inspections of
such Unencumbered Borrowing Base Property including, without limitation, any and
all storage areas, storage tanks, drains, dry wells and leaching areas, and the
taking of soil samples, as well as such other investigations or analyses as are
reasonably necessary or appropriate for a complete determination of the
compliance of such Unencumbered Borrowing Base Property and the use and
operation thereof with all applicable Environmental Laws. All environmental
assessments contemplated by this §8.6 shall be at the sole cost and expense of
the Borrower.

 

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§8.7. Distributions.

(a) The Borrower shall not pay any Distribution to the partners, members or
other owners of the Borrower, and REIT shall not pay any Distribution to its
partners, members or other owners of REIT, if such Distribution by the Borrower
or REIT to the extent that the amount of such Distributions paid in any fiscal
quarter, when added to the amount of all other Distributions paid in the same
fiscal quarter and the preceding three (3) fiscal quarters, exceeds ninety-five
percent (95%) of such Person’s Funds from Operations for such period; provided
that the limitations contained in this §8.7(a) shall not preclude the Borrower
from making Distributions in an amount equal to the minimum distributions
required under the Code to maintain the REIT Status of REIT, as evidenced by a
certification of the chief financial officer or treasurer of REIT or another
senior financial officer of the REIT reasonably acceptable to the Agent
containing calculations in detail reasonably satisfactory in form and substance
to the Agent.

(b) In the event that an Event of Default shall have occurred and be continuing,
(i) the Borrower and REIT shall not pay any Distribution to their respective
partners, members or other owners, other than Distributions by the Borrower to
REIT and by REIT in an amount equal to the minimum distributions required under
the Code to maintain REIT Status of REIT, as evidenced by a certification of the
chief financial officer or treasurer of REIT or another senior financial officer
of the REIT reasonably acceptable to Agent containing calculations in detail
reasonably satisfactory in form and substance to the Agent.

(c) Notwithstanding the foregoing, at any time when an Event of Default under
§12.1(a), (b), (g), (h) or (i) shall have occurred or the maturity of the
Obligations has been accelerated, neither the Borrower nor REIT shall make any
Distributions whatsoever, directly or indirectly.

§8.8. Asset Sales. The Borrower and the Guarantors will not, and will not permit
their respective Subsidiaries to, sell, transfer or otherwise dispose of any
material asset other than pursuant to a bona fide arm’s length transaction. The
Borrower and the REIT shall not, individually or as a series of transactions,
sell or transfer, or permit the sale or transfer of, all or substantially all of
their assets (whether direct or indirect).

§8.9. Restriction on Prepayment of Indebtedness. The Borrower and the Guarantors
will not, and will not permit their respective Subsidiaries to, (a) prepay,
redeem, defease, purchase or otherwise retire the principal amount, in whole or
in part, of any Indebtedness other than the Obligations after the occurrence of
any Event of Default; provided, that the foregoing shall not prohibit (i) the
prepayment of Indebtedness which is financed solely from the proceeds of a new
loan which would otherwise be permitted by the terms of §8.1; and (ii) the
prepayment, redemption, defeasance or other retirement of the principal of
Indebtedness secured by Real Estate which is satisfied solely from the proceeds
of a sale of the Real Estate securing such Indebtedness; and (b) modify any
document evidencing any Indebtedness (other than the Obligations) to accelerate
the maturity date of such Indebtedness after the occurrence of an Event of
Default.

 

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§8.10. Derivatives Contracts. Neither the Borrower, the Guarantors nor any of
their Subsidiaries shall contract, create, incur, assume or suffer to exist any
Derivatives Contracts except for interest rate swap, collar, cap or similar
agreements providing interest rate protection for existing floating rate
Indebtedness made in the ordinary course of business and permitted pursuant to
§8.1.

§8.11. Transactions with Affiliates. Neither the Borrower nor the Guarantors
shall, and none of them shall permit any Subsidiary of the Borrower or any
Guarantor to, permit to exist or enter into, any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate, except transactions pursuant to the reasonable
requirements of the business of such Person and upon fair and reasonable terms
which are no less favorable to such Person than would be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate,

§8.12. Equity Pledges. Notwithstanding anything in this Agreement to the
contrary, REIT will not create or incur or suffer to be created or incurred any
Lien on any of its direct or indirect legal, equitable or beneficial interest in
the Borrower, including, without limitation, any Distributions or rights to
Distributions on account thereof.

§8.13. Sanctions Laws and Regulations.

(a) The Borrower shall not, directly or indirectly, use the proceeds of the
Loans, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other person or entity (i) to fund any
activities or business of or with any Designated Person, or in any country or
territory, that at the time of such funding is the subject of any sanctions
under any Sanctions Laws and Regulations, or (ii) in any other manner that would
result in a violation of any Sanctions Laws and Regulations by any party to this
Agreement.

(b) None of the funds or assets of the Borrower that are used to pay any amount
due pursuant to this Agreement shall constitute funds obtained from transactions
with or relating to Designated Persons or countries which are the subject of
sanctions under any Sanctions Laws and Regulations.

 

§9. FINANCIAL COVENANTS.

The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:

§9.1. Borrowing Base. The Borrower will not at any time permit Consolidated
Total Unsecured Indebtedness (including the sum of the outstanding principal
balance of the Loans) to be greater than the Borrowing Base Availability.

§9.2. Unencumbered Leverage Ratio. The Borrower will not at any time permit
Consolidated Total Unsecured Indebtedness to exceed sixty percent (60%) of the
Unencumbered Asset Value.

§9.3. Minimum Unencumbered Interest Coverage Ratio. The Borrower will not at any
time permit the Unencumbered Interest Coverage Ratio to be less than 2.0 to
1.00.

 

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§9.4. Total Leverage Ratio. The Borrower will not at any time permit
Consolidated Total Indebtedness to exceed sixty percent (60%) of Consolidated
Total Asset Value.

§9.5. Total Secured Leverage Ratio. The Borrower will not at any time permit
Consolidated Total Secured Indebtedness to exceed the percentage set forth below
of Consolidated Total Asset Value for the period set forth below:

 

Period Ending

   Percentage  

December 31, 2013

     55 % 

December 31, 2014

     50 % 

June 30, 2015

     45 % 

Thereafter

     40 % 

§9.6. Adjusted Consolidated EBITDA to Consolidated Fixed Charges. The Borrower
will not at any time permit the ratio of (a) Adjusted Consolidated EBITDA to
(b) Consolidated Fixed Charges, in each case for the most recently ended four
(4) fiscal quarters to be less than 1.50 to 1.00.

§9.7. Minimum Consolidated Tangible Net Worth. The Borrower will not at any time
permit Consolidated Tangible Net Worth to be less than the sum of
(a) $1,566,239,512.00, plus (b) seventy-five percent (75%) of the Net Offering
Proceeds of each Equity Offering after December 31, 2011.

§9.8. Unhedged Variable Rate Debt. The Borrower will not at any time permit the
Unhedged Variable Rate Debt of REIT and its Subsidiaries to exceed twenty
percent (20%) of Consolidated Total Asset Value.

 

§10. CLOSING CONDITIONS.

The obligation of the Lenders to make the Loans shall be subject to the
satisfaction of the following conditions precedent:

§10.1. Loan Documents. Each of the Loan Documents shall have been duly executed
and delivered by the respective parties thereto and shall be in full force and
effect. Borrower shall deliver to Agent a Term Note for each Lender that
requests the same. The Agent shall have received a fully executed counterpart of
each such document.

§10.2. Certified Copies of Organizational Documents. The Agent shall have
received from the Borrower and each Guarantor a copy, certified as of a recent
date by the appropriate officer of each State in which such Person is organized
and in which the Unencumbered Borrowing Base Properties are located and a duly
authorized officer, partner or member of such Person, as applicable, to be true
and complete, of the partnership agreement, corporate charter or operating
agreement and/or other organizational agreements of the Borrower or such
Guarantor, as applicable, and its qualification to do business, as applicable,
as in effect on such date of certification.

