EXHIBIT
10.20


THIRD AMENDED AND
RESTATED

MASTER CREDIT FACILITY AGREEMENT

(MAA I)


THIS THIRD AMENDED AND RESTATED MASTER CREDIT FACILITY
AGREEMENT is made as of the 30th day of March, 2004, by and among
(i) (a) MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee corporation (the “REIT”), (b) MID-AMERICA
APARTMENTS,
L.P., a Tennessee limited partnership (“OP”);
the REIT and OP being collectively referred to as the “Borrower”), (c) MID-AMERICA APARTMENTS
OF TEXAS, L.P., a Texas limited partnership (“MAA of Texas”; MAA of Texas and Borrower being
collectively referred to as the “Borrower
Parties”) and (ii) PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a
Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower Parties, Paddock Club Brandon, a Limited Partnership, a Georgia
limited partnership, Paddock Club Columbia, a Limited Partnership, a Georgia
limited partnership, Paddock Park Ocala II, a Limited Partnership, a Georgia
limited partnership, Paddock Club Tallahassee, a Limited Partnership, a Georgia
limited partnership, and Lender entered into that certain Master Credit
Facility Agreement dated as of November 10, 1999 (the “Original Agreement”), pursuant to which
the Lender agreed to make credit available to the Borrower under the terms and
conditions set forth in the Original Agreement.


          B.          Pursuant
to various amendments to the Original Agreement, among other things (i) MAA of
Texas became a Guarantor under the Original Agreement and (ii) various
Mortgaged Properties (each capitalized term used but not defined has the
meaning ascribed to such term in Article I of this Agreement) were added to the
Collateral Pool.  Pursuant to Articles
of Merger effective December 31, 1999, certain entities that were or had become
Borrower Parties under the Original Agreement merged with and into OP, with OP
as the surviving entity.  


          C.          The
Borrower Parties amended and restated the Original Agreement in its entirety as
set forth in that certain Amended and Restated Master Credit Facility Agreement
dated as of August 22, 2002 (the “First
Amended and Restated Agreement”).


          D.          The
Borrower Parties amended and restated the First Amended and Restated Agreement
in its entirety as set forth in that certain Second Amended and Restated Master
Credit Facility Agreement dated as of December 10, 2003 (the “Second Amended and Restated
Agreement”).


          E.          The
Borrower Parties have requested that various terms and conditions of the Second
Amended and Restated Agreement be modified.
The Borrower Parties and the Lender now wish to amend and restate the
Second Amended and Restated Agreement in its entirety.






          F.          The
REIT owns directly and indirectly 85% of the voting interests in OP.  The REIT owns, directly or indirectly, 100%
of the ownership interest in MAA of Texas.



          G.          The
Borrower Parties own one or more Multifamily Residential Properties as more
particularly described in Exhibit A to this Agreement.


          H.          Pursuant
to the First Amended and Restated Agreement, the Lender established a
$119,367,000 credit facility, comprised of a $110,000,000 Fixed Facility
Commitment and a $9,367,000 Variable Facility Commitment.  


          I.          Pursuant
to various amendments to the First Amended and Restated Agreement, the Lender
increased the Credit Facility to $159,507,000, consisting of a $110,000,000
Fixed Facility Commitment and a $49,507,000 Variable Facility Commitment. 


          J.          Pursuant
to the Second Amended and Restated Agreement, the Lender agreed that the Credit
Facility may be increased to an amount not to exceed $193,000,000.


          K.          The
Borrower Parties and Lender wish to further increase the amount to which the
Credit Facility may be expanded subject to the rights of Borrower to elect to
increase the Fixed Facility Commitment and Variable Facility Commitment in
accordance with Article VIII hereof.  


          L.          To
secure the obligations of the Borrower Parties under this Agreement and the
other Loan Documents issued in connection with the Credit Facility, the
Borrower Parties have created a Collateral Pool in favor of the Lender.  The Collateral Pool is comprised of (i)
Security Instruments on certain Multifamily Residential Properties owned by the
Borrower Parties and (ii) any other Security Documents executed by any Borrower
Party pursuant to this Agreement or any other Loan Documents.


          M.          Each
of the Security Documents shall be cross-defaulted (i.e., a default under any
Security Document, or under this Agreement, shall constitute a default under
each Security Document, and this Agreement) and cross-collateralized (i.e.,
each Security Instrument shall secure all of the Borrower Parties’ obligations
under this Agreement and the other Loan Documents issued in connection with the
Credit Facility) and it is the intent of the parties to this Agreement that the
Lender may accelerate any Note without the necessity to accelerate any other
Note and that in the exercise of its rights and remedies under the Loan
Documents, Lender may, except as provided in this Agreement, exercise and
perfect any and all of its rights in and under the Loan Documents with regard
to any Mortgaged Property without the necessity to exercise and perfect its
rights and remedies with respect to any other Mortgaged Property and that any
such exercise shall be without regard to the Allocable Facility Amount assigned
to such Mortgaged Property and that Lender may recover an amount equal to the
full amount outstanding in respect of any of the Notes in connection with such
exercise and any such amount shall be applied as determined by Lender in its
sole and absolute discretion.


          N.          Subject
to the terms, conditions and limitations of this Agreement, the Lender has
agreed to establish the Credit Facility.


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          NOW,
THEREFORE, the Borrower Parties and the Lender, in consideration of the mutual
promises and agreements contained in this Agreement, hereby agree to amend and
restate, in its entirety, the First Amended and Restated Agreement as follows:


ARTICLE I

DEFINITIONS


For all purposes of this Agreement, the following
terms shall have the respective meanings set forth below:


	
 

	
 


	
 

	
          “Acquiring
  Person” means a “person” or “group of persons” within the meaning of
  Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended.


	
 

	
 


	
 

	
          “Additional
  Collateral Due Diligence Fees” shall have the meaning set forth in
  Section 16.03(b).


	
 

	
 


	
 

	
          “Additional
  Mortgaged Properties” means each Multifamily Residential Property owned
  by any Borrower Party (either in fee simple or as tenant under a ground lease
  meeting all of the requirements of the DUS Guide) and added to the Collateral
  Pool after the Initial Closing Date pursuant to Article VI of this Agreement.


	
 

	
 


	
 

	
          “Advance”
  means a Variable Advance or a Fixed Facility Advance.


	
 

	
 


	
 

	
          “Advance
  Confirmation Instrument” shall have the meaning set forth in Section
  4.02.


	
 

	
 


	
 

	
          “Affiliate”
  means, as applied to any Person, any other Person directly or indirectly
  controlling, controlled by, or under common control with, that Person.  For the 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 the possession, directly or indirectly, of the power to direct or cause
  the direction of the management (other than property management) and policies
  of that Person, whether through the ownership of voting securities,
  partnership interests or by contract or otherwise.


	
 

	
 


	
 

	
          “Aggregate
  Debt Service Coverage Ratio for the Trailing 12 Month Period” means, for
  any specified date, the ratio (expressed as a percentage) of--








	
 

	
 


	
 

	
(a)          the
  aggregate of the Net Operating Income for the Trailing 12 Month Period for
  the Mortgaged Properties


	
 

	
 


	
to




	
 

	
(b)          the
  Facility Debt Service on the specified date.








	
 

	
 


	
 

	
          “Aggregate
  Loan to Value Ratio” means, for any specified date, the ratio (expressed
  as a percentage) of--





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(a)

	
the Advances Outstanding on the specified date,


	

to




	
 

	
(b)

	
 the aggregate of the Valuations most recently obtained prior to the specified
  date for all of the Mortgaged Properties.








	
 

	
 


	
 

	
          “Agreement”
  means this Master Credit Facility Agreement, as it may be amended,
  supplemented or otherwise modified from time to time, including all Recitals
  and Exhibits to this Agreement, each of which is hereby incorporated into
  this Agreement by this reference.


	
 

	
 


	
 

	
          “Allocable
  Facility Amount” means the portion of the Credit Facility allocated to a
  particular Mortgaged Property by Lender in accordance with this Agreement.


	
 

	
 


	
 

	
          “Amended
  and Restated Commitment” means the portion of the Commitment in excess of
  $138,382,000.  Any portion of the
  Commitment above $138,382,000 shall be deemed to be part of the Amended and
  Restated Commitment.


	
 

	
 


	
 

	
          “Amended
  and Restated Variable Facility Commitment” means the portion of the
  Variable Facility Commitment in excess of $28,382,000.


	
 

	
 


	
 

	
          “Amortization
  Period” means, with respect to each Fixed Facility Advance, the period of
  not less than 25 years and not more than 30 years.


	
 

	
 


	
 

	
          “Applicable
  Law” means (a) all applicable provisions of all constitutions, statutes,
  rules, regulations and orders of all governmental bodies, all Governmental
  Approvals and all orders, judgments and decrees of all courts and
  arbitrators, (b) all zoning, building, environmental and other laws,
  ordinances, rules, regulations and restrictions of any Governmental Authority
  affecting the ownership, management, use, operation, maintenance or repair of
  any Mortgaged Property, including the Americans with Disabilities Act (if
  applicable), the Fair Housing Amendment Act of 1988 and Hazardous Materials
  Laws, (c) any building permits or any conditions, easements, rights-of-way,
  covenants, restrictions of record or any recorded or unrecorded agreement
  affecting or concerning any Mortgaged Property including planned development
  permits, condominium declarations, and reciprocal easement and regulatory
  agreements with any Governmental Authority, (d) all laws, ordinances, rules
  and regulations, whether in the form of rent control, rent stabilization or
  otherwise, that limit or impose conditions on the amount of rent that may be
  collected from the units of any Mortgaged Property, and (e) requirements of
  insurance companies or similar organizations, affecting the operation or use
  of any Mortgaged Property or the consummation of the transactions to be
  effected by this Agreement or any of the other Loan Documents.


	
 

	
 


	
 

	
          “Appraisal”
  means an appraisal of a Multifamily Residential Property or Multifamily
  Residential Properties conforming to the requirements of Chapter 5 of Part
  III of the DUS Guide, and accepted by the Lender.


	
 

	
 


	
 

	
          “Appraised
  Value” means the value set forth in an Appraisal.





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          “Borrower”
  means, individually and collectively, the REIT and OP.


	
 

	
 


	
 

	
          “Borrower
  Parties” means, individually and collectively, the Borrower and the
  Guarantor.


	
 

	
 


	
 

	
          “Business
  Day” means a day on which Fannie Mae is open for business.


	
 

	
 


	
 

	
          “Calendar
  Quarter” means, with respect to any year, any of the following three
  month periods:  (a)
  January-February-March; (b) April-May-June; (c) July-August-September; and
  (d) October-November-December.


	
 

	
 


	
 

	
          “Cap”
  means an interest rate cap provided pursuant to, and satisfying the
  requirements of, Article XXI.


	
 

	
 


	
 

	
          “Cap
  Rate” means, for each Mortgaged Property, a capitalization rate
  reasonably selected by the Lender for use in determining the Valuations, as
  disclosed to the Borrower Parties from time to time.


	
 

	
 


	
 

	
          “Change of Control” means the earliest to
  occur of: (a) the date on which the REIT ceases for any reason whatsoever to
  be the sole general partner or managing member of any other Borrower Party or
  ceases to own, directly or indirectly, 100% of the sole general partner or
  managing member of any other Borrower Party, or (b) the date on which the
  REIT or OP shall cease for any reason to be the holder of at least 75% of the
  voting interest of the other Borrower Parties or to own at least 40% of the
  equity, profits or other limited partnership interests in, or Voting Equity
  Capital (or any other Securities or ownership interests) of the other
  Borrower Parties, or (c) the date on which an Acquiring Person becomes (by
  acquisition, consolidation, merger or otherwise), directly or indirectly, the
  beneficial owner of more than 25% of the total Voting Equity Capital (or of
  any other Securities or ownership interest) of any Borrower Party then
  outstanding, or (d) the replacement (other than solely by reason of
  retirement at age sixty-five or older, death or disability) of more than 50%
  (or such lesser percentage as is required for decision-making by the board of
  directors or an equivalent governing body) of the members of the board of
  directors or an equivalent governing body) of the REIT or OP over a one-year
  period from the directors who constituted such board of directors at the
  beginning of such period and such replacement shall not have been approved by
  a vote of at least a majority of the board of directors of the REIT or OP
  then still in office who either were members of such board of directors at
  the beginning of such one-year period or whose election as members of the
  board of directors was previously so approved (it being understood and agreed
  that in the case of any entity governed by a trustee, board of managers, or
  other similar governing body, the foregoing clause (d) shall apply thereto by
  substituting such governing body and the members thereof for the board of
  directors and members thereof, respectively).


	
 

	
 


	
 

	
          “Closing Date” means the Initial Closing
  Date, and each date thereafter on which the funding or other transaction
  requested in a Request is required to take place.





- 5 -







	
 

	
 


	
 

	
          “Collateral”
  means, the Mortgaged Properties and other collateral from time to time or at
  any time encumbered by the Security Instruments, or any other property
  securing any of the Borrower Parties’ obligations under the Loan Documents.


	
 

	
 


	
 

	
          “Collateral
  Addition Fee” means, with respect to each Additional Mortgaged Property
  added to the Collateral Pool in accordance with Article VI --


	
 

	
 


	
 

	
                    (i)
     65 basis points, multiplied by


	
 

	
 


	
 

	
                    (ii)
   Allocable Facility Amount of the Additional Mortgaged Property, as determined
  by the Lender; provided however, if a Collateral Addition Property is added
  to the Collateral Pool in conjunction with such Mortgaged Property being
  released from the collateral pool under the Other Credit Agreement, the
  Collateral Addition Fee shall be waived for the aggregate of the first six
  (6) transactions which are either Mortgaged Properties transferred from the
  Collateral Pool under this Agreement to the collateral pool under the Other
  Credit Agreement, or Mortgaged Properties transferred from the collateral pool
  under the Other Credit Agreement to the Collateral Pool under this Agreement.


	
 

	
 


	
 

	
          “Collateral
  Addition Loan Documents” means the Security Instrument covering an
  Additional Mortgaged Property and any other documents, instruments or
  certificates required by the Lender in connection with the addition of the
  Additional Mortgaged Property to the Collateral Pool pursuant to Article VI.


	
 

	
 


	
 

	
          “Collateral
  Addition Request” shall have the meaning set forth in Section 6.02(a).


	
 

	
 


	
 

	
          “Collateral
  Pool” means the aggregate total of the Collateral.


	
 

	
 


	
 

	
          “Collateral
  Release Property” shall have the meaning set forth in Section 7.02(a).


	
 

	
 


	
 

	
          “Collateral
  Release Request” shall have the meaning set forth in Section 7.02(a).


	
 

	
 


	
 

	
          “Collateral
  Substitution Fee” means, with respect to any substitution effected in
  accordance with Section 7.04, a fee equal to 65 basis points multiplied by
  the Allocable Facility Amount of the Substituted Mortgage Property added to
  the Collateral Pool; provided however, if a Substituted Mortgaged Property is
  added to the Collateral Pool in conjunction with such Mortgaged Property
  being released from the collateral pool under the Other Credit Agreement, the
  Collateral Substitution Fee shall be waived for the aggregate of the first
  six (6) transactions which are either Mortgaged Properties transferred from
  the Collateral Pool under this Agreement to the collateral pool under the
  Other Credit Agreement, or Mortgaged Properties transferred from the
  collateral pool under the Other Credit Agreement to the Collateral Pool under
  this Agreement.