§10.3. Resolutions. All action on the part of the Borrower and each Guarantor,
as applicable, necessary for the valid execution, delivery and performance by
such Person of this

 

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Agreement and the other Loan Documents to which such Person is or is to become a
party shall have been duly and effectively taken, and evidence thereof
reasonably satisfactory to the Agent shall have been provided to the Agent.

§10.4. Incumbency Certificate; Authorized Signers. The Agent shall have received
from the Borrower and each Guarantor an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Person and giving the
name and bearing a specimen signature of each individual who shall be authorized
to sign, in the name and on behalf of such Person, each of the Loan Documents to
which such Person is or is to become a party. The Agent shall have also received
from the Borrower a certificate, dated as of the Closing Date, signed by a duly
authorized representative of the Borrower and giving the name and specimen
signature of each Authorized Officer who shall be authorized to make Loan
Requests and Conversion/Continuation Requests and to give notices and to take
other action on behalf of the Borrower under the Loan Documents.

§10.5. Opinion of Counsel. The Agent shall have received an opinion addressed to
the Lenders and the Agent and dated as of the Closing Date from counsel to the
Borrower and the Guarantors in form and substance reasonably satisfactory to the
Agent.

§10.6. Payment of Fees and Expenses. The Borrower and the Guarantors shall have
paid to the Agent the fees payable pursuant to §4.2 and the expenses payable
pursuant to §15.

§10.7. Performance; No Default. The Borrower and the Guarantors shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Closing Date, and on the
Closing Date there shall exist no Default or Event of Default.

§10.8. Representations and Warranties. The representations and warranties made
by the Borrower and the Guarantors in the Loan Documents or otherwise made by or
on behalf of the Borrower, the Guarantors and their respective Subsidiaries in
connection therewith or after the date thereof shall have been true and correct
in all material respects when made and shall also be true and correct in all
material respects on the Closing Date.

§10.9. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory to the Agent and the Agent’s counsel in form and
substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions, assurances, consents, approvals or documents as the
Agent and the Agent’s counsel may reasonably require.

§10.10. Eligible Real Estate Qualification Documents. The Eligible Real Estate
Qualification Documents for each Unencumbered Borrowing Base Property included
in the Borrowing Base as of the Closing Date shall have been delivered to the
Agent at the Borrower’s expense and shall be in form and substance satisfactory
to the Agent.

§10.11. Compliance Certificate. The Agent shall have received a Compliance
Certificate and Borrowing Base Certificate dated as of the date of the Closing
Date demonstrating compliance with each of the covenants calculated therein on a
pro-forma basis after giving effect

 

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to the Loans contemplated hereunder as of the most recent fiscal quarter for
which REIT has provided financial statements under §6.4 adjusted in the best
good faith estimate of REIT as of the Closing Date.

§10.12. Consents. The Agent shall have received evidence reasonably satisfactory
to the Agent that all necessary stockholder, partner, member or other consents
required in connection with the consummation of the transactions contemplated by
this Agreement and the other Loan Documents have been obtained.

§10.13. Reserved.

§10.14. Other. The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent’s Special Counsel may reasonably have requested.

 

§11. CONDITIONS TO ALL BORROWINGS.

The obligations of the Lenders to make any Loan, whether on or after the Closing
Date, shall also be subject to the satisfaction of the following conditions
precedent:

§11.1. Prior Conditions Satisfied. All conditions set forth in §10 shall
continue to be satisfied as of the date upon which any Loan is to be made.

§11.2. Representations True; No Default. Each of the representations and
warranties made by or on behalf of the Borrower, the Guarantors or any of their
respective Subsidiaries contained in this Agreement, the other Loan Documents or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true in all material respects both as of the date as of which
they were made and shall also be true in all material respects as of the time of
the making of such Loan, with the same effect as if made at and as of that time
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct
only as of such specified date, and that any representation or warranty that is
qualified by any materiality standard shall be required to be true and correct
in all respects), and no Default or Event of Default shall have occurred and be
continuing.

§11.3. Borrowing Documents. The Agent shall have received a fully completed Loan
Request for such Loan and the other documents, and information as required by
§2.7.

 

§12. EVENTS OF DEFAULT; ACCELERATION; ETC.

§12.1. Events of Default and Acceleration. If any of the following events
(“Events of Default” or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, “Defaults”) shall occur:

(a) the Borrower shall fail to pay any principal of the Loans when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;

 

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(b) the Borrower shall fail to pay any interest on the Loans or any fees or
other Obligations due hereunder or under any of the other Loan Documents (other
than those described in §12.1(a)) when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;

(c) the Borrower or any of their respective Subsidiaries shall fail to perform
any other term, covenant or agreement contained in §§9.1 - 9.8;

(d) the Borrower, the Guarantors or any of their respective Subsidiaries shall
fail to perform any other term, covenant or agreement contained herein or in any
of the other Loan Documents which they are required to perform (other than those
specified in the other subclauses of this §12 or in the other Loan Documents);

(e) any representation or warranty made by or on behalf of the Borrower, the
Guarantors or any of their respective Subsidiaries, in this Agreement or any
other Loan Document, or any report, certificate, financial statement request for
a Loan or in any other document or instrument delivered pursuant to or in
connection with this Agreement, any advance of a Loan or any of the .other Loan
Documents shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated;

(f) the Borrower, the Guarantors or any of their respective Subsidiaries shall
fail to pay when due (including, without limitation, at maturity), or within any
applicable period of grace, any principal, interest or other amount on account
of any obligation for borrowed money or credit received or under a Derivatives
Contract or other Indebtedness, or shall fail to observe or perform any term,
covenant or agreement, or any other event occurs, contained in any agreement by
which it is bound, evidencing or securing any obligation for borrowed money or
credit received or under a Derivatives Contract or other Indebtedness for such
period of time as would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof or require the prepayment, redemption,
settlement or purchase thereof; provided that the events described in this
§12.1(f) shall not constitute an Event of Default unless such failure to pay or
perform or the occurrence of such event, together with other failures to pay or
perform or the occurrence of such events as described in this §12.1(f), involve
singly or in the aggregate (i) obligations for Indebtedness (other than
Non-Recourse Indebtedness) totaling in excess of $25,000,000.00 or
(ii) Non-Recourse Indebtedness totaling in excess of $50,000,000.00;

(g) the Borrower, the Guarantors or any of their respective Material
Subsidiaries (i) shall make an assignment for the benefit of creditors, or admit
in writing its general inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver for it or any substantial
part of its assets, (ii) shall commence any case or other proceeding relating to
it under any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or (iii) shall take any action to authorize or in
furtherance of any of the foregoing;

 

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(h) a petition or application shall be filed for the appointment of a trustee or
other custodian, liquidator or receiver of the Borrower, the Guarantors or any
of their respective Material Subsidiaries or any substantial part of the assets
of any thereof, or a case or other proceeding shall be commenced against any
such Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, and any such Person shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within sixty
(60) days following the filing or commencement thereof;

(i) a decree or order is entered appointing a trustee, custodian, liquidator or
receiver for any of the Borrower, the Guarantors or any of their respective
Material Subsidiaries or adjudicating any such Person, bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of any such Person in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;

(j) there shall remain in force, undischarged, unsatisfied and unstayed, for
more than thirty (30) days, whether or not consecutive, one or more uninsured or
unbonded final judgments, orders or awards against the Borrower, the Guarantors
or any of their respective Subsidiaries that exceed $50,000,000.00 per
occurrence or in the aggregate in any calendar year;

(k) any of the Loan Documents or the Contribution Agreement (if any) shall be
disavowed, canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or the express prior written agreement,
consent or approval of the Lenders, or any action at law, suit in equity or
other legal proceeding to disavow, cancel, revoke or rescind any of the Loan
Documents or the Contribution Agreement (if any), or to contest or challenge the
validity or enforceability of any of the Loan Documents or the Contribution
Agreement (if any) shall be commenced by or on behalf of the Borrower or any of
the Guarantors, or any court or any other governmental or regulatory authority
or agency of competent jurisdiction shall make a determination, or issue a
judgment, order, decree or ruling, to the effect that any one or more of the
Loan Documents or the Contribution Agreement (if any) is illegal, invalid or
unenforceable in accordance with the terms thereof;

(l) any dissolution, termination, partial or complete liquidation, merger or
consolidation of the Borrower, any of the Guarantors or any of their respective
Subsidiaries shall occur or any sale, transfer or other disposition of the
assets of the Borrower, any of the Guarantors or any of their respective
Subsidiaries shall occur other than as permitted under the terms of this
Agreement or the other Loan Documents;

(m) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall
have occurred and the Required Lenders shall have determined in their reasonable
discretion that such event reasonably could be expected to result in. liability
of the Borrower, any of the Guarantors or any of their, respective Subsidiaries
to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
$20,000,000.00 and (x) such event in the circumstances occurring reasonably
could constitute grounds for the termination of such

 

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Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan; or (y) a trustee shall have been appointed by the United States District
Court to administer such Plan; or (z) the PBGC shall have instituted proceedings
to terminate such Guaranteed Pension Plan;

(n) the Borrower, any Guarantor or any of their respective Subsidiaries or any
shareholder, officer, director, partner or member of any of them shall be
indicted for a federal crime, a punishment for which could include the
forfeiture of (i) any assets of the Borrower, the Guarantors or any of their
respective Subsidiaries which in the good faith judgment of the Required Lenders
could have a Material Adverse Effect, or (ii) any of the Unencumbered Borrowing
Base Properties;

(o) any Change of Control shall occur;

(p) an Event of Default under any of the other Loan Documents shall occur; or

(q) the REIT shall fail to maintain its status, and election to be treated, as a
real estate investment trust under the Code, or the REIT shall fail to cause its
common shares to be duly listed and traded on the New York Stock Exchange.

then, and in any such event, the Agent may, and upon the request of the Required
Lenders shall, by notice in writing to the Borrower declare all amounts owing
with respect to this Agreement, the Notes, and the other Loan Documents to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in §12.1(g), §12.1(h) or §12.1(i), all such amounts shall
become immediately due and payable automatically and without any requirement of
presentment, demand, protest or other notice of any kind from any of the Lenders
or the Agent, all of which are hereby expressly waived by the Borrower.

§12.2. Certain Cure Periods; Limitation of Cure Periods. Notwithstanding
anything contained in §12.1 to the contrary, (i) no Event of Default shall exist
hereunder upon the occurrence of any failure described in §12.1(b) in the event
that the Borrower cures such Default within five (5) Business Days after the
date such payment is due, provided, however, that no such cure period shall
apply to any payments due upon the maturity of the Notes, and (ii) no Event of
Default shall exist hereunder upon the occurrence of any failure described in
§12.1(d) in the event that with respect to a Default under §7.4(c) the Borrower
cures such Default within ten (10) days of the date the deliveries under §7.4(c)
are due, or with respect to the other Defaults covered by §12.1(d), in the event
that the Borrower cures such Default within thirty (30) days following receipt
of written notice of such default, provided that the provisions of this clause
(ii) shall not pertain to defaults consisting of a failure to comply with §7.12,
§7.14, §7.17, §8.1, §8.2, §8.3, §8.4, §8.5, §8.7, §8.8, §8.9, §8.10, §8.12, or
to any Default excluded from any provision of cure of defaults contained in any
other of the Loan Documents.

§12.3. Termination of Commitments. If any one or more Events of Default
specified in §12.1(g), §12.1(h) or §12.1(i) shall occur, then immediately and
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the Agent or any Lender any unused portion of the credit hereunder shall
terminate and the Lenders shall be relieved of all obligations to make Loans to
the Borrower. If any other Event of Default shall have occurred, the Agent may,
and upon the election of the Required Lenders shall, by notice to the Borrower
terminate the obligation to make Loans to the Borrower. No termination under
this §12.3 shall relieve the Borrower or the Guarantors of their obligations to
the Lenders arising under this Agreement or the other Loan Documents.

§12.4. Remedies. In case any one or more Events of Default shall have occurred
and be continuing, and whether or not the Lenders shall have accelerated the
maturity of the Loans pursuant to §12.1, the Agent on behalf of the Lenders may,
and upon the direction of the Required Lenders shall, proceed to protect and
enforce their rights and remedies under this Agreement, the Notes and/or any of
the other Loan Documents by suit in equity, action at law or other appropriate
proceeding, including to the full extent permitted by applicable law the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents, the obtaining of the ex parte appointment of a
receiver, and, if any amount shall have become due, by declaration or otherwise,
the enforcement of the payment thereof. No remedy herein conferred upon the
Agent or the holder of any Note is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law. Notwithstanding the provisions of this
Agreement providing that the Loans may be evidenced by multiple Notes in favor
of the Lenders, the Lenders acknowledge and agree that only the Agent may
exercise any remedies arising by reason of a Default or Event of Default. If the
Borrower or any Guarantor fails to perform any agreement or covenant contained
in this Agreement or any of the other Loan Documents beyond any applicable
period for notice and cure, Agent may itself perform, or cause to be performed,
any agreement or covenant of such Person contained in this Agreement or any of
the other Loan Documents which such Person shall fail to perform, and the
out-of-pocket costs of such performance, together with any reasonable expenses,
including reasonable attorneys’ fees actually incurred (including attorneys’
fees incurred in any appeal) by Agent in connection therewith, shall be payable
by the Borrower and/or the Guarantors upon demand and shall constitute a part of
the Obligations and shall if not paid within five (5) days after demand bear
interest at the Default Rate. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower and the
Guarantors shall pay all costs of collection including, but not limited to,
reasonable attorney’s fees.

§12.5. Distribution of Proceeds. In the event that, following the occurrence and
during the continuance of any Event of Default, any monies are received in
connection with the enforcement of any of the Loan Documents, or otherwise with
respect to the realization upon any of the assets of the Borrower or the
Guarantors, such monies shall be distributed for application as follows:

(a) First, to the payment of or (as the case may be) the reimbursement of the
Agent for or in respect of, all reasonable out-of-pocket costs, expenses,
disbursements and losses which shall have been paid; incurred or sustained by
the Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent or the Lenders under this Agreement
or any of the other Loan Documents or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall have, or
may have, priority over the rights of the Agent or the Lenders to such monies;

 

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(b) Second, to all other Obligations (including any interest, expenses or other
obligations incurred after the commencement of a bankruptcy) in such order or
preference as the Required Lenders shall determine; provided, that
(i) distributions in respect of such other Obligations shall include, on a pari
passu basis, any Agent’s fee payable pursuant to §4.3; (ii) in the event that
any Lender is a Defaulting Lender, payments to such Lender shall be governed by
§2.13; and (iii) except as otherwise provided in clause (ii), Obligations owing
to the Lenders with respect to each type of Obligation such as interest,
principal, fees and expenses shall be made among the Lenders pro rata; and
provided, further that the Required Lenders may in their discretion make proper
allowance to take into account any Obligations not then due and payable; and

(c) Third, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.

 

§13. SETOFF.

Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits (general or specific, time or demand, provisional
or final, regardless of currency, maturity, or the branch where such deposits
are held) or other sums credited by or due from any Lender to the Borrower or
the Guarantors and any securities or other property of the Borrower or the
Guarantors in the possession of such Lender may, without notice to the Borrower
or any Guarantor (any such notice being expressly waived by the Borrower and the
Guarantors) but with the prior written approval of Agent, be applied to or set
off against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower or the Guarantors to such Lender, Agent
will promptly provide Borrower with notice of any such set off of which Agent
has received written notice. Each of the Lenders agrees with each other Lender
that if such Lender shall receive from the Borrower or a Guarantor, whether by
voluntary payment, exercise of the right of setoff, or otherwise, and shall
retain and apply to the payment of the Note or Notes held by such Lender any
amount in excess of its ratable portion of the payments received by all of the
Lenders with respect to the Notes held by all of the Lenders, such Lender will
make such disposition and arrangements with the other Lenders with respect to
such excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest. In
the event that any Defaulting Lender shall exercise any such right of setoff,
(a) all amounts so set off shall be paid over immediately to the Agent for
further application in accordance with the provisions of this Agreement and,
pending such payment, shall be segregated by such Defaulting Lender from its
other funds and deemed held in trust for the benefit of the Agent and the
Lenders, and (b) the Defaulting Lender shall provide promptly to the Agent a
statement describing in reasonable detail the Obligations owing to such
Defaulting Lender as to which it exercised such right of setoff.

 

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§14. THE AGENT.

§14.1. Authorization. The Agent is authorized to take such action on behalf of
each of the Lenders and to exercise all such powers as are hereunder and under
any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The obligations of the Agent
hereunder are primarily administrative in nature, and nothing contained in this
Agreement or any of the other Loan Documents shall be construed to constitute
the Agent as a trustee for any Lender or to create an agency or fiduciary
relationship. Agent shall act as the contractual representative of the Lenders
hereunder, and notwithstanding the use of the term “Agent”, it is understood and
agreed that Agent shall not have any fiduciary duties or responsibilities to any
Lender by reason of this Agreement or any other Loan Document and is acting as
an independent contractor, the duties and responsibilities of which are limited
to those expressly set forth in this Agreement and the other Loan Documents. The
Borrower and any other Person shall be entitled to conclusively rely on a
statement from the Agent that it has the authority to act for and bind the
Lenders pursuant to this Agreement and the other Loan Documents.

§14.2. Employees and Agents. The Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Agreement and the other Loan Documents. The Agent may utilize
the services of such Persons as the Agent may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.

§14.3. No Liability. Neither the Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent, or employee thereof, shall be liable for (a) any waiver, consent or
approval given or any action taken, or omitted to be taken, in good faith by it
or them hereunder or under any of the other Loan Documents, or in connection
herewith or therewith, or be responsible for the consequences of any oversight
or error of judgment whatsoever, except that the Agent or such other Person, as
the case may be, shall be liable for losses due to its willful misconduct or
gross negligence as finally determined by a court of competent jurisdiction
after the expiration of all applicable appeal periods or (b) any action taken or
not taken by Agent with the consent or at the request of the Required Lenders
(or, where required hereunder, all of the affected Lenders). The Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Agent for the account of the
Lenders, unless the Agent has received notice from a Lender or the Borrower
referring to the Loan Documents and describing with reasonable specificity such
Default or Event of Default and stating that such notice is a “notice of
default”.

§14.4. No Representations. The Agent shall not be responsible for the execution
or validity or enforceability of this Agreement; the Notes, any of the other
Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein, or any agreement, instrument or
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therewith or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower, the
Guarantors or any of their respective Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any of the other Loan Documents. The Agent
shall not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower, the Guarantors or any holder of any of the
Notes shall have been duly authorized or is true, accurate and complete. The
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Lenders, with
respect to the creditworthiness or financial condition of the Borrower, the
Guarantors or any of their respective Subsidiaries, or the value of any
collateral or any other assets of the Borrower, the Guarantors or any of their
respective Subsidiaries. Each Lender acknowledges that it has, independently and
without reliance upon the Agent or any other Lender, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender, based upon such information and documents as it deems
appropriate at the time, continue to make its own credit analysis and decisions
in taking or not taking action under this Agreement and the other Loan
Documents. Agent’s Special Counsel has only represented Agent and JPMorgan in
connection with the Loan Documents and the only attorney client relationship or
duty of care is between Agent’s Special Counsel and Agent or JPMorgan. Each
Lender has been independently represented by separate counsel on all matters
regarding the Loan Documents.

§14.5. Payments.

(a) A payment by the Borrower or the Guarantors to the Agent hereunder or under
any of the other Loan Documents for the account of any Lender shall constitute a
payment to such Lender. The Agent agrees to distribute to each Lender not later
than one (1) Business Day after the Agent’s receipt of good funds, determined in
accordance with the Agent’s customary practices, such Lender’s pro rata share of
payments received by the Agent for the account of the Lenders except as
otherwise expressly provided herein or in any of the other Loan Documents.
Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, each payment by the Borrower hereunder shall be
applied in accordance with §2.13(d).

(b) If in the opinion of the Agent the distribution of any amount received by it
in such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making such
distribution until its right to make such distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

§14.6. Holders of Notes. Subject to the terms of §18, the Agent may deem and
treat the payee of any Note as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.

 

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§14.7. Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by §15), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced- hereby or thereby, or the Agent’s
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent’s willful misconduct or gross negligence
as finally determined by a court of competent jurisdiction after the expiration
of all applicable appeal periods. The agreements in this §14.7 shall survive the
payment of all amounts payable under the Loan Documents.

§14.8. Agent as Lender. In its individual capacity, JPMorgan shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.

§14.9. Resignation; Removal. The Agent may resign at any time by giving thirty
(30) calendar days’ prior written notice thereof to the Lenders and the
Borrower. The Required Lenders (excluding for the purposes hereof the Commitment
of the Lender acting as Agent) may remove the Agent in the event of (a) a
material breach by Agent in the performance of its duties hereunder which is not
cured within thirty (30) days after written notice thereof to the Agent or
(b) Agent’s gross negligence or willful misconduct. Upon any such resignation or
removal, the Required Lenders, subject to the terms of §18.1, shall have the
right to appoint as a successor Agent, any Lender or any bank whose senior debt
obligations are rated not less than “A2” or its equivalent by Moody’s or not
less than “A” or its equivalent by S&P and which has a net worth of not less
than $500,000,000.00. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower, which acceptance shall not be unreasonably withheld or delayed. If no
successor Agent shall have been appointed and shall have accepted such
appointment within thirty (30) days after the retiring Agent’s giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be any Lender or any financial institution Whose
senior debt obligations are rated not less than “A” or its equivalent by Moody’s
or not less than “A” or its equivalent by S&P and which has a net worth of not
less than $500,000,000.00. Unless a Default or Event of Default shall have
occurred and be continuing, such successor Agent shall be reasonably acceptable
to the Borrower, which acceptance shall not be unreasonably withheld or delayed.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent, and the
retiring or removed Agent shall be discharged from its duties and obligations
hereunder as Agent. After any retiring Agent’s resignation or its removal, the
provisions of this Agreement and the other Loan Documents shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent. Upon any change in the Agent under this
Agreement, the resigning or removed Agent shall execute such assignments of and
amendments to the Loan Documents as may be necessary to substitute the successor
Agent for the resigning or removed Agent.

 

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§14.10. Duties in the Case of Enforcement. In case one or more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent may and, if (a) so requested by the
Required Lenders and (b) the Lenders have provided to the Agent such additional
indemnities and assurances in accordance with their respective Commitment
Percentages against expenses and liabilities as the Agent may reasonably
request, shall proceed to exercise all or any legal and equitable and other
rights or remedies as it may have; provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders. Without limiting the generality of the foregoing, if Agent
reasonably determines payment is in the best interest of all the Lenders, Agent
may without the approval of the Lenders pay taxes and insurance premiums and
spend money for maintenance, repairs or other expenses which may be necessary to
be incurred, and Agent shall promptly thereafter notify the Lenders of such
action. Each Lender shall, within thirty (30) days of request therefor, pay to
the Agent its Commitment Percentage of the reasonable costs incurred by the
Agent in taking any such actions hereunder to the extent that such costs shall
not be promptly reimbursed to the Agent by the Borrower within such period. The
Required Lenders may direct the Agent in writing as to the method and the extent
of any such exercise, the Lenders hereby agreeing to indemnify and hold the
Agent harmless in accordance with their respective Commitment Percentages from
all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions except to the extent that any of the same shall
be directly caused by the Agent’s willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction, provided that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent’s compliance with such direction to be unlawful in any
applicable jurisdiction or commercially unreasonable in any applicable
jurisdiction.