	
 

	
 


	
 

	
          “Commitment”
  means, at any time, the sum of the Fixed Facility Commitment and the Variable
  Facility Commitment.


	
 

	
 


	
 

	
          “Complete
  Fixed Facility Termination” shall have the meaning set forth in Section
  9.02(a).





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          “Complete
  Variable Facility Termination” shall have the meaning set forth in
  Section 9.02(a).


	
 

	
 


	
 

	
          “Compliance
  Certificate” means a certificate of the Borrower Parties in the form
  attached as Exhibit D to this Agreement.


	
 

	
 


	
 

	
          “Conversion
  Documents” has the meaning specified in Section 3.07(b).


	
 

	
 


	
 

	
          “Conversion
  Request” has the meaning specified in Section 3.07(a).


	
 

	
 


	
 

	
          “Coupon
  Rate” means, with respect to a Variable Advance, the imputed interest
  rate determined by the Lender pursuant to Section 2.05 for the Variable
  Advance and, with respect to a Fixed Facility Advance, the interest rate
  determined by the Lender pursuant to Section 3.05 for the Fixed Facility
  Advance.


	
 

	
 


	
 

	
          “Coverage
  and LTV Tests” mean, for any specified date, each of the following
  financial tests:


	
 

	
 


	
 

	
                    (a)
     The Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period is
  not less than 140%.


	
 

	
 


	
 

	
                    
  (b)     The Aggregate Loan to Value Ratio does not exceed 65%.


	
 

	
 


	
 

	
          “Credit
  Facility” means the Fixed Facility and the Variable Facility.


	
 

	
 


	
 

	
          “Credit
  Facility Expansion” means an increase in the Commitment made in
  accordance with Article VIII.


	
 

	
 


	
 

	
         
  “Credit Facility Expansion Loan Documents” means amendments to the
  Variable Facility Note or the Fixed Facility Note, as the case may be,
  increasing the amount of such Note to the amount of the Commitment, as
  expanded in accordance with Article VIII and amendments to the Security
  Instruments, increasing the amount secured by such Security Instruments to
  the amount of the Commitment.


	
 

	
 


	
 

	
          “Credit
  Facility Expansion Request” shall have the meaning set forth in Section
  8.02(a).


	
 

	
 


	
 

	
          “Credit
  Facility Termination Date” means December 1, 2013.


	
 

	
 


	
 

	
          “Credit
  Facility Termination Request” shall have the meaning set forth in Section
  10.02(a).


	
 

	
 


	
 

	
          “Debt
  Service Coverage Ratio” means, for any Mortgaged Property, for any
  specified date, the ratio (expressed as a percentage) of --








	
 

	
 


	
 

	
(a)          the
  aggregate of the Net Operating Income for the preceding 12 month period for
  the subject Mortgaged Property





- 7 -






	
 

	
 


	
to




	
 

	
(b)          the
  Facility Debt Service on the specified date, assuming, for the purpose of
  calculating the Facility Debt Service for this definition, that Advances
  Outstanding shall be the Allocable Facility Amount for the subject Mortgaged
  Property.








	
 

	
 


	
 

	
          “Discount”
  means, with respect to any Variable Advance, an amount equal to the excess of
  --


	
 

	
 


	
 

	
          (i)          the
  face amount of the MBS backed by the Variable Advance, over


	
 

	
 


	
 

	
          (ii)         the
  Price of the MBS backed by the Variable Advance.


	
 

	
 


	
 

	
          “DUS
  Guide” means the Fannie Mae Multifamily Delegated Underwriting and
  Servicing (DUS) Guide, as such Guide may be amended from time to time,
  including exhibits to the DUS Guide and amendments in the form of Lender
  Memos, Guide Updates and Guide Announcements (and, if such Guide is no longer
  used by Fannie Mae, the term “DUS Guide” as used in this Agreement means the
  Fannie Mae Multifamily Negotiated Transactions Guide, as such Guide may be
  amended from time to time, including amendments in the form of Lender Memos,
  Guide Updates and Guide Announcements).
  All references to specific articles and sections of, and exhibits to,
  the DUS Guide shall be deemed references to such articles, sections and
  exhibits as they may be amended, modified, updated, superseded, supplemented
  or replaced from time to time.


	
 

	
 


	
 

	
          “DUS
  Underwriting Requirements” means the overall underwriting requirements
  for Multifamily Residential Properties as set forth in the DUS Guide.


	
 

	
 


	
 

	
          “ERISA”
  means the Employee Retirement Income Security Act of 1974, as amended from
  time to time.


	
 

	
 


	
 

	
          
  “Event of Default” means any event defined to be an “Event of Default”
  under Article XVII.


	
 

	
 


	
 

	
          “Facility
  Debt Service” means, as of any specified date, the sum of:








	
 

	
 

	
 


	
 

	
(a)

	
the amount of interest and principal amortization,
  during the 12 month period immediately succeeding the specified date, with
  respect to the Advances Outstanding on the specified date, except that, for
  these purposes:








	
 

	
 

	
 


	
 

	
(i)

	
(A) with respect to Variable Advances (or portions
  thereof) that are not part of the Hedge Requirement Amount, each Variable
  Advance (or portion thereof) shall be deemed to require level monthly
  payments of principal and interest (at the Coupon Rate for the Variable
  Advance (or portion thereof)) in an amount necessary to fully amortize the
  original principal amount of the Variable Advance (or portion thereof) over a
  30-year period, with such


	
 

	
 

	
 





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amortization deemed to commence on the first day of
  the 12 month period; and


	
 

	
 

	
 


	
 

	
 

	
(B) with respect to Variable Advances (or portions
  thereof) that are part of the Hedge Requirement Amount (x) for which Borrower
  has obtained a Swap, each such Variable Advance (or portion thereof) shall be
  deemed to require level monthly payments of principal and interest at the
  Swap Rate in an amount necessary to fully amortize the original principal
  amount of the Variable Advance (or portion thereof) over a 30-year period,
  with such amortization deemed to commence on the first day of the 12 month
  period; or (y) for which Borrower has obtained a Cap, each such Variable
  Advance (or portion thereof) shall be deemed to require level monthly
  payments of principal and interest (at the lesser of the Coupon Rate and the
  stated price of the relevant Cap) in an amount necessary to fully amortize
  the original principal amount of the Variable Advance (or portion thereof)
  over a 30-year period, with such amortization deemed to commence on the first day of
  the 12 month period; and


	
 

	
 

	
 


	
 

	
(ii)

	
each Fixed Facility Advance shall require level
  monthly payments of principal and interest (at the Coupon Rate for the Fixed
  Facility Advance) in an amount necessary to fully amortize the original
  principal amount of the Fixed Facility Advance over a 30-year period, with
  such amortization to commence on the first day of the 12 month period; and








	
 

	
 

	
 


	
 

	
(b)

	
the amount of the Standby Fee and Rate Preservation
  Fee payable to the Lender pursuant to Section 16.01 during such 12 month
  period (assuming, for these purposes, that the Advances Outstanding
  throughout the 12 month period are always equal to the amount of Advances
  Outstanding on the specified date).








	
 

	
 


	
 

	
Exhibit E to this Agreement
  contains an example of the determination of the Facility Debt Service.


	
 

	
 


	
 

	
          “Facility
  Termination Fee” means, with respect to a reduction in either the
  Variable Facility Commitment or the Fixed Facility Commitment pursuant to
  Articles IX or X, an amount equal to the product obtained by multiplying--








	
 

	
 

	
 


	
 

	
(1)

	
the reduction in the Variable Facility Commitment
  and any undrawn portion of the Fixed Facility Commitment, by


	
 

	
 

	
 


	
 

	
(2)

	
18 basis points, by


	
 

	
 

	
 


	
 

	
(3)

	
the present value factor calculated using the
  following formula:





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1 - (1 + r)

	
-n


	
 

	 

	
 


	
 

	
 

	
r








	
 

	
 


	
 

	
[r = Yield Rate








	
 

	
 

	
 


	
 

	
n =

	
the number of years (counting any partial year as a
  full year) remaining between the Closing Date for the reduction in the
  Commitment and the Variable Facility Termination Date shown on the Summary of
  Credit Facility Structure.








	
 

	
 


	
 

	
The “Yield Rate” means the rate, determined as of
  the Initial Closing Date, on the U.S. Treasury security having a maturity
  closest to the Variable Facility Termination Date.]


	
 

	
 


	
 

	
          “Fannie
  Mae” means the federally-chartered and stockholder-owned corporation
  organized and existing under the Federal National Mortgage Association
  Charter Act, 12 U.S.C. § 1716 et seq.


	
 

	
 


	
 

	
          “Financial
  Covenants” means the covenants set forth in Article XV.


	
 

	
 


	
 

	
          “Fixed
  Facility” means the agreement of the Lender to make Fixed Facility
  Advances to the Borrower pursuant to Section 3.01.


	
 

	
 


	
 

	
          “Fixed
  Facility Advance” means a loan made by the Lender to the Borrower under
  the Fixed Facility Commitment.


	
 

	
 


	
 

	
          “Fixed
  Facility Availability Period” means the applicable fixed facility
  availability period shown on the Summary of Credit Facility Structure
  attached hereto.


	
 

	
 


	
 

	
          “Fixed
  Facility Commitment” means $110,000,000, plus such amount as the Borrower
  may elect to add to the Fixed Facility Commitment in accordance with Articles
  III or VIII.


	
 

	
 


	
 

	
          “Fixed
  Facility Fee” means the applicable fixed facility fee shown on the
  Summary of Credit Facility Structure as adjusted, if applicable, as set forth
  in Section 15.03 of this Agreement.


	
 

	
 


	
 

	
          “Fixed
  Facility Note” means a promissory note, in the form attached as Exhibit
  B to this Agreement, which will be issued by the Borrower to the Lender,
  concurrently with the funding of each Fixed Facility Advance, to evidence the
  Borrower’s obligation to repay the Fixed Facility Advance.


	
 

	
 


	
 

	
          “Future
  Advance” means an Advance made after the date hereof.


	
 

	
 


	
 

	
          “Future
  Advance Request” shall have the meaning set forth in Section 5.02.


	
 

	
 


	
 

	
          “GAAP”
  means generally accepted accounting principles in the United States in effect
  from time to time, consistently applied.


	
 

	
 


	
 

	
          “General
  Conditions” shall have the meaning set forth in Article XI.





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          “Geographical
  Diversification Requirements” means a requirement that the Collateral
  Pool consist of at least seven (7) Mortgaged Properties located in at least
  two (2) states and five (5) SMSA’s.


	
 

	
 


	
 

	
          
  “Governmental Approval” means an authorization, permit, consent,
  approval, license, registration or exemption from registration or filing
  with, or report to, any Governmental Authority.


	
 

	
 


	
 

	
          
  “Governmental Authority” means any court, board, agency, commission,
  office or authority of any nature whatsoever for any governmental unit
  (federal, state, county, district, municipal, city or otherwise) whether now
  or hereafter in existence.


	
 

	
 


	
 

	
          “Gross
  Revenues” means, for any specified period, with respect to any
  Multifamily Residential Property, all income in respect of such Multifamily
  Residential Property as reflected on the certified operating statement for
  such specified period as adjusted to exclude unusual income (e.g. temporary
  or nonrecurring income), income not allowed under DUS guidelines as shown in
  Section 403.02 of Part III of the DUS Guide (e.g. interest income, furniture
  income, etc.), and the value of any unreflected concessions.


	
 

	
 


	
 

	
          “Guarantor”
  means MAA of Texas.


	
 

	
 


	
 

	
          “Guaranty”
  means that certain Amended and Restated Guaranty executed by the Guarantor in
  the form attached as Exhibit FF to this Agreement.


	
 

	
 


	
 

	
          “Hazardous
  Materials”, with respect to any Mortgaged Property, shall have the
  meaning given that term in the Security Instrument encumbering the Mortgaged
  Property.


	
 

	
 


	
 

	
          “Hazardous
  Materials Law”, with respect to any Mortgaged Property, shall have the
  meaning given that term in the Security Instrument encumbering the Mortgaged
  Property.


	
 

	
 


	
 

	
          “Hazardous
  Substance Activity” means any storage, holding, existence, release,
  spill, leaking, pumping, pouring, injection, escaping, deposit, disposal,
  dispersal, leaching, migration, use, treatment, emission, discharge,
  generation, processing, abatement, removal, disposition, handling or
  transportation of any Hazardous Materials from, under, into or on any
  Mortgaged Property in violation of Hazardous Materials Laws, including the
  discharge of any Hazardous Materials emanating from any Mortgaged Property in
  violation of Hazardous Materials Laws through the air, soil, surface water,
  groundwater or property and also including the abandonment or disposal of any
  barrels, containers and other receptacles containing any Hazardous Materials
  from or on any Mortgaged Property in violation of Hazardous Materials Laws,
  in each case whether sudden or nonsudden, accidental or nonaccidental.


	
 

	
 


	
 

	
          “Hedge”
  means a Swap, a Cap or a combination of a Swap and a Cap, or another interest
  rate protection instrument satisfying the requirements of Article XXI.


	
 

	
 


	
 

	
          “Hedge
  Documents” has the meaning set forth in Section 21.02.





- 11 -






	
 

	
 


	
 

	
          “Hedge
  Requirement Amount” means the amount by which the Variable Facility
  Commitment exceeds, when added to the “Variable Facility Commitment” under
  the Other Credit Facility, $441,756,000.


	
 

	
 


	
 

	
          “Hedge
  Security Agreement” means, with respect to a Hedge, the Interest Rate
  Hedge Security, Pledge and Assignment Agreement between Borrower and Lender,
  for the benefit of Lender, in the form attached as Exhibit GG to this
  Agreement as such agreement may be amended, modified, supplemented or
  restated from time to time.


	
 

	
 


	
 

	
          “Impositions”
  means, with respect to any Mortgaged Property, all (1) water and sewer
  charges which, if not paid, may result in a lien on all or any part of the
  Mortgaged Property, (2) premiums for fire and other hazard insurance, rent
  loss insurance and such other insurance as Lender may require under any
  Security Instrument, (3) Taxes, and (4) amounts for other charges and
  expenses which Lender at any time reasonably deems necessary to protect the
  Mortgaged Property, to prevent the imposition of liens on the Mortgaged
  Property, or otherwise to protect Lender’s interests.


	
 

	
 


	
 

	
          “Indebtedness”
  means, with respect to any Person, as of any specified date, without
  duplication, all:


	
 

	
 


	
 

	
                    (a)
  indebtedness of such Person for borrowed money or for the deferred purchase
  price of property or services (other than (i) current trade liabilities incurred
  in the ordinary course of business and payable in accordance with customary
  practices, and (ii) for construction of improvements to property, if such
  person has a non-contingent contract to purchase such property);


	
 

	
 


	
 

	
                    (b)
  other indebtedness of such Person which is evidenced by a note, bond,
  debenture or similar instrument;


	
 

	
 


	
 

	
                    
  (c) obligations of such Person under any lease of property, real or personal,
  the obligations of the lessee in respect of which are required by GAAP to be
  capitalized on a balance sheet of the lessee or to be otherwise disclosed as
  such in a note to such balance sheet;


	
 

	
 


	
 

	
                    (d)
  obligations of such Person in respect of acceptances (as defined in Article 3
  of the Uniform Commercial Code of the District of Columbia) issued or created
  for the account of such Person;


	
 

	
 


	
 

	
                    (e)
  liabilities secured by any Lien on any property owned by such Person even
  though such Person has not assumed or otherwise become liable for the payment
  of such liabilities; and


	
 

	
 


	
 

	
                    (f)
  as to any Person (“guaranteeing person”), any obligation of (a) the
  guaranteeing person or (b) another Person (including any bank under any
  letter of credit) to induce the creation of a primary obligation (as defined
  below) with respect to which the guaranteeing person has issued a
  reimbursement, counterindemnity or similar obligation, in either case
  guaranteeing, or in effect guaranteeing, any indebtedness, lease,





- 12 -






	
 

	
 


	
 

	
dividend or other obligation (“primary
  obligations”) of any third person (“primary obligor”) in any
  manner, whether directly or indirectly, including any obligation of the
  guaranteeing person, whether or not contingent, to (1) purchase any such
  primary obligation or any property constituting direct or indirect security
  therefor, (2) advance or supply funds for the purchase or payment of any
  such primary obligation or to maintain working capital or equity capital of
  the primary obligor or otherwise to maintain the net worth or solvency of the
  primary obligor, (3) purchase property, securities or services primarily for
  the purpose of assuring the owner of any such primary obligation of the
  ability of the primary obligor to make payment of such primary obligation, or
  (4) otherwise assure or hold harmless the owner of any such primary
  obligation against loss in respect of the primary obligation, provided,
  however, that the term “Contingent Obligation” shall not include endorsements
  of instruments for deposit or collection in the ordinary course of
  business.  The amount of any
  Contingent Obligation of any guaranteeing person shall be deemed to be the
  lesser of (i) an amount equal to the stated or determinable amount of the primary
  obligation in respect of which such Contingent Obligation is made and (ii)
  the maximum amount for which such guaranteeing person may be liable pursuant
  to the terms of the instrument embodying such Contingent Obligation, unless
  such primary obligation and the maximum amount for which such guaranteeing
  person may be liable are not stated or determinable, in which case the amount
  of such Contingent Obligation shall be such guaranteeing person’s maximum
  reasonably anticipated liability in respect thereof as determined by Owner in
  good faith.


	
 

	
 


	
 

	
          “Initial
  Advance” means, collectively, the Variable Advance Outstanding on the
  date hereof in the principal amount of $49,507,000, and the Fixed Advances
  Outstanding on the date hereof in the aggregate principal amount of
  $110,000,000.  


	
 

	
 


	
 

	
          “Initial
  Closing Date” means November 10, 1999. 


	
 

	
 


	
 

	
          “Initial
  Commitment” means  the portion of
  the Commitment equal to or less than $119,367,000.  Any portion of the Commitment equal to or less than
  $119,367,000 shall be deemed to be part of the Initial Commitment. 


	
 

	
 


	
 

	
          “Initial
  Mortgaged Properties” means the Multifamily Residential Properties
  described on Exhibit A to this Agreement and which represent the Multifamily
  Residential Properties which comprise the Collateral Pool on the date hereof.


	
 

	
 


	
 

	
          “Initial
  Security Instruments” means the Security Instruments covering the Initial
  Mortgaged Properties.


	
 

	
 


	
 

	
          “Initial
  Valuation” means, when used with reference to specified Collateral, the
  Valuation initially performed for the Collateral as of the date on which the
  Collateral was added to the Collateral Pool as set forth in Exhibit A to this
  Agreement.


	
 

	
 


	
 

	
          “Insurance
  Policy” means, with respect to a Mortgaged Property, the insurance
  coverage and insurance certificates evidencing such insurance required to be
  maintained pursuant to the Security Instrument encumbering the Mortgaged
  Property.





- 13 -






	
 

	
 


	
 

	
          “Internal
  Revenue Code” means the Internal Revenue Code of 1986, as amended.  Each reference to the Internal Revenue
  Code shall be deemed to include (a) any successor internal revenue law and
  (b) the applicable regulations whether final, temporary or proposed.


	
 

	
 


	
 

	
          “Lease”
  means any lease, any sublease or subsublease, license, concession or other
  agreement (whether written or oral and whether now or hereafter in effect)
  pursuant to which any Person is granted a possessory interest in, or right to
  use or occupy all or any portion of any space in any Mortgaged Property, and
  every modification, amendment or other agreement relating to such lease,
  sublease, subsublease or other agreement entered into in connection with such
  lease, sublease, subsublease or other agreement, and every guarantee of the
  performance and observance of the covenants, conditions and agreements to be
  performed and observed by the other party thereto.


	
 

	
 


	
 

	
          “Lender”
  shall have the meaning set forth in the first paragraph of this Agreement,
  but shall refer to any replacement Lender if the initial Lender is replaced
  pursuant to the terms of Section 19.04.


	
 

	
 


	
 

	
          “Lien”
  means any mortgage, deed of trust, deed to secure debt, security interest or
  other lien or encumbrance (including both consensual and non-consensual liens
  and encumbrances).


	
 

	
 


	
 

	
          “Loan
  Documents” means this Agreement, the Notes, the Advance Confirmation
  Instruments for the Variable Advances, the Guaranty, the Security Documents,
  all documents executed by the Borrower Parties pursuant to the General
  Conditions set forth in Article XI of this Agreement and any other documents
  executed by a Borrower Party from time to time in connection with this
  Agreement or the transactions contemplated by this Agreement.


	
 

	
 


	
 

	
          “Loan
  to Value Ratio “ means, for a Mortgaged Property, for any specified date,
  the ratio (expressed as a percentage) of --


	
 

	
 








	
 

	
 


	
 

	
(a)     the Allocable Facility Amount of the subject
  Mortgaged Property on the specified date,


	
 

	
 


	
to


	
 

	
 


	
 

	
(b)     the Valuation most recently obtained prior to
  the specified date for the subject Mortgaged Property.








	
 

	
 


	
 

	
          “Loan
  Year” means the 12-month period from the first day of the first calendar
  month after the Initial Closing Date to and including the last day before the
  first anniversary of the Initial Closing Date, and each 12-month period
  thereafter.


	
 

	
 


	
 

	
          “Material
  Adverse Effect” means, with respect to any circumstance, act, condition
  or event of whatever nature (including any adverse determination in any
  litigation, arbitration, or governmental investigation or proceeding),
  whether singly or in conjunction with any other event or events, act or acts,
  condition or conditions, or





- 14 -






	
 

	
 


	
 

	
circumstance or circumstances, whether or not
  related, a material adverse change in or a materially adverse effect upon any
  of (a) the business, operations, property or condition (financial or
  otherwise) of any Borrower Party, (b) the present or future ability of any
  Borrower Party to perform the Obligations for which it is liable, (c) the
  validity, priority, perfection or enforceability of this Agreement or any
  other Loan Document or the rights or remedies of the Lender under any Loan
  Document, or (d) the value of, or the Lender’s ability to have recourse
  against, any Mortgaged Property.


	
 

	
 


	
 

	
          “MBS” means a mortgage-backed security which
  is “backed” by an interest in the Notes and the Collateral Pool securing the
  Notes, which interest permits the holder of the MBS to participate in the
  Notes and the Collateral Pool to the extent of such Advance.


	
 

	
 


	
 

	
          “MBS
  Imputed Interest Rate” shall have the meaning set forth in Section
  2.05(a).


	
 

	
 


	
 

	
          “MBS
  Issue Date” means the date on which a Fannie Mae MBS is issued by Fannie
  Mae.


	
 

	
 


	
 

	
          “MBS
  Delivery Date” means the date on which a Fannie Mae MBS is delivered by
  Fannie Mae.


	
 

	
 


	
 

	
          “MBS
  Pass-Through Rate” for a Fixed Facility Advance means the interest rate
  as determined by the Lender (rounded to three places) payable in respect of
  the Fannie Mae MBS issued pursuant to the MBS Commitment backed by the Fixed
  Facility Advance as determined in accordance with Section 4.01.


	
 

	
 


	
 

	
          “Mortgaged
  Properties” means, collectively, the Substituted Mortgaged Properties and
  the Initial Mortgaged Properties, but excluding each Collateral Release
  Property from and after the date of the release of the Collateral Release
  Property from the Collateral Pool.


	
 

	
 


	
 

	
          “Multifamily
  Residential Property” means a residential property, located in the United
  States, containing five or more dwelling units in which not more than twenty
  percent (20%) of the net rentable area is or will be rented to
  non-residential tenants, and conforming to the requirements of Chapter 2 of
  Part III of the DUS Guide (Property Requirements).


	
 

	
 


	
 

	
          “Net
  Operating Income” means, for any specified period, with respect to any
  Multifamily Residential Property, the aggregate net income during such period
  equal to Gross Revenues during such period less the aggregate Operating
  Expenses during such period.  If a
  Mortgaged Property is not owned by a Borrower Party or an Affiliate of a
  Borrower Party for the entire specified period, the Net Operating Income for
  the Mortgaged Property for the time within the specified period during which
  the Mortgaged Property was owned by a Borrower Party or an Affiliate of a
  Borrower Party shall be the Mortgaged Property’s pro forma net operating
  income determined by the Lender in accordance with the underwriting
  procedures set forth in Chapter 4 of
  Part III of the DUS Guide (Determination of Loan Amount).





- 15 -






	
 

	
 


	
 

	
          “Note”
  means any Fixed Facility Note or the Variable Facility Note.


	
 

	
 


	
 

	
          “Obligations”
  means the aggregate of the obligations of each of the Borrower Parties under
  this Agreement and the other Loan Documents.


	
 

	
 


	
 

	
          “Operating
  Expenses” means, for any period, with respect to any Multifamily
  Residential Property, all expenses in respect of the Multifamily Residential
  Property, as determined by the Lender based on the certified operating
  statement for such specified period as adjusted to provide for the following:
  (i) all appropriate types of expenses, including a management fee and
  deposits to the Replacement Reserves (whether funded or not), are included in
  the total operating expense figure; (ii) upward adjustments to individual
  line item expenses to reflect market norms or actual costs and correct any
  unusually low expense items, which could not be replicated by a different
  owner or manager (e.g., a market rate management fee will be included
  regardless of whether or not a management fee is charged, market rate payroll
  will be included regardless of whether shared payroll provides for economies,
  etc.); and (iii) downward adjustments to individual line item expenses to
  reflect unique or aberrant costs (e.g., non-recurring capital costs,
  non-operating borrower expenses, etc.).


	
 

	
 


	
 

	
          “Organizational
  Certificate” means a certificate of each of the Borrower Parties in the
  form attached as Exhibit F to this Agreement.


	
 

	
 


	
 

	
          “Organizational
  Documents” means all certificates, instruments and other documents
  pursuant to which an organization is organized or operates, including but not
  limited to, (i) with respect to a corporation, its articles of incorporation
  and bylaws, (ii) with respect to a limited partnership, its limited
  partnership certificate and partnership agreement, (iii) with respect to a
  general partnership or joint venture, its partnership or joint venture
  agreement and (iv) with respect to a limited liability company, its articles
  of organization and operating agreement.


	
 

	
 


	
 

	
          “Original
  Expansion Commitment” means the portion of the Commitment in excess of
  $119,367,000 but less than $138,382,000.
  Any portion of the Commitment in excess of $119,367,000 but less than
  $138,382,000 shall be deemed to be part of the Original Expansion Commitment.
  


	
 

	
 


	
 

	
          “Other
  Credit Agreement” means, that certain Second Amended and Restated Master
  Credit Facility Agreement dated as of even date herewith by and between
  Borrower, Lender and others.


	
 

	
 


	
 

	
          “Outstanding”
  means, when used in connection with promissory notes, other debt instruments
  or Advances, for a specified date, promissory notes or other debt instruments
  which have been issued, or Advances which have been made, but have not been
  repaid in full as of the specified date.


	
 

	
 


	
 

	
          “Ownership
  Interests” means, with respect to any entity, any ownership interests in
  the entity and any economic rights (such as a right to distributions, net
  cash flow or net income) to which the owner of such ownership interests is
  entitled.





- 16 -






	
 

	
 


	
 

	
          “PBGC”  means the Pension Benefit
Guaranty
  Corporation or any entity succeeding to any or all of its functions under
  ERISA.


	
 

	
 


	
 

	
          “Permits”
  means all permits, or similar licenses or approvals issued and/or required by
  an applicable Governmental Authority or any Applicable Law in connection with
  the ownership, use, occupancy, leasing, management, operation, repair,
  maintenance or rehabilitation of any Mortgaged Property or any Borrower
  Party’s business.


	
 

	
 


	
 

	
          “Permitted
  Liens” means, with respect to a Mortgaged Property, (i) the exceptions to
  title to the Mortgaged Property set forth in the Title Insurance Policy for
  the Mortgaged Property which are approved by the Lender, (ii) the Security
  Instrument encumbering the Mortgaged Property, (iii) any other Liens approved
  by the Lender, and (iv) Leases.


	
 

	
 


	
 

	
          “Person”
  means an individual, an estate, a trust, a corporation, a partnership, a
  limited liability company or any other organization or entity (whether
  governmental or private).


	
 

	
 


	
 

	
          “Potential
  Event of Default” means any event which, with the giving of notice or the
  passage of time, or both, would constitute an Event of Default.


	
 

	
 


	
 

	
          “Price”
  means, with respect to an Advance, the proceeds of the sale of the MBS backed
  by the Advance.


	
 

	
 


	
 

	
          “Property”
  means any estate or interest in any kind of property or asset, whether real,
  personal or mixed, and whether tangible or intangible.


	
 

	
 


	
 

	
          “Rate
  Confirmation Form” shall have the meaning set forth in Section 4.01(c).


	
 

	
 


	
 

	
          “Rate
  Preservation Fee” means, for any month following December 31, 2005, an
  amount equal to the product obtained by multiplying:  (i) 1/12, by (ii) 15 basis points, by (iii)
  the Reserved Amount.  The Rate
  Preservation Fee shall be paid monthly in arrears.


	
 

	
 


	
 

	
          “Rate
  Setting Date” shall have the meaning set forth in Section 4.01(b).


	
 

	
 


	
 

	
          “Rate
  Setting Form” shall have the meaning set forth in Section 4.01(b).


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          “Release
  Fee” means, with respect to each Mortgaged Property released from the
  Collateral Pool pursuant to Article VII, a fee equal to $15,000. Provided
  however, if a Collateral Release Property is released from the Collateral
  Pool in conjunction with such Mortgaged Property being added to the
  collateral pool under the Other Credit Agreement, the Release Fee shall be
  waived for the aggregate of the first three (3) transactions which are either
  Mortgaged Properties transferred from the Collateral Pool under this
  Agreement to the collateral pool under the Other Credit Agreement, or
  Mortgaged





- 17 -






	
 

	
 


	
 

	
Properties
  transferred from the collateral pool under the Other Credit Agreement to the
  Collateral Pool under this Agreement.