§14.11. Agent May File Proofs of Claim. In the event a bankruptcy or other
insolvency proceeding is commenced by or against Borrower or any Guarantor, the
Agent shall have the sole and exclusive right to file and pursue a joint proof
claim on behalf of all Lenders. Any votes with respect to such claims or
otherwise with respect to such proceedings shall be subject to the vote of the
Required Lenders or all of the Lenders as required by this Agreement. Each
Lender irrevocably waives its right to file or pursue a separate proof of claim
in any such proceedings unless Agent fails to file such claim within thirty
(30) days after receipt of written notice from the Lenders requesting that Agent
file such proof of claim.

§14.12. Reliance by Agent. The Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate;
consent, statement, instrument, document or other writing (including any
electronic message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by an Authorized Officer. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan,
that by its terms must be fulfilled to the satisfaction of a Lender, the Agent
may presume that such condition is satisfactory to such Lender unless the Agent
shall have received notice to the contrary from such Lender prior to the making
of such Loan. The Agent may consult with legal counsel (who may be counsel for
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Guarantors), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

§14.13. Approvals. If consent of the Required Lenders is required for some
action under this Agreement, or except as otherwise provided herein an approval
of the Required Lenders is required or permitted under this Agreement, each
Lender agrees to give the Agent, within ten (10) Business Days of receipt of the
request for action together with all reasonably requested information related
thereto (or such lesser period of time required by the terms of the Loan
Documents), notice in writing of approval or disapproval (collectively
“Directions”) in respect of any action requested or proposed in writing pursuant
to the terms hereof. To the extent that any Lender does not approve any
recommendation of Agent, such Lender shall in such notice to Agent describe the
actions that would be acceptable to such Lender. If consent is required for the
requested action, any Lender’s failure to respond to a request for Directions
within the required time period shall be deemed to constitute a Direction to
take such requested action. In the event that any recommendation is not approved
by the requisite number of Lenders and a subsequent approval on the same subject
matter is requested by Agent, then for the purposes of this paragraph each
Lender shall be required to respond to a request for Directions within five
(5) Business Days of receipt of such request. Agent and each Lender shall be
entitled to assume that any officer of the other Lenders delivering any notice,
consent, certificate or other writing is authorized to give such notice,
consent, certificate or other Writing unless Agent and such other Lenders have
otherwise been notified in writing. The provisions of this §14.13 shall not
apply to any matter requiring approval of all Lenders or all affected Lenders.

§14.14. Borrower Not Beneficiary. Except for the provisions of §14.9 relating to
the appointment of a successor Agent, the provisions of this §14 are solely for
the benefit of the Agent and the Lenders, may not be enforced by the Borrower,
and except for the provisions of §14.9, may be modified or waived without the
approval or consent of the Borrower.

 

§15. EXPENSES.

The Borrower and the Guarantors agree to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any imposed taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Lenders (other than taxes based upon the Agent’s or any Lender’s gross or
net income), and including any taxes payable on or with respect to the
transactions contemplated by this Agreement, and further including any such
taxes payable by the Agent or any of the Lenders after the Closing Date (the
Borrower and the Guarantors hereby agreeing to indemnify the Agent and each
Lender with respect thereto), (c) the reasonable fees, expenses and
disbursements of the counsel to the Agent and any local counsel to the Agent
incurred in connection with the preparation, administration, or interpretation
of the Loan Documents and other instruments mentioned herein, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable out-of-pocket fees, costs, expenses and disbursements of Agent
incurred in connection with any syndication and/or participation of the Loans in
connection with the primary syndication of the Loans, (e) all other reasonable
actual and verifiable out-of-pocket fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation or interpretation
of the Loan Documents and other

 

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instruments mentioned herein, the making of each advance hereunder, and the
syndication of the Commitments pursuant to §18 (without duplication of those
items addressed in subparagraph (d), above), (f) all out-of-pocket expenses
(including reasonable attorneys’ fees and costs, and the reasonable fees and
costs of appraisers, engineers, investment bankers or other experts retained by
any Lender or the Agent) incurred by any Lender or the Agent in connection with
(i) the enforcement of or preservation of rights under any of the Loan Documents
against the Borrower and the Guarantors or the administration thereof after the
occurrence of a Default or Event of Default, including all such out-of-pocket
expenses incurred in connection with any workout, restructuring or negotiation
with respect thereto following the occurrence of a Default or an Event of
Default and (ii) any litigation, proceeding or dispute whether arising hereunder
or otherwise, in any way related to the Agent’s or any of the Lenders’
relationship with the Borrower or the Guarantors, (g) all reasonable fees,
expenses and disbursements of the Agent incurred in connection with UCC searches
and title searches, (h) all reasonable out-of-pocket fees, expenses and
disbursements (including reasonable attorneys’ fees and costs) which may be
incurred by JPMorgan in connection with the execution and delivery of this
Agreement and the Other Loan Documents (without duplication of any of the items
listed above), and (i) all expenses relating to the use of Intralinks, SyndTrak
or any other similar system for the dissemination and sharing of documents and
information in connection with the Loans. The covenants of this §15 shall
survive the repayment of the Loans and the termination of the obligations of the
Lenders hereunder.

 

§16. INDEMNIFICATION.

The Borrower agrees to indemnify and hold harmless the Agent, the Lenders and
each Arranger and each director, officer, employee, agent and Affiliate thereof
and Person who controls the Agent or any Lender or either Arranger against any
and all claims, actions and suits, whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses-of every nature
and character arising out of or relating to this Agreement or any of the other
Loan Documents or the transactions contemplated hereby and thereby or the
Transactions, including, without limitation, (a) any and all claims for
brokerage, leasing, finders or similar fees which may be made relating to the
Unencumbered Borrowing Base Properties or the Loans, (b) any condition of the
Unencumbered Borrowing Base Properties or any other Real Estate, (c) any actual
or proposed use by the Borrower of the proceeds of any of the Loans, (d) any
actual or alleged infringement of any patent, copyright, trademark, service mark
or similar right of the Borrower, the Guarantors or any of their respective
Subsidiaries; (e) the Borrower and the Guarantors entering into or performing
this Agreement or any of the other Loan Documents, (f) any actual or alleged
violation of any law, ordinance, code, order, rule, regulation, approval,
consent, permit or license relating to the Unencumbered Borrowing Base
Properties or any other Real Estate, (g) with respect to the Borrower, the
Guarantors and their respective Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the Release or threatened
Release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury, nuisance or damage to property), (h) any use of Intralinks, SyndTrak or
any other system for the dissemination and sharing of documents and information,
and (i) shareholder or other lawsuits threatened or filed, or investigation
undertaken as a result of the consummation of the Transactions, in each case
including, without limitation, the reasonable fees and disbursements

 

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of counsel incurred in connection with any such investigation, litigation or
other proceeding; provided, however, that the Borrower and the Guarantors shall
not be obligated under this §16 to indemnify any Person for liabilities arising
from such Person’s own gross negligence or willful misconduct as determined by a
court of competent jurisdiction after the exhaustion of all applicable appeal
periods. If, and to the extent that the obligations of the Borrower and the
Guarantors under this §16 are unenforceable for any reason, the Borrower and the
Guarantors hereby agree to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
provisions of this §16 shall survive the repayment of the Loans and the
termination of the obligations of the Lenders hereunder.

 

§17. SURVIVAL OF COVENANTS, ETC.