	
 

	
 


	
 

	
          “Release
  Price” shall have the meaning set forth in Section 7.02(c).


	
 

	
 


	
 

	
          “Rent
  Roll” means, with respect to any Multifamily Residential Property, a rent
  roll prepared and certified by the owner of the Multifamily Residential
  Property, on Fannie Mae Form 4243, as set forth in Exhibit III-3 of the DUS
  Guide, or on another form approved by the Lender and containing substantially
  the same information as Form 4243 requires.


	
 

	
 


	
 

	
          “Replacement
  Reserve Agreement” means a Replacement Reserve and Security Agreement,
  reasonably required by the Lender, and completed in accordance with the
  requirements of the DUS Guide.


	
 

	
 


	
 

	
          “Request”
  means a Collateral Addition Request, a Collateral Substitution Request, a
  Collateral Release Request, a Conversion Request, a Credit Facility Expansion
  Request, a Credit Facility Termination Request, a Future Advance Request, a
  Reborrowing Request or a Variable Facility Termination Request.


	
 

	
 


	
 

	
          “Reserved
  Amount” means $90,493,000, unless Borrower elects in writing a lesser
  amount not to exceed $250,000,000 minus the amount of the Commitment in
  effect at any time, but in no event greater than $90,493,000.  The Fixed Facility Fee and the Variable
  Facility Fee shall not increase with respect to the Reserved Amount in the
  event of an Expansion for so long as the Borrower timely pays the Rate
  Preservation Fee on the Reserved Amount.


	
 

	
 


	
 

	
          “Revolving
  Credit Endorsement” means an endorsement to a Title Insurance Policy
  which contains substantially the same coverages, and is subject to
  substantially the same or fewer exceptions (or such other exceptions as the
  Lender may approve), as the form attached as Exhibit H to this
  Agreement.


	
 

	
 


	
 

	
          “Security”
  means a “security” as set forth in Section 2(1) of the Securities Act of
  1933, as amended.


	
 

	
 


	
 

	
          “Security
  Documents” means the Security Instruments, the Hedge Security Agreement, the
  Replacement Reserve Agreements and any other documents executed by a Borrower
  Party from time to time to secure any of the Borrower Parties’ obligations
  under the Loan Documents.


	
 

	
 


	
 

	
          “Security
  Instrument” means, for each Mortgaged Property, a separate Multifamily
  Mortgage, Deed of Trust or Deed to Secure Debt, Assignment of Leases and
  Rents and Security Agreement given by a Borrower Party to or for the benefit
  of the Lender to secure the obligations of the Borrower Parties under the
  Loan Documents.  With respect to each
  Mortgaged Property owned by a Borrower Party, the Security Instrument shall
  be substantially in the form published by Fannie Mae for use in the state 





- 18 -






	
 

	
in which the Mortgaged Property is located.  The amount secured by the Security
  Instrument shall be equal to the Commitment in effect from time to time.


	
 

	
 


	
 

	
          “Senior
  Management” means (i) the Chief Executive Officer, Chairman of the Board,
  President, Chief Financial Officer and Chief Operating Officer of the REIT or
  OP and (ii) any other individuals with responsibility for any of the
  functions typically performed in a corporation by the officers described in
  clause (i).


	
 

	
 


	
 

	
          “Single-Purpose”
  means, with respect to a Person which is any form of partnership or
  corporation or limited liability company, that such Person at all times since
  its formation:








	
 

	
 

	
 


	
 

	
(i)

	
has been a duly formed and existing partnership,
  corporation or limited liability company, as the case may be;


	
 

	
 

	
 


	
 

	
(ii)

	
has been duly qualified in each jurisdiction in
  which such qualification was at such time necessary for the conduct of its
  business;


	
 

	
 

	
 


	
 

	
(iii)

	
has complied with the provisions of its
  organizational documents and the laws of its jurisdiction of formation in all
  respects;


	
 

	
 

	
 


	
 

	
(iv)

	
has observed all customary formalities regarding its
  partnership or corporate existence, as the case may be;


	
 

	
 

	
 


	
 

	
(v)

	
has accurately maintained its financial statements,
  accounting records and other partnership or corporate documents separate from
  those of any other Person;


	
 

	
 

	
 


	
 

	
(vi)

	
has not commingled its assets or funds with those of
  any other Person;


	
 

	
 

	
 


	
 

	
(vii)

	
has accurately maintained its own bank accounts and
  books and accounts separate from those of any other Person;


	
 

	
 

	
 


	
 

	
(viii)

	
has paid its own liabilities from its own separate
  assets;


	
 

	
 

	
 


	
 

	
(ix)

	
has identified itself in all dealings with creditors
  (other than trade creditors in the ordinary course of business and creditors
  for the construction of improvements to property on which such Person has a
  non-contingent contract to purchase such property) under its own name and as
  a separate and distinct entity;


	
 

	
 

	
 


	
 

	
(x)

	
has not identified itself as being a division or a
  part of any other Person;


	
 

	
 

	
 


	
 

	
(xi)

	
has not identified any other Person as being a
  division or a part of such Person;


	
 

	
 

	
 


	
 

	
(xii)

	
has been adequately capitalized in light of its
  contemplated business operations;





- 19 -






	
 

	
 

	
 


	
 

	
(xiii)

	
has not assumed, guaranteed or become obligated for
  the liabilities of any other Person (except in connection with the Credit
  Facility or the endorsement of negotiable instruments in the ordinary course
  of business) or held out its credit as being available to satisfy the
  obligations of any other Person;


	
 

	
 

	
 


	
 

	
(xiv)

	
has not acquired obligations or securities of any
  other Person;


	
 

	
 

	
 


	
 

	
(xv)

	
in relation to a Borrower Party, except for loans
  made in the ordinary course of business to Affiliates, has not made loans or
  advances to any other Person;


	
 

	
 

	
 


	
 

	
(xvi)

	
has not entered into and was not a party to any
  transaction with any Affiliate of such Person, except in the ordinary course
  of business and on terms which are no less favorable to such Person than
  would be obtained in a comparable arm’s-length transaction with an unrelated
  third party;


	
 

	
 

	
 


	
 

	
(xvii)

	
has conducted its own business in its own name;


	
 

	
 

	
 


	
 

	
(xviii)

	
has paid the salaries of its own employees, if any,
  and maintained a sufficient number of employees in light of its contemplated
  business operations;


	
 

	
 

	
 


	
 

	
(xix)

	
has allocated fairly and reasonably any overhead for
  shared office space;


	
 

	
 

	
 


	
 

	
(xx)

	
has not pledged its assets for the benefit of any
  other entity or made any loans or advances to any person or entity;


	
 

	
 

	
 


	
 

	
(xxi)

	
has not engaged in a non-exempt prohibited
  transaction described in Section 406 of ERISA or Section 4975 of the Internal
  Revenue Code;


	
 

	
 

	
 


	
 

	
(xxii)

	
has not acquired obligations or securities of its
  partners or Affiliates; and


	
 

	
 

	
 


	
 

	
(xxiii)

	
has corrected any known misunderstanding regarding
  its separate identity.








	
 

	
 


	
 

	
          “SMSA”
  means a “standard metropolitan statistical area,” as defined from time to
  time by the United States Office of Management and Budget.


	
 

	
 


	
 

	
          “Standby
  Fee” means, for any month, an amount equal to the sum obtained by adding
  the product of (i) 1/12, by (ii) the amount shown as the Standby Fee on the
  Summary of Credit Facility Structure, by (iii) the Unused Capacity.


	
 

	
 


	
 

	
          “Subsequent
  Hedge” has the meaning set forth in Section 21.01.


	
 

	
 


	
 

	
          “Subsidiary”
  means, when used with reference to a specified Person, (i) any Person that,
  directly or indirectly, through one or more intermediaries, is controlled by
  the specified Person, (ii) any Person of which the specified Person is,
  directly or indirectly, the owner of more than 50% of any voting class of
  Ownership Interests or (iii)





- 20 -






	
 

	
 


	
 

	
any Person (A) which is a partnership and (B)
  of which the specified Person is a general partner and owns more than 50% of
  the partnership interests.


	
 

	
 


	
 

	
          “Substituted
  Mortgaged Property” means each Multifamily Residential Property owned by
  any Borrower Party (either in fee simple or as tenant under a ground lease
  meeting all of the requirements of the DUS Guide) and added to the Collateral
  Pool after the date hereof in connection with substitution of Collateral as
  permitted by Section 7.04 of this Agreement.


	
 

	
 


	
 

	
          “Summary
  of Credit Facility Structure” means the summary of credit facility
  structure attached to this Agreement as Schedule I.


	
 

	
 


	
 

	
          “Surveys”
  means the as-built surveys of the Mortgaged Properties prepared in accordance
  with the requirements of Section 113 of the DUS Guide, or otherwise approved
  by the Lender.


	
 

	
 


	
 

	
          “Swap”
  means an interest rate swap provided pursuant to and satisfying the
  requirements of Article XXI of this Agreement.


	
 

	
 


	
 

	
          “Swap
  Rate” has the meaning set forth in Section 21.02.


	
 

	
 


	
 

	
          “Taxes”
  means all taxes, assessments, vault rentals and other charges, if any,
  general, special or otherwise, including all assessments for schools, public
  betterments and general or local improvements, which are levied, assessed or
  imposed by any public authority or quasi-public authority, and which, if not
  paid, will become a lien, on the Mortgaged Properties.


	
 

	
 


	
 

	
          “Term
  of this Agreement” shall be determined as provided in Section 23.10 to
  this Agreement.


	
 

	
 


	
 

	
          “Termination
  Date” means, at any time during which Fixed Facility Advances are
  Outstanding, the latest maturity date for any Fixed Facility Advance
  Outstanding, and, at any time during which Fixed Facility Advances are not
  Outstanding, the Variable Facility Termination Date.


	
 

	
 


	
 

	
          “Three
  Month LIBOR Rate” means the London interbank offered rate for three-month
  U.S. dollar deposits, as such rate is reported in The Wall Street
  Journal.  In the event that a rate is
  not published for Three-Month LIBOR, then the nearest equivalent duration
  London interbank offered rate for U.S. Dollar deposits shall be selected at
  Lender’s reasonable discretion.  If
  the publication of Three-Month LIBOR is discontinued, Lender shall determine
  such rate from another equivalent source selected by Lender in its reasonable
  discretion.


	
 

	
 


	
 

	
          “Tie-In
  Endorsement” means an endorsement to a Title Insurance Policy which contains
  substantially the same coverages, and is subject to substantially the same or
  fewer exceptions (or such other exceptions as the Lender may approve), as the
  form attached as Exhibit J to this Agreement.





- 21 -






	
 

	
 


	
 

	
          “Title
  Company” means Fidelity National Title Insurance Company of New York. 


	
 

	
 


	
 

	
          “Title
  Insurance Policies” means the mortgagee’s policies of title insurance
  issued by the Title Company from time to time relating to each of the
  Security Instruments, conforming to the requirements of Section 111 of the
  DUS Guide, together with such endorsements, coinsurance, reinsurance and
  direct access agreements with respect to such policies as the Lender may,
  from time to time, consider necessary or appropriate, whether or not required
  by the DUS Guide, including Revolving Credit Endorsements, if available, and
  Tie-In Endorsements, if available, and with a limit of liability under the
  policy (subject to the limitations contained in Sections 6(a)(i) and
  6(a)(iii) of the Stipulations and Conditions of the policy) equal to the
  Commitment.


	
 

	
 


	
 

	
          “Trailing
  12 Month Period” means, for any specified date, the 12 month period
  ending with the last day of the most recent Calendar Quarter for which
  financial statements have been delivered by the Borrower Party to the Lender
  pursuant to Sections 13.04(c) and (d).


	
 

	
 


	
 

	
          “Transfer”
  means (i) a sale, assignment, lease, pledge, transfer or other disposition
  (whether voluntary or by operation of law) of, or the granting or creating of
  a lien, encumbrance or security interest in, any estate, rights, title or
  interest in a Mortgaged Property, or any portion thereof, or (ii) a sale,
  assignment, pledge, transfer or other disposition of any interest in a
  Borrower Party other than to another Borrower Party, or (iii) the issuance or
  other creation of new ownership interests in a Borrower Party other than (a)
  sales of the stock of the REIT on the New York Stock Exchange or (b) private
  placements of ownership interests in a Borrower Party that do not result in a
  Change of Control or any other partnership, corporation, real estate
  investment trust or other entity that has a direct or indirect ownership
  interest in a Borrower Party, or (iv) a merger or consolidation of a Borrower
  Party into another entity or of another entity into a Borrower Party other
  than into another Borrower Party, or (v) the reconstitution of a Borrower
  Party from one type of entity to another type of entity, or (vi) the
  amendment, modification or any other change in the governing instrument or
  instruments of such Person which has the effect of changing the relative
  powers, rights, privileges, voting rights or economic interests of the
  ownership interests in such Person.
  “Transfer” does not include (i) a conveyance of the Mortgaged Property
  at a judicial or non-judicial foreclosure sale under any Security Instrument
  or (ii) the Mortgaged Property becoming part of a bankruptcy estate by
  operation of law under the United States Bankruptcy Code.


	
 

	
 


	
 

	
          “Unused
  Capacity” means, for any month, the sum of the daily average during such
  month of (i) the undrawn amount of the Variable Facility Commitment available
  under Article II of this Agreement for the making of Variable Advances plus
  (ii) the undrawn amount of the Fixed Facility Commitment available under
  Article III of this Agreement for the making of Fixed Facility Advances,
  without regard to any unclosed Requests or to the fact that a Request must
  satisfy conditions precedent.


	
 

	
 


	
 

	
          “Valuation”
  means, for any specified date, with respect to a Multifamily Residential
  Property, (a) if an Appraisal of the Multifamily Residential Property was
  more recently obtained than a Cap Rate for the Multifamily Residential
  Property, the








- 22 -













	
 

	
 

	
 


	
 

	
Appraised Value of such Multifamily Residential Property, or
  (b) if a Cap Rate for the Multifamily Residential Property was more recently
  obtained than an Appraisal of the Multifamily Residential Property, the value
  derived by dividing--




	
 

	
 

	
(i)         the Net Operating Income of such Multifamily Residential
  Property for the Trailing 12 Month Period, by


	
 

	
 

	
 


	
 

	
 

	
(ii)        the most recent Cap Rate determined by the Lender.








	
 

	
 


	
 

	
          Notwithstanding
  the foregoing, any Valuation for a Multifamily Residential Property
  calculated for a date occurring before the first anniversary of the date on
  which the Multifamily Residential Property becomes a part of the Collateral
  Pool shall equal the Appraised Value of such Multifamily Residential
  Property, unless the Lender determines that changed market or property conditions
  warrant that the value be determined as set forth in the preceding sentence.


	
 

	
 


	
 

	
          “Variable
  Advance” means a loan made by the Lender to the Borrower Parties under
  the Variable Facility Commitment.


	
 

	
 


	
 

	
          “Variable
  Facility” means the agreement of the Lender to make Advances to the
  Borrower Parties pursuant to Section 2.01.


	
 

	
 


	
 

	
          “Variable
  Facility Availability Period” means the period beginning on the Initial
  Closing Date and ending on the 90th day before the Variable Facility
  Termination Date.


	
 

	
 


	
 

	
          “Variable
  Facility Commitment” means an aggregate amount of $49,507,000, which
  shall be evidenced by the Variable Facility Note in the form attached hereto
  as Exhibit I, plus such amount as the Borrower may elect to add to the
  Variable Facility Commitment in accordance with Article VIII, and plus such
  amount as the Borrower may elect to reborrow in accordance with Section 2.08,
  less such amount as the Borrower may elect to convert from the Variable
  Facility Commitment to the Fixed Facility Commitment in accordance with
  Article III and less such amount by which the Borrower may elect to reduce
  the Variable Facility Commitment in accordance with Article IX.


	
 

	
 


	
 

	
          “Variable
  Facility Fee” means the applicable variable facility fee shown on  the Summary of Credit Facility Structure
  as adjusted, if applicable, as set forth in Section 15.03 of this Agreement.


	
 

	
 


	
 

	
          “Variable
  Facility Note” means, the promissory note, in the form attached as Exhibit
  I to this Agreement, which has been issued by the Borrower Parties to the
  Lender to evidence the Borrower Parties’ obligation to repay Variable
  Advances.


	
 

	
 


	
 

	
          “Variable
  Facility Termination Date” means the variable facility termination date
  shown on the Summary of Credit Facility Structure attached hereto.


	
 

	
 


	
 

	
          
  “Voting Equity Capital” means Securities or partnership interests of
  any class or classes, the holders of which are ordinarily, in the absence of
  contingencies, entitled to elect a majority of the board of directors (or
  Persons performing similar functions).


	
 

	
 





- 23 -








ARTICLE II

THE VARIABLE FACILITY COMMITMENT


SECTION 2.01  Variable
Facility Commitment.  Subject to the terms, conditions and
limitations of this Agreement, the Lender agrees to make Variable Advances to
the Borrower from time to time during the applicable Variable Facility
Availability Period.  The aggregate
unpaid principal balance of the Variable Advances Outstanding at any time shall
not exceed the Variable Facility Commitment.
Subject to the terms, conditions and limitations of this Agreement, the
Borrower may re-borrow any amounts under the Variable Facility which it has
previously borrowed and repaid under the Variable Facility.


SECTION 2.02  Requests
for Variable Advances.  The Borrower shall request a Variable
Advance by giving the Lender a Future Advance Request in accordance with
Section 5.02.


SECTION 2.03  Maturity
Date of Variable Advances.  Regardless of the date on which a Variable
Advance is made, the maturity date of each Variable Advance shall be a date
selected by the Borrower in its Request for the Variable Advance, which date
shall be the last day of a calendar month occurring:


	
   

  	
   

  
	
   

  	
            (a)          no
  earlier than the date which completes three full months after the Closing
  Date for the Variable Advance; and

  
	
   

  	
   

  
	
   

  	
            (b)          no
  later than the date which completes nine full months after the Closing Date
  for the Variable Advance.

  



For these purposes, a year shall be deemed to consist
of 12 30-day months.  For example, the
date which completes three full months after September 15 shall be December 15;
and the date which completes three full months after November 30 shall be
February 28.


SECTION 2.04  Interest
on Variable Facility Advances.


                    (a)          Discount.
 Each Variable Advance shall be a discount
loan.  The original stated principal
amount of a Variable Advance shall be the sum of the Price of the Variable
Advance and the Discount of the Variable Advance.  The Price and Discount of each Variable Advance shall be
determined in accordance with the procedures set out in Section 4.01.  The proceeds of the Variable Advance made
available by the Lender to the Borrower will equal the Price of the Variable
Advance.  The Borrower shall pay to the
Lender, in advance of the Lender making a Variable Advance requested by the
Borrower, the entire Discount for the Variable Advance.


                    (b)          Partial
Month Interest.  Notwithstanding
anything to the contrary in this Section, if a Variable Advance is not made on
the first day of a calendar month, and the MBS Issue Date for the MBS backed by
the Variable Advance is the first day of the month following the month in which
the Variable Advance is made, the Borrower shall pay interest on the original
stated principal amount of the Variable Advance for the partial month period
commencing on the Closing Date for the Variable Advance and ending on the last
day of the calendar month in which the Closing Date occurs, at a rate per annum
equal to the greater of (i) the Coupon Rate 


- 24 -






for the Variable Advance as determined in accordance
with Section 2.05(b) and (ii) a rate determined by the Lender, based on the
Lender’s cost of funds and approved in advance, in writing, by the Borrower,
pursuant to the procedures mutually agreed upon by the Borrower and the Lender.


                    (c)          Variable
Facility Fee.  In addition to paying
the Discount and the partial month interest, if any, the Borrower shall pay
monthly installments of the Variable Facility Fee to the Lender on account of
each Variable Advance over the whole number of calendar months the MBS backed
by the Variable Advance is to run from the MBS Issue Date to the maturity date
of the MBS.  The Variable Facility Fee
shall be payable in advance, in accordance with the terms of the Variable
Facility Note.  The first installment
shall be payable on or prior to the Closing Date for the Variable Advance and
shall apply to the first full calendar month of the MBS backed by the Variable
Advance.  Subsequent installments shall
be payable on the first day of each calendar month, commencing on the first day
of the second full calendar month of such MBS, until the maturity of such
MBS.  Each installment of the Variable
Facility Fee shall be in an amount equal to the product of multiplying (i) the Variable
Facility Fee, by (ii) the amount of the Variable Advance, by (iii) 1/12.


SECTION 2.05  Coupon
Rates for Variable Advances.  The Coupon Rate for a Variable Advance shall
be a rate, per annum, as follows:



                    (a)          The
Coupon Rate for a Variable Advance shall equal the sum of (i) an interest rate
as determined by the Lender pursuant to Section 4.01 of this Agreement (rounded
to three places) payable for the Fannie Mae MBS pursuant to the MBS Commitment
backed by the Variable Advance (“MBS Imputed Interest Rate”) and (ii)
the Variable Facility Fee. 


                    (b)          Notwithstanding
anything to the contrary in this Section, if a Variable Advance is not made on
the first day of a calendar month, and the MBS Issue Date for the MBS backed by
the Variable Advance is the first day of the month following the month in which
the Variable Advance is made, the Coupon Rate for such Variable Advance for
such period shall be the greater of (i) the rate for the Variable Advance
determined in accordance with subsection (a) of this Section and (ii) a rate
determined by the Lender, based on the Lender’s cost of funds, and approved in
advance, in writing, by the Borrower, pursuant to procedures mutually agreed
upon by the Borrower and the Lender.


SECTION 2.06  Variable
Facility Note.  The
obligation of the Borrower to repay the Variable Advances will be evidenced by
the Variable Facility Note.  The
Variable Facility Note shall be payable to the order of the Lender and shall be
made in the amount of the Variable Facility Commitment.


SECTION 2.07  [Intentionally
Deleted.]


SECTION 2.08  Reinstatement
of Variable Commitment Upon Maturity of Fixed Facility Advances.  If any Fixed Facility Advance matures prior
to the end of the Variable Facility Availability Period, Borrower may elect to
reborrow any or all of such maturing Fixed Facility Advance and to increase the
Variable Commitment by an amount equal to the amount desired to be reborrowed
by the Borrower on the following terms and conditions: 


- 25 -







	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Request. In order to reborrow all or a portion of a maturing Fixed
Facility Advance, the Borrower shall deliver a written request for such
reborrowing (the “Reborrowing Request”) to the Lender, in the form attached
as Exhibit Q hereto. 

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Closing. If none of the limitations contained in Section 2.09 are
violated, and all conditions contained in Section 2.10 are satisfied, the
Lender shall permit the requested reborrowing, at a Closing to be held at
offices designated by the Lender on the maturity date of the Fixed Facility
Advance to be reborrowed (or on such other date to which the Borrower and the
Lender may agree), by executing and delivering, at the sole cost and expense
of the Borrower, an amendment to this Agreement, in the form attached as Exhibit
R hereto, together with an amendment to each Security Document (if
required by the Lender) and other applicable Loan Documents, in form and
substance satisfactory to the Lender, reflecting the reborrowing. The documents and instruments referred to
in the preceding sentence are referred to in this Article as the “Reborrowing
Documents.” 

  



Section 2.09  Limitations
on Right to Reborrow.  The right of the Borrower to reborrow all or
a portion of a maturing Fixed Facility Advance is subject to the following
limitations: 


	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Closing Date.  The Closing Date shall occur during the
  Variable Facility Availability Period.

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Minimum Request.  Each Request for a reborrowing shall be in
  the minimum amount of $5,000,000.

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Limitation on Reborrowing.  In no event will a reborrowing of a Fixed
  Facility Advance be permitted if the Fixed Facility Advance is prepaid prior
  to its Maturity Date.

  



SECTION 2.10  Conditions
Precedent to Reborrowing.  The
reborrowing of all or a portion of a maturing Fixed Facility Advance is subject
to the satisfaction of the following conditions precedent : 


	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  After giving effect to the requested reborrowing,
  the Coverage and LTV Tests will be satisfied; 

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Payment by the Borrower in full of the maturing
  Fixed Facility Advance which the Borrower has designated for reborrowing, together
  with any other amounts due with respect to the repayment of such Fixed
  Facility Advance;

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  The receipt by the Lender of an endorsement to each
  Title Insurance Policy, amending the effective date of the Title Insurance
  Policy to the Closing Date and showing no additional exceptions to coverage
  other than the exceptions shown on the Initial Closing Date and other
  exceptions approved by the Lender;

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Receipt by the Lender of one or more counterparts of
  each Reborrowing Document, dated as of the Closing Date, signed by each of
  the parties (other than the Lender) who is a party to such Reborrowing
  Document; 

  



- 26 -







	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  In the event that Fannie Mae is no longer in the
  business of purchasing loans of the type and size of the loans evidenced by
  this Agreement without  requiring
  interest rate protection, the Borrower shall make arrangements for such
  interest rate protection.  Such
  protection shall be a Hedge satisfying the requirements of Article XXI with
  respect to any amounts reborrowed pursuant to Sections 2.08, 2.09 and 2.10 of
  this Agreement; and  

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  The satisfaction of all applicable General
  Conditions set forth in Article XI.

  



ARTICLE III

THE FIXED FACILITY COMMITMENT


SECTION 3.01  Fixed
Facility Commitment.  Subject to the terms, conditions and
limitations set forth in this Article, the Lender agrees to make Fixed Facility
Advances to the Borrower from time to time during the Fixed Facility Availability
Period.  The aggregate original
principal of the Fixed Facility Advances shall not exceed the Fixed Facility
Commitment.  The borrowing of a Fixed
Facility Advance shall permanently reduce the Fixed Facility Commitment by the
original principal amount of the Fixed Facility Advance.  The Borrower may not re-borrow any part of
the Fixed Facility Advance which it has previously borrowed and repaid,
provided, however, that a Fixed Facility Advance that matures prior to the end
of the Variable Facility Availability Period may be reborrowed as a Variable
Advance pursuant to the terms of Section 2.08 of this Agreement.


SECTION 3.02  Requests
for Fixed Facility Advances.  The Borrower shall request a Fixed Facility
Advance by giving the Lender a Future Advance Request in accordance with
Section 5.02, as applicable.


SECTION 3.03  Maturity
Date of Fixed Facility Advances; Amortization.  The maturity date of each Fixed Facility
Advance shall be the maturity date selected by the Borrower, provided that such
Maturity Date shall not be earlier than the date five (5) years after the date
of such Advance and shall not be later than December 1, 2013.  The principal of each Fixed Facility Advance
shall, at the election of the Borrower, which election shall be made at the
time of the first Conversion Request or Credit Facility Expansion Request
relating to a Fixed Facility Commitment (which election shall apply to all
Fixed Facility Advances) be amortized on a 30-year schedule or shall require
payments of interest only. 



SECTION 3.04  Interest
on Fixed Facility Advances.


                    (a)          Advances.
 Each Fixed Facility Advance shall bear
interest at a rate, per annum, equal to the sum of (i) the MBS Pass-Through
Rate determined for such Fixed Facility Advance and (ii) the Fixed Facility
Fee.


                    (b)          Partial
Month Interest.  Notwithstanding
anything to the contrary in this Section, if a Fixed Facility Advance is not
made on the first day of a calendar month, and the MBS Issue Date for the MBS
backed by the Fixed Facility Advance is the first day of the month following
the month in which the Fixed Facility Advance is made, the Borrower shall pay 


- 27 -






interest on the original stated principal amount of
the Fixed Facility Advance for the partial month period commencing on the
Closing Date for the Fixed Facility Advance and ending on the last day of the
calendar month in which the Closing Date occurs at a rate, per annum, equal to
the greater of (i) the interest rate for the Fixed Facility Advance described
in the first sentence of this Section and (ii) a rate determined by the Lender,
based on the Lender’s cost of funds, and approved in advance, in writing, by
the Borrower, pursuant to procedures mutually agreed upon by the Borrower and
the Lender.


SECTION 3.05  Coupon
Rates for Fixed Facility Advances.  The Coupon Rate for a Fixed Facility Advance
shall be the rate of interest applicable to such Fixed Facility Advance
pursuant to Section 3.04.


SECTION 3.06  Fixed
Facility Note.  The
obligation of the Borrower to repay a Fixed Facility Advance will be evidenced
by a Fixed Facility Note.  The Fixed
Facility Notes shall be payable to the order of the Lender and shall be made in
the original principal amount of each Fixed Facility Advance.


SECTION 3.07  Conversion
of Commitment from Variable Facility Commitment to Fixed Facility Commitment.  The Borrower shall have the
right, from time to time during the
Fixed Facility Availability Period, to convert all or a portion of a Variable
Facility Commitment to the Fixed Facility Commitment, in which event the
Variable Facility Commitment shall be reduced by, and the Fixed Facility
Commitment shall be increased by, the amount of the conversion.



          (a)          Request.
In order to convert all or a portion of the
Variable Facility Commitment to the Fixed Facility Commitment, the Borrower
shall deliver a written request for a conversion (“Conversion Request”)
to the Lender, in the form attached as Exhibit K to this Agreement. Each Conversion Request shall be
accompanied
by a designation of the amount of the conversion and a designation of any
Variable Advances Outstanding which will be prepaid on or before the Closing
Date for the conversion as required by Section 3.08(c). 



          (b)          Closing.
If none of the limitations contained in
Section 3.08 is violated, and all conditions contained in Section 3.09 are
satisfied, the Lender shall permit the requested conversion, at a closing to be
held at offices designated by the Lender on a Closing Date selected by the
Lender, and occurring within 30 Business Days after the Lender’s receipt of the
Conversion Request (or on such other date to which the Borrower and the Lender
may agree), by executing and delivering, all at the sole cost and expense of
the Borrower, an amendment to this Agreement, in the form attached as Exhibit
L to this Agreement, together with an amendment to each Security Document
and other applicable Loan Documents, in form and substance satisfactory to the
Lender, reflecting the change in the Fixed Facility Commitment and the Variable
Facility Commitment. The documents and
instruments referred to in the preceding sentence are referred to in this
Article as the “Conversion Documents.” 