All covenants, agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower, the Guarantors or any of their
respective Subsidiaries pursuant hereto or thereto shall be deemed to have been
relied upon by the Lenders and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement or the Notes or
any of the other Loan Documents remains outstanding or any Lender has any
obligation to make any Loans. The indemnification obligations of the Borrower
provided herein and in the other Loan Documents shall survive the full repayment
of amounts due and the termination of the obligations of the Lenders hereunder
and thereunder to the extent provided herein and therein. All statements
contained in any certificate delivered to any Lender or the Agent at any time by
or on behalf of the Borrower, the Guarantors or any of their respective
Subsidiaries pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by such Person hereunder.

 

§18. ASSIGNMENT AND PARTICIPATION.

§18.1. Conditions to Assignment by Lenders. Except as provided herein, each
Lender May assign to one or more banks or other entities all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it); provided that (a) the
Agent, and, so long as no Default or Event of Default exists hereunder, the
Borrower shall have each given its prior written consent to such assignment,
which consent shall not be unreasonably withheld or delayed (provided that such
consent shall not be required for any assignment to another Lender, to a lender
or an Affiliate of a Lender which is and remains controlled by or is under
common control with the assigning Lender, to a Subsidiary which is and remains
wholly-owned by such Lender, or to an Approved Fund), provided further that the
Borrower will be deemed to have consented unless it provides notice to the Agent
and the assigning Lender of its disapproval within ten (10) Business Days of
receipt of such request, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Commitment in the event an interest in
the Loans is assigned, (c) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined) an
Assignment and Acceptance Agreement in the form of Exhibit I annexed hereto (the
“Assignment and

 

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Acceptance Agreement”), together with any Notes subject to such assignment,
(d) in no event shall any assignment be to any Person controlling, controlled.
by or under common control with, or which is not otherwise free from influence
or control by, the Borrower or any Guarantor or be a Defaulting Lender or an
Affiliate of a Defaulting Lender, (e) if the Total Commitment is not fully
advanced, such assignee of a portion of the Loans shall have a net worth or
unfunded commitment as of the date of such assignment of not less than
$100,000,000.00 (unless otherwise approved by Agent and, so long as no Default
or Event of Default exists hereunder, the Borrower) and (t) such assignee shall
acquire an interest in the Loans of not less than $5,000,000.00 and integral
multiples of $1,000,000.00 in excess thereof (or if less, the remaining Loans of
the assignor), unless waived by the Agent, and so long as no Default or Event of
Default exists hereunder, the Borrower. Upon execution, delivery, acceptance and
recording of such Assignment and Acceptance Agreement, (i) the assignee
thereunder shall be a party hereto and all other Loan Documents executed by the
Lenders and, to the extent provided in such Assignment and Acceptance Agreement,
have the rights and obligations of a Lender hereunder, (ii) the assigning Lender
shall, upon payment to the Agent of the registration fee referred to in §18.2,
be released from its obligations under this Agreement arising after the
effective date of Such assignment with respect to the assigned portion of its
interests, rights and obligations under this. Agreement, and (iii) the Agent may
unilaterally amend Schedule 1.1 to reflect such assignment. In connection with
each assignment, the assignee shall represent and warrant to the Agent, the
assignor and each other Lender as to whether such assignee is controlling,”
controlled by, under common control with or is not otherwise free from influence
or control by, the Borrower and the Guarantors and whether such assignee is a
Defaulting Lender or an Affiliate of a Defaulting Lender. In connection with any
assignment of rights and obligations of any Defaulting Lender, no such
assignment shall be effective unless and until, in addition to the other
conditions thereto set forth herein, the parties to the assignment shall make
such additional payments to the Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations or actions, including funding, with the consent
of the Borrower and the Agent, the applicable pro rata share of Loans previously
requested but not funded by the Defaulting Lender to each of which the
applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire
(and fund as appropriate) its full pro rata share of all Loans in accordance
with its Commitment Percentage. Notwithstanding the foregoing, in the event that
any assignment of rights and obligations of any Defaulting Lender hereunder
shall become effective under applicable law without compliance with the
provisions of this paragraph, then the assignee of such interest shall be deemed
to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs. Furthermore, in connection with any syndication of the Loan
by Agent and Arranger, the Borrower agrees to assist Agent and Arranger actively
with such syndication, such assistance to include, among other things,
(i) direct contact during the syndication between the Borrower’s senior
officers, representatives and advisors, on the one hand, and prospective
Lenders, on the other hand at such times and places as Agent or either Arranger
may reasonably request, (ii) providing to Agent and each Arranger all financial
and other information with respect to the Borrower and the transactions
contemplated hereunder that Agent or either Arranger may reasonably request,
including but not limited to financial projections relating to the foregoing,
and (iii) assistance in the preparation of a confidential information memorandum
and other marketing materials to be used in connection with the syndication.

 

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§18.2. Register. The Agent shall maintain on behalf of the Borrower a copy of
each assignment delivered to it and a register or similar list (the “Register”)
for the recordation of the names and addresses of the Lenders and the Commitment
Percentages of and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Agent a registration fee in the sum of $3,500.00.

§18.3. New Notes. Upon its receipt of an Assignment and Acceptance Agreement
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall record the information contained therein in the
Register. Within five (5) Business Days after receipt of notice of such
assignment from Agent, the Borrower, at its own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
order of such assignee in an amount equal to the amount assigned to such
assignee pursuant to such Assignment and Acceptance Agreement and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance Agreement and
shall otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be canceled and returned to the Borrower.

§18.4. Participations. Each Lender may sell participations to one or more
Lenders or other entities in all or a portion of such Lender’s. rights and
obligations under this Agreement and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder, (b) such participation shall not entitle such
participant to any rights or privileges under this Agreement or any Loan
Documents, including without limitation, rights granted to the Lenders under
§4.8, §4.9 and §4.10, (c) such participation shall not entitle the participant
to the right to approve waivers, amendments or modifications, (d) such
participant shall have no direct rights against the Borrower or the Guarantors,
(e) such sale is effected in accordance with all applicable laws, and (f) such
participant shall not be a Person controlling, controlled by or under common
control with, or which is not otherwise free from influence or control by the
Borrower or any of the Guarantors and shall not be a Defaulting Lender or an
Affiliate of a Defaulting Lender; provided, however, such Lender may agree with
the participant that it will not, without the consent of the participant, agree
to (i) increase, or extend the term or extend the time or waive any requirement
for the reduction or termination of, such Lender’s Commitment, (ii) extend the
date fixed for the payment of principal of or interest on the Loans or portions
thereof owing to such Lender, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon or
(v) release Borrower or any Guarantor (except as otherwise permitted under this
Agreement).

 

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§18.5. Pledge by Lender. Any Lender may at any time pledge all or any portion of
its interest and rights under this Agreement (including all or any portion of
its Note) to any of the twelve Federal Reserve Banks organized under §4 of the
Federal Reserve Act, 12 U.S.C. §341 or to such other Person as the Agent may
approve to secure obligations of such lenders. No such pledge or the enforcement
thereof shall release the pledgor Lender from its obligations hereunder or under
any of the other Loan Documents.

§18.6. No Assignment by the Borrower or the Guarantors. Neither the Borrower nor
the Guarantors shall assign or transfer any of their rights or obligations under
this Agreement or the other Loan Documents without the prior written consent of
each of the Lenders.