SECTION 3.08  Limitations
on Right to Convert.  The right of the Borrower to convert all or
a portion of the Variable Facility Commitment to the Fixed Facility Commitment
is subject to the following limitations:


- 28 -






          (a)          Closing
Date.  The Closing Date shall occur
during the Fixed Facility Availability Period.


          (b)          Minimum
Request.  Each Request for a
conversion shall be in the minimum amount of $5,000,000.


          (c)          Obligation
to Prepay Variable Advances.  If,
after the conversion, the aggregate unpaid principal balance of all Variable
Advances Outstanding will exceed the Variable Facility Commitment, the Borrower
shall be obligated to prepay, as a condition precedent to the conversion, an
amount of Variable Advances Outstanding which is at least equal to the amount
of the excess.


SECTION 3.09  Conditions
Precedent to Conversion.  The conversion of all or a portion of the
Variable Facility Commitment to the Fixed Facility Commitment is subject to the
satisfaction of the following conditions precedent on or before the Closing
Date:


                    (a)          After
giving effect to the requested conversion, the Coverage and LTV Tests will be
satisfied;


                    (b)          Prepayment
by the Borrower in full of any Variable Advances Outstanding which the Borrower
has designated for payment, together with any associated prepayment premiums
and other amounts due with respect to the prepayment of such Variable Advances;


                    (c)          The
receipt by the Lender of an endorsement to each Title Insurance Policy,
amending the effective date of the Title Insurance Policy to the Closing Date
and showing no additional exceptions to coverage other than the exceptions
shown on the Initial Closing Date and other exceptions approved by the Lender;


                   
(d)          Receipt by the
Lender of one or more counterparts of each Conversion Document, dated as of the
Closing Date, signed by each of the parties (other than the Lender) who is a
party to such Conversion Document; and


                    (e)          The
satisfaction of all applicable General Conditions set forth in Article XI.


ARTICLE IV

RATE SETTING FOR THE ADVANCES


SECTION 4.01  Rate
Setting for an Advance.  Rates for an Advance shall be set in
accordance with the following procedures:


                    (a)          Preliminary,
Nonbinding Quote.  At the Borrower’s
request the Lender shall quote to the Borrower an estimate of the MBS
Pass-Through Rate (for a proposed Fixed Facility Advance) or MBS Imputed
Interest Rate (for a proposed Variable Advance) for a Fannie Mae MBS backed by
a proposed Advance.  The Lender’s quote
shall be based on (i) a solicitation of bids from institutional investors
selected by the Lender and (ii) the proposed terms


- 29 -






and amount of the Advance selected by the
Borrower.  The quote shall not be
binding upon the Lender.



                    (b)          Rate
Setting. If the Borrower satisfies
all of the conditions to the Lender’s obligation to make the Advance in
accordance with Article V, then the Borrower may propose a MBS Pass-Through
Rate (for a Fixed Facility Advance) or MBS Imputed Interest Rate (for a
Variable Advance) by submitting to the Lender by facsimile transmission a
completed and executed document, in the form attached as Exhibit M to
this Agreement (“Rate Setting Form”), before 1:00 p.m. Eastern Standard
Time on any Business Day (“Rate Setting Date”). The Rate Setting Form contains various
factual certifications required by the Lender and specifies:  


	
   

  	
   

  
	
   

  	
  
                  (i)
for a Variable Advance, the amount, term, MBS Issue Date, Variable Facility
Fee, the proposed maximum Coupon Rate (“Maximum Annual Coupon Rate”)
and Closing Date for the Advance; and 

  
	
   

  	
   

  
	
   

  	
                    (ii)
  for a Fixed Facility Advance, the amount, term, MBS Issue Date, Fixed
  Facility Fee, Maximum Annual Coupon Rate, Price (which will be in a range
  between 99-1/2 and 100-1/2), Yield Maintenance Period, Amortization Period,
  if applicable, interest only and Closing Date for the Advance.

  




                    (c)          Rate
Confirmation. Within one Business
Day after receipt of the completed and executed Rate Setting Form, the Lender
shall solicit bids from institutional investors selected by the Lender based on
the information in the Rate Setting Form and, provided the actual Coupon Rate
(if the low bid were accepted) would be at or below the Maximum Annual Coupon
Rate, shall obtain a commitment (“MBS Commitment”) for the purchase of a
Fannie Mae MBS having the bid terms described in the related Rate Setting Form,
and shall immediately deliver to the Borrower by facsimile transmission a
completed document, in the form attached as Exhibit N to this Agreement
(“Rate Confirmation Form”). The Rate Confirmation Form will confirm:  


	
   

  	
   

  
	
   

  	
                    (i)
  for a Variable Advance, the amount, term, MBS Issue Date, MBS Delivery Date,
  MBS Imputed Interest Rate, Variable Facility Fee, Coupon Rate, Discount,
  Price, and Closing Date for the Advance; and

  
	
   

  	
   

  
	
   

  	
                    (ii)
  for a Fixed Facility Advance, the amount, term, MBS Issue Date, MBS Delivery
  Date, MBS Pass-Through Rate, Fixed Facility Fee, Coupon Rate, Price, Yield
  Maintenance Period, Specified U.S. Treasury Security, Amortization Period and
  Closing Date for the Advance.

  



SECTION 4.02 Advance
Confirmation Instrument for Variable Advances. On or before the Closing Date for a Variable
Advance, the Borrower Parties execute and deliver to the Lender an instrument
(“Advance Confirmation Instrument”), in the form attached as Exhibit
O to this Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery
Date, MBS Imputed Interest Rate, Variable Facility Fee, Coupon Rate, Discount,
Price and Closing Date for the Advance, and the Borrower’s obligation to repay
the Advance in accordance with the terms of the Notes and this Agreement. Upon the funding of the Variable
Advance,
the Lender shall note  


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the date of funding in the appropriate space at the
foot of the Advance Confirmation Instrument and deliver a copy of the completed
Advance Confirmation Instrument to the Borrower.  The Lender’s failure to do so shall not invalidate the
Advance
Confirmation Instrument or otherwise affect in any way any obligation of the
Borrower to repay Variable Advances in accordance with the Advance Confirmation
Instrument, the Variable Facility Note or the other Loan Documents, but is
merely meant to facilitate evidencing the date of funding and to confirm that
the Advance Confirmation Instrument is not effective until the date of funding.


SECTION 4.03  Breakage
and other Costs.  In the event that the Lender obtains an MBS
Commitment and the Lender fails to fulfill the MBS Commitment because the
Advance is not made (for a reason other than the default of the Lender to make
the Advance), the Borrower shall pay all reasonable out-of-pocket costs payable
to the potential investor and other reasonable costs, fees and damages incurred
by the Lender in connection with its failure to fulfill the MBS
Commitment.  The Lender reserves the
right to require that the Borrower post a deposit at the time the MBS
Commitment is obtained.  The deposit
referred to in the preceding sentence shall be refundable to the Borrower upon
the delivery of the related MBS.


ARTICLE V

MAKING THE ADVANCES


SECTION 5.01  Initial
Advance .  The Lender has made the Initial
Advance.  


SECTION 5.02 Future
Advances. In order to obtain a Future Advance, the
Borrower may from time to time deliver a written request for a Future Advance
(“Future Advance Request”) to the Lender, in the form attached as Exhibit
P to this Agreement. Each Future
Advance Request shall be accompanied by (a) a designation of the amount of the
Future Advance requested, and (b) a designation of the maturity date of the
Advance. Each Future Advance Request
shall be in the minimum amount of $3,000,000.
If all conditions contained in Section 5.03 are satisfied, the Lender
shall make the requested Future Advance, at a closing to be held at offices
designated by the Lender on a Closing Date selected by the Lender, and
occurring on a date selected by the Borrower, which date shall be not more than
three (3) Business Days, after the Borrower’s receipt of the Rate Confirmation
Form (or on such other date to which the Borrower and the Lender may
agree). The Lender reserves the right
to require that the Borrower post a deposit at the time the MBS Commitment is
obtained as an additional condition to the Lender’s obligation to make the
Future Advance. The deposit referred to
in the preceding sentence shall be refundable to the Borrower upon the delivery
of the related MBS. 


SECTION 5.03  Conditions
Precedent to Future Advances.  The obligation of the Lender to make a
requested Future Advance is subject to the following conditions precedent:


                    (a)          The
receipt by the Lender of a Future Advance Request;


                    (b)          The
Lender has delivered the Rate Setting Form for the Future Advance to the
Borrower;


                    (c)          After
giving effect to the requested Future Advance, the Coverage and LTV Tests will
be satisfied;


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                    (d)          If
the Advance is a Fixed Facility Advance, delivery of a Fixed Facility Note,
duly executed by the Borrower, in the amount of the Advance, reflecting all of
the terms of the Fixed Facility Advance;


                    (e)          If
the Advance is a Variable Advance, delivery of the Advance Confirmation
Instrument, duly executed by the Borrower;


                    (f)          For
any Title Insurance Policy not containing a Revolving Credit Endorsement, the
receipt by the Lender of an endorsement to the Title Insurance Policy, amending
the effective date of the Title Insurance Policy to the Closing Date and
showing no additional exceptions to coverage other than the exceptions shown on
the Initial Closing Date, Permitted Liens and other exceptions approved by the
Lender;


                    (g)          If
the Advance is a Variable Advance, the receipt by the Lender of the first
installment of Variable Facility Fee for the Variable Advance and the entire
Discount for the Variable Advance payable by the Borrower pursuant to Section
2.04;


                    (h)          The
receipt by the Lender of all legal fees and expenses payable by the Borrower in
connection with the Future Advance pursuant to Section 16.04(b); and


                    (i)          If
the Advance is a Variable Advance requiring a Hedge pursuant to the terms of
Article XXI, receipt by Lender at least five (5) days prior to the Closing Date
for such Advance, of the confirmation of a Hedge commitment with respect to
such Advance;


                    (j)          If
applicable, receipt by Lender of Hedge Documents effective as of the Closing
Date;


                    (k)          The
satisfaction of all applicable General Conditions set forth in Article XI.


SECTION 5.04  Determination
of Allocable Facility Amount and Valuations.  Once each Calendar Quarter, within 20
Business Days after the Borrower has delivered to the Lender the reports
required in Section 13.04, the Lender shall determine the Aggregate Debt
Service Coverage Ratio for the Trailing 12 Month period and the Aggregate Loan
to Value Ratio.  If the Lender
reasonably decides that changed market or property conditions warrant, the
Lender may (i) request an Appraisal of the relevant Mortgaged Properties and/or
(ii) determine new Allocable Facility Amounts and Valuations at any other
times.  The Lender shall also
redetermine Allocable Facility Amounts as necessary to take account of any
addition, release or substitution of Collateral or other event which
invalidates the outstanding determinations.
The Lender shall determine Cap Rates when determining Valuations on the
basis of its internal survey and analysis of cap rates for comparable sales in
the vicinity of the Mortgaged Property, with such adjustments as the Lender
deems appropriate and shall not be obligated to use any information provided by
the Borrower.  The Lender shall promptly
disclose its determinations to the Borrower.
Until redetermined, the Allocable Facility Amounts and Valuations
determined by the Lender shall remain in effect.  In performing a Valuation of a Multifamily Residential Property
to be added to the Collateral Pool, the Lender shall be entitled to obtain an
Appraisal.  The Lender shall also have
the right to obtain an Appraisal in connection with the redetermination of 


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a Valuation of a Mortgaged Property, but only if the
Lender is unable to determine a Cap Rate for such Mortgaged Property and then
only if the Lender has not obtained an Appraisal for  such Mortgaged Property within the prior year.


ARTICLE VI

ADDITIONS OF COLLATERAL


SECTION 6.01  Right
to Add Collateral.
Subject to the terms and conditions of this Article, the Borrower shall
have the right, from time to time during the Term of this Agreement, to add
Additional Mortgaged Properties to the Collateral Pool in accordance with the
provisions of this Article.


SECTION 6.02  Procedure
for Adding Collateral.  The procedure for adding Collateral set
forth in this Section 6.02 shall apply to all additions of Collateral in
connection with this Agreement, including but not limited to additions of
Collateral in connection with substitutions of Collateral and expansion of the
Credit Facility.



                    (a)          Request.
The Borrower may, not more than eight (8)
times per Calendar Year, deliver a written request (the “Collateral Addition
Request”) to the Lender, in the form attached as Exhibit S to this
Agreement, to add one or more Additional Mortgaged Properties to the Collateral
Pool. Each Collateral Addition Request
shall be accompanied by the following: 



                                   (i)          The
information relating to the Additional Mortgaged Property required by the form
attached as Exhibit CC to this Agreement (the “Collateral Addition
Description Package”), as amended from time to time to include information
required under the DUS Guide; and 


                                   (ii)          The
payment of all Additional Collateral Due Diligence Fees pursuant to Section
16.03(b).


                    (b)          Additional
Information.  The Borrower shall
promptly deliver to the Lender any additional information concerning the
proposed Additional Mortgaged Property that the Lender may from time to time
reasonably request.


                    (c)          Underwriting.
 The Lender shall evaluate the proposed
Additional Mortgaged Property, and shall make underwriting determinations as to
the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and
the Aggregate Loan to Value Ratio applicable to the Collateral Pool, on the
basis of the lesser of (i) if purchased by the Borrower within 12 months of the
related Collateral Addition Request, the acquisition price of the proposed
Additional Mortgaged Property or (ii) a Valuation made with respect to the
proposed Additional Mortgaged Property, and otherwise in accordance with Fannie
Mae’s DUS Underwriting Requirements, including applicable underwriting
floors.  Within 30 days after receipt of
(i) the Collateral Addition Request for the proposed Additional Mortgaged
Property and (ii) all reports, certificates and documents set forth on Exhibit
S to this Agreement, including a zoning analysis undertaken in accordance
with Section 206 of the DUS Guide, the Lender shall notify the Borrower


- 33 -






whether or not it shall consent to the addition of the
proposed Additional Mortgaged Property to the Collateral Pool and, if it shall
so consent, shall set forth the Aggregate Debt Service Coverage Ratios for the
Trailing 12 Month Period and the Aggregate Loan to Value Ratio which it
estimates shall result from the addition of the proposed Additional Mortgaged Property
to the Collateral Pool.  If the Lender
declines to consent to the addition of the proposed Additional Mortgaged
Property to the Collateral Pool, the Lender shall include, in its notice, a
brief statement of the reasons for doing so. Within five Business Days after
receipt of the Lender’s notice that it shall consent to the addition of the
Additional Mortgaged Property to the Collateral Pool, the Borrower shall notify
the Lender whether or not it elects to cause the proposed Additional Mortgaged
Property to be added to the Collateral Pool.
If the Borrower fails to respond within the period of five Business
Days, it shall be conclusively deemed to have elected not to cause the proposed
Additional Mortgaged Property to be added to the Collateral Pool.


                    (d)          Closing.
 If, pursuant to subsection (c), the Lender
consents to the addition of the proposed Additional Mortgaged Property to the
Collateral Pool, the Borrower timely elects to cause the proposed Additional
Mortgaged Property to be added to the Collateral Pool and all conditions
contained in Section 6.03 are satisfied, the Lender shall permit the proposed
Additional Mortgaged Property to be added to the Collateral Pool, at a closing
to be held at offices designated by the Lender on a Closing Date selected by
the Lender, and occurring within 30 Business Days after the Lender’s receipt of
the Borrower’s election (or on such other date to which the Borrower and the
Lender may agree).


SECTION 6.03  Conditions
Precedent to Addition of an Additional Mortgaged Property to the Collateral
Pool.  The addition of an Additional Mortgaged
Property to the Collateral Pool on the Closing Date applicable to the
Additional Mortgaged Property is subject to the satisfaction of the following
conditions precedent:


                    (a)          The
proposed Additional Mortgaged Property has a Debt Service Coverage Ratio for
the Trailing 12 Month Period of not less than 140% and a Loan to Value Ratio of
not more than 65% and immediately after giving effect to the requested
addition, the Coverage and LTV Tests will be satisfied, and in the case of any
substitution effected pursuant to Section 7.04 of this Agreement, the Coverage
and LTV Tests are not adversely affected after giving effect to the proposed
substitution;


                    (b)          The
receipt by the Lender of the Collateral Addition Fee, except as provided in
Section 16.02(b), and all legal fees and expenses payable by the Borrower in
connection with the Collateral Addition pursuant to Section 16.04(b);


                    (c)          The
delivery to the Title Company, with fully executed instructions directing the
Title Company to file and/or record in all applicable jurisdictions, all
applicable Collateral Addition Loan Documents required by the Lender, including
duly executed and delivered original copies of any Security Instruments and
UCC-1 Financing Statements covering the portion of the Additional Mortgaged
Property comprised of personal property, and other appropriate documents, in
form and substance satisfactory to the Lender and in form proper for
recordation, as may be necessary in the opinion of the 


- 34 -






Lender to perfect the Lien created by the applicable
additional Security Instrument, and any other Collateral Addition Loan Document
creating a Lien in favor of the Lender, and the payment of all taxes, fees and
other charges payable in connection with such execution, delivery, recording
and filing;


                  
(d)          If required by
the Lender, amendments to the Notes and the Security Instruments, reflecting
the addition of the Additional Mortgaged Property to the Collateral Pool and,
as to any Security Instrument so amended, the receipt by the Lender of an
endorsement to the Title Insurance Policy insuring the Security Instrument,
amending the effective date of the Title Insurance Policy to the Closing Date
and showing no additional exceptions to coverage other than the exceptions
shown on the Initial Closing Date, Permitted Liens and other exceptions
approved by the Lender;


                    (e)          If
the Title Insurance Policy for the Additional Mortgaged Property contains a
Tie-In Endorsement, an endorsement to each other Title Insurance Policy
containing a Tie-In Endorsement, adding a reference to the Additional Mortgaged
Property; and


                   
(f)          The satisfaction
of all applicable General Conditions set forth in Article XI.


ARTICLE VII

RELEASES OF COLLATERAL


SECTION 7.01  Right
to Obtain Releases of Collateral.  Subject to the terms and conditions of this
Article, the Borrower shall have the right to obtain a release of Collateral
from the Collateral Pool in accordance with the provisions of this Article.


SECTION 7.02  Procedure
for Obtaining Releases of Collateral.



                    (a)          Request.
In order to obtain a release of Collateral
from the Collateral Pool, the Borrower may, not more than once each calendar
month, deliver a written request for the release of Collateral from the
Collateral Pool (“Collateral Release Request”) to the Lender, in the
form attached as Exhibit T to this Agreement. The Collateral Release Request shall not result in a
termination
of all or any part of the Credit Facility.
The Borrower may only terminate all or any part of the Credit Facility
by delivering a Variable Facility Termination Request or Credit Facility
Termination Request pursuant to Articles IX or X. The Collateral Release Request shall be accompanied by (and
shall
not be effective unless it is accompanied by) the name, address and location of
the Mortgaged Property to be released from the Collateral Pool (“Collateral
Release Property”).  


                    (b)          Closing.
 If all conditions contained in Section 7.03
are satisfied, the Lender shall cause the Collateral Release Property to be
released from the Collateral Pool, at a closing to be held at offices
designated by the Lender on a Closing Date selected by the Lender, and
occurring within 30 days after the Lender’s receipt of the Collateral Release
Request (or on such other date to which the Borrower and the Lender may agree,
by executing and delivering, and causing all applicable parties to execute and
deliver, all at the sole cost and expense of the 


- 35 -






Borrower, instruments, in the form customarily used by
the Lender for releases in the jurisdiction governing the perfection of the
security interest being released, releasing the applicable Security Instrument
as a Lien on the Collateral Release Property, and UCC-3 Termination Statements
terminating the UCC-1 Financing Statements perfecting a Lien on the portion of
the Collateral Release Property comprised of personal property and such other
documents and instruments as the Borrower may reasonably request evidencing the
release of the applicable Collateral from any lien securing the Obligations
(including a termination of any restriction on the use of any accounts relating
to the Collateral Release Property) and the release and return to the Borrower
of any and all escrowed amounts relating thereto.  The instruments referred to in the preceding sentence are
referred to in this Article as the “Collateral Release Documents.”  The Borrower shall prepare
the Collateral
Release Documents and submit them to Lender for its review.


                    (c)          Release
Price.  The “Release Price”
for each Mortgaged Property means (1) during the period Section 22.01(a) of
this Agreement is in effect the greater of (i) the Allocable Facility Amount
for the Mortgaged Property to be released and (ii) the amount, if any, of
Advances Outstanding which are required to be repaid by the Borrower to the
Lender in connection with the proposed release of the Mortgaged Property from
the Collateral Pool, so that, immediately after the release, the Coverage and LTV
Tests will be satisfied and neither the Aggregate Debt Service Coverage Ratios
for the Trailing 12 Month Period will be reduced nor the Aggregate Loan to
Value Ratio for the Trailing 12 Month Period will be increased as a result of
such release and (2) at all times after Section 22.01(a) of this Agreement is
no longer in effect the greater of (i) 125% of the Allocable Facility Amount
for the Mortgaged Property to be released and (ii) the amount, if any, of
Advances Outstanding which are required to be repaid by the Borrower to the
Lender in connection with the proposed release of the Mortgaged Property from
the Collateral Pool, so that, immediately after the release, the Coverage and
LTV Tests will be satisfied and neither the Aggregate Debt Service Coverage
Ratios for the Trailing 12 Month Period will be reduced nor the Aggregate Loan
to Value Ratio for the Trailing 12 Month Period will be increased as a result
of such release.  In addition to the
Release Price, the Borrower shall pay to the Lender all associated prepayment
premiums and other amounts due under the Notes and any Advance Confirmation
Instruments evidencing the Advances being repaid.



                    (d)          Application
of Release Price. The Release Price
shall be applied against the Variable Advances Outstanding until there are no
further Variable Advances Outstanding, and thereafter shall be held by the
Lender (or its appointed collateral agent) as substituted Collateral (“Substituted
Cash Collateral”), in accordance with a security agreement and other
documents in form and substance acceptable to the Lender (or, at the Borrower’s
option, may be applied against the prepayment of Fixed Facility Advances, so
long as the prepayment is permitted under the Fixed Facility Note for the Fixed
Facility Advance). Any portion of the
Release Price held as Substituted Cash Collateral may be released if,
immediately after giving effect to the release, each of the conditions set
forth in Section 7.03(a) below shall have been satisfied. If, on the date on which the Borrower pays
the Release Price, Variable Advances are Outstanding but are not then due and
payable, the Lender shall hold the payments as additional Collateral for the
Credit Facility, until the next date on which Variable Advances are due and
payable, at which time the Lender shall apply the amounts held by it to the
amounts of the Variable Advances due and payable. 


- 36 -






SECTION 7.03  Conditions
Precedent to Release of Collateral Release Property from the Collateral.  The obligation of the Lender to
release a Collateral Release
Property from the Collateral Pool by executing and delivering the Collateral
Release Documents on the Closing Date, are subject to the satisfaction of the
following conditions precedent on or before the Closing Date:


                    (a)          Immediately
after giving effect to the requested release the Coverage and LTV Tests will be
satisfied, and in the case of any substitution effected pursuant to Section
7.04 of this Agreement, the Coverage and LTV Tests are not adversely affected
after giving effect to the proposed substitution;


                    (b)          Receipt
by the Lender of the Release Price;


                    (c)          Receipt
by the Lender of the Release Fee for the Collateral Release Property and all
legal fees and expenses payable by the Borrower in connection with the release
pursuant to Section 16.04(b);


                    (d)          Receipt
by the Lender on the Closing Date of one or more counterparts of each
Collateral Release Document, dated as of the Closing Date, signed by each of
the parties (other than the Lender) who is a party to such Collateral Release
Document;


                    (e)          If
required by the Lender, amendments to the Notes and the Security Instruments,
reflecting the release of the Collateral Release Property from the Collateral
Pool and, as to any Security Instrument so amended, the receipt by the Lender
of an endorsement to the Title Insurance Policy insuring the Security
Instrument, amending the effective date of the Title Insurance Policy to the
Closing Date and showing no additional exceptions to coverage other than the
exceptions shown on the Initial Closing Date, Permitted Liens and other
exceptions approved by the Lender;



                    (f)          If
the Lender determines the Collateral Release Property to be one phase of a
project, and one or more other phases of the project are Mortgaged Properties
which will remain in the Collateral Pool (“Remaining Mortgaged Properties”),
the Lender must determine that the Remaining Mortgaged Properties can be
operated separately from the Collateral Release Property and any other phases
of the project which are not Mortgaged Properties. In making this determination, the Lender shall evaluate
whether
the Remaining Mortgaged Properties comply with the terms of Sections 203 and
208 of the DUS Guide, which, as of the date of this Agreement, require, among
other things, that a phase which constitutes collateral for a loan made in
accordance with the terms of the DUS Guide (i) have adequate ingress and egress
to existing public roadways, either by location of the phase on a dedicated,
all-weather road or by access to such a road by means of a satisfactory
easement, (ii) have access which is sufficiently attractive and direct from
major thoroughfares to be conducive to continued good marketing, (iii) have a
location which is not (A) inferior to other phases, (B) such that inadequate
maintenance of other phases would have a significant negative impact on the
phase, and (C) such that the phase is visible only after passing through the
other phases of the project and (iv) comply with such other issues as are
dictated by prudent practice; 


- 37 -






                    (g)          Receipt
by the Lender of endorsements to the Tie-In Endorsements of the Title Insurance
Policies, if deemed necessary by the Lender, to reflect the release;


                    (h)          Receipt
by the Lender on the Closing Date of a writing, dated as of the Closing Date,
signed by the Borrower Parties, in the form attached as Exhibit U to
this Agreement, pursuant to which the Borrower Parties confirm that their
obligations under the Loan Documents are not adversely affected by the release
of the Collateral Release Property from the Collateral;


                    (i)          The
remaining Mortgaged Properties in the Collateral Pool shall satisfy the
then-existing Geographical Diversification Requirements; 


                    (j)          The
satisfaction of all applicable General Conditions set forth in Article XI;


                    (k)          Notwithstanding
the other provisions of this Section 7.03, no release of any of the Mortgaged
Properties shall be made unless the Borrower has provided title insurance,
taking into account Tie-In Endorsements, to Lender in respect of each of the
remaining Mortgaged Properties in the Collateral Pool in an amount equal to
125% of the Initial Valuation of each of such remaining Mortgaged Properties.


SECTION 7.04  Substitutions.


          
(a)          Right to
Substitute Collateral. Subject to
the terms, conditions and limitations of this Section 7.04 and Article VII, the
Borrower Parties shall have the right, from time to time during the Term of
this Agreement, to add one or more Multifamily Residential Properties to the
Collateral Pool in substitution of one or more Mortgaged Properties then in the
Collateral Pool in accordance with the provisions of this Section 7.04 (“Substituted
Mortgaged Property”). 


          (b)          Procedure
for Substituting Collateral.


	
   

  	
   

  
	
   

  	
               
(i)          Request. The Borrower Parties may
deliver a written
request (“Collateral Substitution Request”) to the Lender, in the form
attached as Exhibit Z to this Agreement, to add one or more
Multifamily Residential Properties to the Collateral Pool in substitution of
one or more Mortgaged Properties then in the Collateral Pool. Each Collateral Substitution Request shall
be accompanied by the following: 

  
	
   

  	
   

  
	
   

  	
  
              (A)          The
information relating to the proposed Substituted Mortgaged Property required
by the form attached as Exhibit DD to this Agreement (“Collateral
Substitution Description Package”), as amended from time to time to
include information required under the DUS guide;  

  
	
   

  	
   

  
	
   

  	
                (B)          The
  payment of all Additional Collateral Due Diligence Fees pursuant to Section
  16.03(b).

  
	
   

  	
   

  
	
   

  	
                (C)          A
  statement whether the addition of the proposed Substituted Mortgaged Property
  will occur simultaneously with the release of the proposed Collateral Release
  Property and, if not, the Borrower Parties shall specify the proposed date on
  which the

  



- 38 -







	
   

  	
   

  
	
   

  	
  proposed Substituted Mortgaged Property will be
  added to the Collateral Pool which, in no event, shall be a date which is
  more than 90 days after the proposed date of the release of the proposed
  Collateral Release Property.

  
	
   

  	
   

  
	
   

  	
            (ii)          Additional
  Information.  The Borrower Parties
  shall promptly deliver to the Lender any additional information concerning
  the proposed Substituted Mortgaged Property and the proposed Collateral
  Release Property that the Lender may from time to time reasonably request.