§18.7. Disclosure. The Borrower and the Guarantors each agree to promptly
cooperate with any Lender in connection with any proposed assignment or
participation of all or any portion of its Commitment. The Borrower and the
Guarantors each agree that in addition to disclosures made in accordance with
standard banking practices any Lender may disclose information obtained by such
Lender pursuant to this Agreement to assignees or participants and potential
assignees or participants hereunder. Each Lender agrees for itself that it shall
use reasonable efforts to hold confidential all non-public information obtained
from the Borrower or the Guarantors that has been identified in writing as
confidential by any of them, and shall use reasonable efforts to not disclose
such information to any other Person, it being understood and agreed that,
notwithstanding the foregoing, a Lender may make (a) disclosures to its
participants (provided such Persons are advised of the provisions of this
§18.7), (b) disclosures to its directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors of such
Lender (provided that Such Persons who are not employees of such Lender are
advised of the provision of this §18.7), (c) disclosures customarily provided or
reasonably required by any potential or actual bona fide assignee, transferee or
participant or their respective directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors in
connection with a potential or actual assignment or transfer by such Lender, of
any Loans or any participations therein (provided such Persons are advised of
the provisions of this §18.7), (d) disclosures to bank regulatory authorities or
self-regulatory bodies with jurisdiction over such Lender, or (e) disclosures
required or requested by any other governmental authority or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law, rule, regulation or court order, each Lender shall
notify the Borrower in writing of any request by any governmental authority or
representative thereof prior to disclosure (other than any such request in
connection with any examination of such Lender by such government authority) for
disclosure of any such non-public information prior to disclosure of such
information. In addition, each Lender may make disclosure of such information to
any contractual counterparty in swap agreements or such contractual
counterparty’s professional advisors (so long as such contractual counterparty
or professional advisors agree to be bound by the provisions of this §18.7).
Non-public information shall not include any information which is or
subsequently becomes publicly available other than as a result of a disclosure
of such information by a Lender, or prior to the delivery to such Lender is
within the possession of such Lender if such information is not known by such
Lender to be subject to another confidentiality agreement with or other
obligations of secrecy to the Borrower or the Guarantors, or is disclosed with
the prior approval of the Borrower or the Guarantors. Nothing herein shall
prohibit the disclosure of non-public information to the extent necessary to
enforce the Loan Documents.

 

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§18.8. Amendments to Loan Documents. Upon any such assignment or participation,
the Borrower and the Guarantors shall, upon the request of the Agent, enter into
such documents as may be reasonably required by the Agent to modify the Loan
Documents to reflect such assignment or participation; provided, however, no
documents or modifications shall increase or otherwise affect the Borrower’s or
any Guarantor’s liabilities hereunder or under any. Loan Document.

§18.9. Mandatory Assignment. In the event the Borrower requests that certain
amendments, modifications or waivers be made to this Agreement or any of the
other Loan Documents which request is approved by Agent and the Required Lenders
but is not approved by one or more of the Lenders (any such non-consenting
Lender shall hereafter be referred to as the “Non-Consenting Lender”), then,
within thirty (30) Business Days after the Borrower’s receipt of notice of such
disapproval by such Non-Consenting Lender, the Borrower shall have the right as
to such Non-Consenting Lender, to be exercised by delivery of written notice
delivered to the Agent and the Non-Consenting Lender within thirty (30) Business
Days of receipt of such notice, to elect to cause the Non-Consenting Lender to
transfer its Commitment. The Agent shall promptly notify the remaining Lenders
that each of such Lenders shall have the right, but not the obligation, to
acquire a portion of the Commitment, pro rata based upon their relevant
Commitment Percentages, of the Non-Consenting Lender (or if any of such Lenders
does not elect to purchase its pro rata share, then to such remaining Lenders in
such proportion as approved by the Agent). In the event that the Lenders do not
elect to acquire all of the Non-Consenting Lender’s Commitment, then the Agent
shall endeavor to find a new Lender or Lenders to acquire such remaining
Commitment. Upon any such purchase of the Commitment of the Non-Consenting
Lender, the Non-Consenting Lender’s interests in the Obligations and its rights
and obligations hereunder and under the Loan Documents shall terminate at the
date of purchase, and the Non-Consenting Lender shall promptly execute and
deliver any and all documents reasonably requested by Agent to surrender and
transfer such interest, including, without limitation, an Assignment and
Acceptance Agreement in the form attached hereto as Exhibit I and such
Non-Consenting Lender’s original Note. The purchase price for the Non-Consenting
Lender’s Commitment shall equal any and all amounts outstanding and owed by the
Borrower to the Non-Consenting Lender, including principal and all accrued and
unpaid interest or fees, plus any applicable amounts payable pursuant to §4.8
which would be owed to such Non-Consenting Lender if the Loans were to be repaid
in full on the date of such purchase of the Non-Consenting Lender’s Commitment
(provided that the Borrower may pay to such Non-Consenting Lender any interest,
fees or other amounts (other than principal) owing to such Non-Consenting
Lender).

§18.10. Titled Agents. The Titled Agents shall not have any additional rights or
obligations under the Loan Documents, except for those rights, if any, as a
Lender.

 

§19. NOTICES.

Except in the case of notices and other communications expressly permitted to be
given by telephone (and subject to paragraph (b) below), all notices
(hereinafter in this §19 referred to as “Notice”) and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

If to the Agent, to JPMorgan Chase Bank, Loan and Agency Services Group, 500
Stanton Christiana Road, Ops 2, Floor 03, Newark, DE, 19713-2107, Attention of
Taieshia Reefer (Telecopy No. 302-634-4733)

 

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To each Lender, at the address specified for such Person on Schedule 19, and to
any Lender which may hereafter become a party to this Agreement, at such address
as may be designated by such Lender;

If to the Borrower:

Mid-America Apartments, L.P.

6584 Poplar Avenue

Memphis, Tennessee 38138

Attn: Andrew Schaeffer

Telecopy No.: (901) 682-6667

With a copy to:

Bass, Berry & Sims, PLC

100 Peabody Place, Suite 900

Memphis, Tennessee 38103

Attn: John A. Stemmler

Telecopy No.: (901) 543-5999

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through Electronic Systems, to the extent provided
in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b) Notices and other communications to the Lenders and the Issuing Bank
hereunder may be delivered or furnished by using Electronic Systems pursuant to
procedures approved by the Agent; provided that the foregoing shall not apply to
notices pursuant to Article II unless otherwise agreed by the Agent and the
applicable Lender. The Agent or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

 

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(c) Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

 

§20. RELATIONSHIP.

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), the Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Agent, the Arranger, and
the Lenders are arm’s-length commercial transactions between the Borrower and
its Affiliates, on the one hand, and the Agent, the Arranger, and the Lenders,
on the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Agent, the Arranger and each Lender is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for the Borrower or any of its Affiliates, or any other
Person and (B) neither the Agent, the Arranger nor any Lender has any obligation
to the Borrower or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Agent, the Arranger and the Lenders and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower and its Affiliates, and
neither the Agent, the Arranger, nor any Lender has any obligation to disclose
any of such interests to the Borrower or its Affiliates. To the fullest extent
permitted by law, the Borrower hereby waives and releases any claims that it may
have against the Agent, the Arranger or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

§21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED HEREIN OR THEREIN, SHALL, PURSUANT TO NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK (INCLUDING ANY FEDERAL COURT SITTING
THEREIN). THE BORROWER FURTHER ACCEPTS, GENERALLY AND UNCONDITIONALLY; THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND
IRREVOCABLY (i) AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY WITH RESPECT
TO THIS AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS AND (ii) WAIVES ANY
OBJECTION IT MAY NOW OR

 

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HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT OR
THAT SUCH A COURT IS AN INCONVENIENT FORUM. THE BORROWER FURTHER AGREES THAT
SERVICE OF PROCESS IN ANY SUCH SUIT MAY BE MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 19 HEREOF. IN ADDITION TO THE COURTS OF THE STATE
OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT OR ANY LENDER MAY
BRING ACTION(S) FOR ENFORCEMENT ON A NONEXCLUSIVE BASIS WHERE ANY ASSETS OF THE
BORROWER AND THE GUARANTORS EXIST AND THE BORROWER CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19 HEREOF.

 

§22. HEADINGS.

The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof.

 

§23. COUNTERPARTS.

This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.

 

§24. ENTIRE AGREEMENT, ETC.

This Agreement and the Loan Documents is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this Agreement
and the Loan Documents. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superseded by this
Agreement and the Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement and the Loan
Documents. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in §27.

 

§25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
PUNITIVE OR ANY DAMAGES OTHER THAN, OR IN

 

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ADDITION TO, ACTUAL DAMAGES OR DAMAGES OR OTHER REMEDIES EXPRESSLY PROVIDED FOR
IN THIS AGREEMENT. THE BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY LENDER OR THE AGENT HAS. REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND ACKNOWLEDGES THAT THE AGENT AND THE LENDERS
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO
WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS §25. THE BORROWER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY
TO REVIEW THIS §25 WITH LEGAL COUNSEL AND THE BORROWER AGREES TO THE FOREGOING
AS ITS FREE, KNOWING AND VOLUNTARY ACT.

 

§26. DEALINGS WITH THE BORROWER AND THE GUARANTORS.

The Agent, the Lenders and their affiliates may accept deposits from, extend
credit to, invest in, act as trustee under indentures of, serve as financial
advisor of, and generally engage in any kind of banking, trust or other business
with the Borrower, the Guarantors and their respective Subsidiaries or any of
their Affiliates regardless of the capacity of the Agent or the Lender
hereunder. The Lenders acknowledge that, pursuant to such activities, JPMorgan
or its Affiliates may receive information regarding such Persons (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Agent shall be under no obligation to provide
such information to them.

 

§27. CONSENTS, AMENDMENTS, WAIVERS, ETC.

Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower or the Guarantors
of any terms of this Agreement or such other instrument or the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Required Lenders. Notwithstanding the
foregoing, none of the following may occur without the written consent of each
Lender directly affected thereby: (a) a reduction in the rate of interest on the
Loans (other than a reduction or waiver of default interest); (b) an increase in
the amount of the Commitments of the Lenders; (c) a forgiveness, reduction or
waiver of the principal of any unpaid Loan or any interest thereon (other than
interest at the Default Rate) or fee payable under the Loan Documents; (d) a
change in the amount of any fee payable to a Lender hereunder; (e) the
postponement of any date fixed for any payment of principal of or interest on
the Loan; (f) a change in the manner of distribution of any payments to the
Lenders or the Agent pursuant to §12.5 or §14.5(a); (g) the release of the
Borrower or any Guarantor except as otherwise provided in this Agreement; (h) an
amendment of the definition of Required Lenders or of any requirement for
consent by all of the Lenders; (i) any modification to require a Lender to fund
a pro rata share of a request for an advance of the Loan made by the Borrower
other than based on its Commitment Percentage; (j) an amendment to this §27;
(k) a waiver of any Default or Event of Default under §12.1(a) or §12.1(b); or
(1) an

 

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amendment of any provision of this Agreement or the Loan Documents which
requires the approval of all of the Lenders or the Required Lenders to require a
lesser number of Lenders to approve such action. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder (and any amendment, waiver
or consent which by its terms requires the consent of all Lenders or each
affected Lender may be effected with the consent of the applicable Lenders other
than Defaulting Lenders) except that the Commitment of any Defaulting Lender may
not be increased without the consent of such Lender. The provisions of §14 may
not be amended without the written consent of the Agent. The Borrower and the
Guarantors each agree to enter into such modifications or amendments of this
Agreement or the other Loan Documents as reasonably may be requested by JPMorgan
in connection with any syndication of the Loan, provided that no such amendment
or modification materially affects or increases any of the obligations of the
Borrower or the Guarantors hereunder. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon any of the Borrower or the
Guarantors shall entitle the Borrower or the Guarantors to other or further
notice or demand in similar or other circumstances.

Notwithstanding anything set forth herein to the contrary, if (i) J.P. Morgan
Securities LLC acts as a joint lead arranger (or is offered such position in a
facility that contains substantially the same terms set forth in the draft of
the KeyBank, National Association term sheet for such facility, dated April 3,
2013, and declines to so act) in a refinancing of the Existing Revolving Credit
Facility within four (4) months after the Closing Date (such refinanced
facility, the “New Revolver Facility”), and (ii) the representations and
warranties, covenants and/or events of default (including, in each case, any
related definitions) in such New Revolver Facility that are also included in
this Agreement are revised from those set forth in the Existing Revolving Credit
Facility; then, the representations and warranties set forth in §6, the
affirmative covenants set forth in §7, the negative covenants set forth in §8,
the financial covenants set forth in §9 and/or the events of default set forth
in §12 (and, in each case, the related definitions), as applicable, of this
Agreement shall be deemed to be amended automatically to conform with the
corresponding terms of the New Revolver Facility (each, a “Modification”);
provided that (w) no Modification made pursuant to this paragraph that would
result in the Lenders being treated differently than the lenders under the New
Revolver Facility, shall be made pursuant to this paragraph without the prior
written consent of the Required Lenders hereunder, (x) all Lenders shall have
received notice of any such proposed Modifications and of the New Revolver
Facility, (y) no Modifications of the New Revolver Facility shall result in any
corresponding amendment, modification, restatement, replacement or waiver of
§12.1(a) or (b), and (z) if requested by the Borrower or the Agent, the
Borrower, the Guarantors, the Agent and each Lender shall execute and deliver a
written amendment to, restatement of, or waiver under, as applicable, this
Agreement memorializing the Modifications.

 

§28. SEVERABILITY.

The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.

 

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§29. TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant, agreement and
obligation of the Borrower and the Guarantors under this Agreement and the other
Loan Documents.

 

§30. NO UNWRITTEN AGREEMENTS.

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH
BELOW.

 

§31. REPLACEMENT NOTES.

Upon receipt of evidence reasonably satisfactory to the Borrower of the loss,
theft, destruction or mutilation of any Note, and in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Borrower or, in the case of any such mutilation, upon
surrender and cancellation of the applicable Note, the Borrower will execute and
deliver, in lieu thereof, a replacement Note, identical in form and substance to
the applicable Note and dated as of the date of the applicable Note and upon
such execution and delivery all references in the Loan Documents to such Note
shall be deemed to refer to such replacement Note.

 

§32. NO THIRD PARTIES BENEFITED.

This Agreement and the other Loan Documents are made and entered into for the
sole protection and legal benefit of the Borrower, the Guarantors, the Lenders,
the Agent and their permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents. All conditions to the performance of the obligations of the
Agent and the Lenders under this Agreement, including the obligation to make
Loans, are imposed solely and exclusively for the benefit of the Agent and the
Lenders and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that the
Agent and the Lenders will refuse to make Loans in the absence of strict
compliance with any or all thereof and no other Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any and all of
which may be freely waived in whole or in part by the Agent and the Lenders at
any time if in their sole discretion they deem it desirable to do so. In
particular, the Agent and the Lenders make no representations and assume no
obligations as to third parties concerning the quality of the construction by
the Borrower, the Guarantors or any of their Subsidiaries of any development or
the absence therefrom of defects.

 

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§33. PATRIOT ACT.

Each Lender and the Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower and the Guarantors that, pursuant to the requirements of
the Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower and the Guarantors, which information includes names and
addresses and other information that will allow such Lender or the Agent, as
applicable, to identify the Borrower and the Guarantors in accordance with the
Patriot Act.

 

§34. JOINT AND SEVERAL LIABILITY.

Each of the Borrower and the Guarantors covenants and agrees that each and every
covenant and obligation of the Borrower or any Guarantor hereunder and under the
other Loan Documents to which each is a party shall be the joint and several
obligations of the Borrower and each Guarantor.

[signatures on next page]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed under seal by its duly authorized representatives as of the date first
set forth above.

 

BORROWER: MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership By:  
Mid-America Apartment Communities, Inc., a Tennessee corporation, its sole
general partner   By:  

/s/ Al Campbell

  Name:   Al Campbell   Title:   EVP, CFO

 

 

 

 

 

 

[Signature Page to Term Loan Agreement - JPMorgan/Mid-America 2013]

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AGENT AND LENDERS:

JPMORGAN CHASE BANK, N.A.,

individually and as Agent

By:  

/s/ Brendan Poe

Name:   Brendan Poe Title:   Executive Director

 

 

 

 

 

 

[Signature Page to Term Loan Agreement - JPMorgan/Mid-America 2013]