  
	
   

  	
   

  
	
   

  	
            (iii)          Underwriting.
 The Lender shall evaluate the proposed
  Substituted Mortgaged Property, and shall make underwriting determinations as
  to (a) the Aggregate Debt Service Coverage Ratios and the Aggregate Loan to
  Value Ratio immediately prior to and immediately after giving effect to the
  proposed substitution, and (b) the Valuation and the Net Operating Income for
  the Trailing 12 Month Period for both the proposed Substituted Mortgaged
  Property and the proposed Collateral Release Property.  Notwithstanding anything to the contrary
  contained herein, for purposes of making such underwriting determines with
  respect to the proposed Substituted Mortgaged Property, such determinations
  shall be made on the basis of a Valuation made with respect to the proposed
  Substituted Mortgaged Property, and otherwise in accordance with Fannie Mae’s
  DUS Underwriting Requirements, including applicable underwriting floors.  Within 30 days after receipt of (a)
the
  Collateral Substitution Request for the proposed Substituted Mortgaged
  Property and the proposed Collateral Release Property and (b) all reports,
  certificates and documents set forth on Exhibit EE to this Agreement,
  including a zoning analysis undertaken in accordance with Section 206 of the
  DUS Guide, the Lender shall notify the Borrower Parties whether or not the
  proposed Substituted Mortgaged Property meets the Coverage and LTV Tests and
  DUS Underwriting Requirements required by this Section 7.04(b)(iii), and
  therefore whether or not it shall consent to the addition of the proposed
  Substituted Mortgaged Property to the Collateral Pool in substitution of the
  proposed Collateral Release Property and, if it shall so consent, shall set
  forth the Aggregate Debt Service Coverage Ratios and the Aggregate Loan to
  Value Ratio which it estimates shall result from the substitution of the
  proposed Substituted Mortgaged Property into the Collateral Pool in
  replacement of the proposed Collateral Release Property.  If the proposed Substituted Mortgaged
  Property does not meet the Coverage and LTV Tests and DUS Underwriting
  Requirements required by this Section 7.04(b)(iii), and therefore the Lender
  does not consent to the substitution of the proposed Substituted Mortgaged
  Property into the Collateral Pool in replacement of the proposed Collateral
  Release Property, the Lender shall include, in its notice, a brief statement
  of the reasons for doing so.  Within
  five Business Days after receipt of the Lender’s notice that it shall consent
  to the substitution of the proposed Substituted Mortgaged Property into the
  Collateral Pool in replacement of the proposed Collateral Release Property,
  the Borrower Parties shall notify the Lender whether or not they elect to
  cause such substitution to occur.  If
  the Borrower Parties fail to respond within the period of five Business Days,
  they shall be conclusively deemed to have elected  not to cause the proposed substitution to occur.

  
	
   

  	
   

  
	
   

  	
            (iv)          Closing.
 If, pursuant to this Section 7.04, the Lender
  consents to the substitution of the proposed Substituted Mortgaged Property
  into the Collateral Pool in 

  



- 39 -







	
   

  	
   

  
	
   

  	
  replacement of the proposed Collateral Release
  Property, the Borrower Parties timely elect to cause such substitution to
  occur and all conditions contained in Section 7.04(c) are satisfied, the
  Lender shall permit the proposed Substituted Mortgaged Property to be
  substituted into the Collateral Pool in replacement of the proposed
  Collateral Release Property, at a closing to be held at offices designated by
  the Lender on a Closing Date selected by the Lender, and occurring --

  






	
   

  	
   

  
	
   

  	
                (x)          if
  the substitution of the proposed Substituted Collateral Property is to occur
  simultaneously with the release of the proposed Collateral Released Property,
  within 30 days after the Lender’s receipt of the Borrower Parties’ election
  (or on such other date to which the Borrower Parties and the Lender may
  agree); or

  
	
   

  	
   

  
	
   

  	
                (y)          if
  the substitution of the proposed Substituted Collateral Property is to occur
  subsequent to the release of the Collateral Release Property, within 90 days
  after the release of the Collateral Release Property in accordance with
  Section 7.02(c).

  






	
   

  	
   

  
	
   

  	
  If, in the case of clause (y), the addition of the proposed
  Substituted Collateral Property to the Collateral Pool does not occur within
  90 days or such longer period as approved by Lender, in its sole discretion,
  after the release of the Collateral Release Property in accordance with such
  clause (y), then the Borrower Parties shall have waived their right to
  substitute such Collateral Release Property with the proposed Substituted
  Mortgaged Property, the Release Price shall be determined pursuant to Section
  7.02(c) and the Borrower Parties shall comply with the requirement set forth
  in Section 7.03.  Such Release Price,
  or the applicable portion thereof, shall be credited under this Agreement
  and/or be immediately due and payable by the Borrower Parties to the Lender to
  reduce the Advances Outstanding as required by, and in the manner set forth
  in, Section 7.02(d).

  



          (c)          Conditions
Precedent to Substitution of a Substituted Mortgaged Property into the
Collateral Pool.  The substitution
of a Substituted Mortgaged Property into the Collateral Pool in replacement of
a Collateral Release Property on the Closing Date is subject to the
satisfaction of the following conditions precedent:


	
   

  	
   

  
	
   

  	
            (i)          The
  proposed Substituted Mortgaged Property has a Debt Service Coverage Ratio for
  the Trailing 12 Month Period of not less than 140% and a Loan to Value Ratio
  of not more than 65% and immediately after giving effect to the requested
  addition, the Coverage and LTV Tests will be satisfied;

  
	
   

  	
   

  
	
   

  	
            (ii)          The
  Lender shall have made the determination, as a part of the underwriting
  evaluations made in accordance with Section 7.04(b)(iii), that (a) the
  Aggregate Debt Service Coverage Ratio immediately after giving effect to the
  proposed substitution will be equal to or higher than the Aggregate Debt
  Service Coverage Ratio immediately prior to the proposed substitution, and
  (ii) the Aggregate Loan to Value Ratio immediately after giving effect to the
  proposed substitution will be equal to or less than the Aggregate Loan to
  Ratio immediately prior to giving effect to the proposed substitution;

  



- 40 -







	
   

  	
   

  
	
   

  	
                (iii)          With
  respect to the release of the proposed Collateral Release Property, the
  Borrower Parties shall have complied with Section 7.03 (other than clause (b)
  with respect to the requirement pertaining to Release Price);

  
	
   

  	
   

  
	
   

  	
                (iv)          The
  receipt by the Lender of the Collateral Substitution Fee and all legal fees
  and expenses payable by the Borrower Parties in connection with the
  substitution pursuant to Section 16.04(b).

  
	
   

  	
   

  
	
   

  	
                (v)          The
  delivery to the Title Company, with fully executed instructions directing the
  Title Company to file and/or record in all applicable jurisdictions, all
  applicable Collateral Substitution Loan Documents required by Lender,
  including duly executed and delivered original copies of any Security
  Instruments and UCC-1 Financing Statements covering the portion of the
  Substituted Mortgaged Property comprised of personal property, and other
  appropriate documents, in form and substance satisfactory to the Lender and
  in form proper for recordation, as may be necessary in the opinion of the
  Lender to perfect the Lien created by the applicable additional Security
  Instrument, and any other Collateral Substitution Loan Document creating a
  Lien in favor of the Lender, and the payment of all taxes, fees and other
  charges payable in connection with such execution, delivery, recording and
  filing;

  
	
   

  	
   

  
	
   

  	
                (vi)          If
  required by the Lender, amendments to the Notes and the Security Instruments,
  reflecting the addition of the Substituted Mortgaged Property to the
  Collateral Pool and, as to any Security Instrument so amended, the receipt by
  the Lender of an endorsement to the Title Insurance Policy insuring the
  Security Instrument, amending the effective date of the Title Insurance
  Policy to the Closing Date and showing no additional exceptions to coverage
  other than Permitted Liens;

  
	
   

  	
   

  
	
   

  	
                (vii)          If
  the Title Insurance Policy for the Substituted Mortgaged Property contains a
  Tie-In Endorsement, and endorsement to each other Title Insurance Policy
  containing a Tie-In Endorsement, adding a reference to the Substituted
  Mortgaged Property;

  
	
   

  	
   

  
	
   

  	
                (viii)          The
  delivery to the Lender of additional collateral or the repayment of Advances
  Outstanding to the extent required pursuant to Section 7.04(d); and

  
	
   

  	
   

  
	
   

  	
                (ix)          The
  satisfaction of all General Conditions set forth in Article XI.

  



          (d)          Restriction
on Borrowings.  In the case that the
substitution of the proposed Substituted Mortgaged Property is not to occur
simultaneously with the release of the proposed Collateral Release Property,
from and after the release of the proposed Collateral Release Property until the
addition of the proposed Substituted Mortgaged Property into the Collateral
Pool in accordance with this Section 7.04, the Borrower shall not be permitted
to have the aggregate unpaid principal balance of Loans Outstanding to be in
excess of an amount equal to the then-existing Commitment minus the Allocable
Credit Facility Amount attributable to the Collateral Release Property that was
released, unless the Borrower shall have delivered to the Lender additional
collateral reasonably acceptable to the Lender in an amount at least equal to
such Allocable Credit Facility Amount.
In the event that the aggregate unpaid principal balance 


- 41 -






of Advances Outstanding exceeds such amount (and
additional collateral in an amount at least equal to the applicable Allocable
Credit Facility Amount has not been delivered by the Borrower to the Lender),
as a condition precedent to the substitution of a Substituted Mortgaged
Property into the Collateral Pool, the Borrower shall pay such excess.  Notwithstanding the foregoing, in no event
shall the value of the additional collateral exceed 15% of the principal
balance of the Loans Outstanding.  Any
payment received by the Lender under this Section 7.04(d) shall be applied
against Loans Outstanding in the manner prescribed for Release Prices pursuant
to Section 7.02.  The additional
collateral shall be released to the Borrower upon the addition of the
applicable Substituted Mortgaged Property to the Collateral Pool in accordance
with this Section 7.05.


ARTICLE VIII

EXPANSION OF CREDIT FACILITY


SECTION 8.01  Right
to Increase Commitment.  Subject to the terms, conditions and
limitations of this Article, the Borrower shall have the right, at any time or
from time to time during the Fixed Facility Availability Period, to increase
the Fixed Facility Commitment, the Variable Facility Commitment, or both.  Either Commitment may be increased by
increases in the value of the Mortgaged Properties or as a result of additions
of Mortgaged Properties to the Collateral Pool.  The Borrower’s right to increase the Commitment as a result
of
increases in the value of the Mortgaged Properties is subject to the following
limitations:



                    (a)          Maximum
Amount of Increase in Commitment.
Notwithstanding the terms of this Agreement and Section 8.01 of the
Other Credit Agreement, Borrower shall have the right, upon repayment in full
of the loans secured by those certain Multifamily Residential Properties
identified on Exhibit HH (the “DUS Properties”), to increase the
Commitment by an additional $90,493,000 (to a maximum Commitment of
$250,000,000). Borrower Parties
acknowledge that the DUS Properties are currently subject to liens under the
Fannie Mae Delegated Underwriting and Servicing program and are serviced by
Lender. Borrower hereby agrees that the
total commitment, when added to the commitment of the Lender to the Borrower
under the Other Credit Agreement, shall not exceed $850,000,000. 


                    (b)          Minimum
Request.  Each Request for an
increase in the Commitment shall be in the minimum amount of $3,000,000.


                    
(c)          Terms and
Conditions.  The terms and
conditions of this Agreement shall apply to any increase in the Commitment
closed not later than December 31, 2005.
The terms and conditions (including pricing, other than in respect of an
increase in the Commitment in an amount equal to or less than the Reserved
Amount on which the Rate Preservation Fee has been paid, in which case the
terms and conditions, including pricing, shall be as set forth in this
Agreement) applicable to any increase in the Commitment after December 31, 2005
shall be acceptable to Lender in its discretion.


SECTION 8.02  Procedure
for Obtaining Increases in Commitment.



                    (a)          Request.
In order to obtain an increase in the
Commitment, the Borrower shall deliver a written request for an increase (a “Credit
Facility Expansion Request”) to the  


- 42 -






Lender, in the form attached as Exhibit V to
this Agreement.  Each Credit Facility
Expansion Request shall be accompanied by the following:


	
   

  	

                        (i)          A
  designation of the amount of the proposed increase;

  
	
   

  	
  
                        (ii)          A
  designation of the increase in the Fixed Facility Credit Commitment and the
  Variable Facility Credit Commitment; 

  
	
   

  	
  
                        (iii)          If
  any Multifamily Residential Properties are proposed to be added to the
  Collateral Pool, a list of such Multifamily Residential Properties and
  evidence of compliance with the requirements of Article VI in connection with
  such addition; 

  
	
   

  	
  
                        (iv)          A
  request that the Lender inform the Borrower of the Fixed Facility Fee and the
  Variable Facility Fee to apply to Advances drawn from such increase in the
  Commitment.

  



                    (b)          Closing.
 If all conditions contained in Section 8.03
are satisfied, the Lender shall permit the requested increase in the
Commitment, at a closing to be held at offices designated by the Lender on a
Closing Date selected by the Lender, and occurring within fifteen (15) Business
Days after the Lender’s receipt of the Credit Facility Expansion Request (or on
such other date to which the Borrower and the Lender may agree).


SECTION 8.03  Conditions
Precedent to Increase in Commitment.  The right of the Borrower to increase the
Commitment is subject to the satisfaction of the following conditions precedent
on or before the Closing Date:


                    (a)          After
giving effect to the requested increase the Coverage and LTV Tests will be
satisfied;


                    (b)          Payment
by the Borrower of the Expansion Origination Fee in accordance with Section
16.02(b) and all legal fees and expenses payable by the Borrower in connection
with the expansion of the Commitment pursuant to Section 16.04(b);


                    (c)          The
receipt by the Lender of an endorsement to each Title Insurance Policy,
amending the effective date of the Title Insurance Policy to the Closing Date,
increasing the limits of liability to the Commitment, as increased under this
Article, showing no additional exceptions to coverage other than the exceptions
shown on the Initial Closing Date (or, if applicable, the last Closing Date
with respect to which the Title Insurance Policy was endorsed), the Permitted
Liens and other exceptions approved by the Lender, together with any
reinsurance agreements required by the Lender;


                    (d)          The
receipt by the Lender of fully executed original copies of all Credit Facility
Expansion Loan Documents, each of which shall be in full force and effect, and
in form and substance satisfactory to the Lender in all respects;


- 43 -










               (e)          if
determined necessary by the Lender, the Borrower’s agreement to such
geographical diversification requirements as the Lender may determine; and


               (f)          The
satisfaction of all applicable General Conditions set forth in Article XI.


ARTICLE IX

PARTIAL TERMINATION OF FACILITIES


SECTION 9.01  Right
to Complete or Partial Termination of Facilities.  Subject to the terms and conditions of this
Article, the Borrower shall have the right to permanently reduce the Variable
Facility Commitment and the Fixed Facility Commitment in accordance with the
provisions of this Article.


SECTION 9.02  Procedure
for Complete or Partial Termination of Facilities.


               (a)          Request.
In order to permanently reduce the Variable Facility Commitment or the Fixed
Facility Commitment, the Borrower may deliver a written request for the
reduction (“Facility Termination Request”) to the Lender, in the form
attached as Exhibit W to this Agreement.  A permanent reduction of the Variable Facility Commitment to $0
shall be referred to as a “Complete Variable Facility Termination.”  A permanent reduction of the Fixed
Facility
Commitment to $0 shall be referred to as a “Complete Fixed Facility Termination.”   The Facility Termination
Request shall be
accompanied by the following:


	
   

  	
   

  	
   

  
	
   

  	
                      (i)          A
  designation of the proposed amount of the reduction in the Variable Facility
  Commitment or Fixed Facility Commitment, as the case may be; and

  
	
   

  	
   

  	
   

  
	
   

  	
                      (ii)          Unless
  there is a Complete Variable Facility Termination, or a Complete Fixed
  Facility Termination, a designation by the Borrower of any Variable Advances
  which will be prepaid or Fixed Advances which will be prepaid or defeased, as
  the case may be.

  



Any release of Collateral, whether or not made in
connection with a Facility Termination Request, must comply with all conditions
to a release which are set forth in Article VII.


               (b)          Closing.
 If all conditions contained in Section 9.03
are satisfied, the Lender shall permit the Variable Facility Commitment or
Fixed Facility Commitment as the case may be, to be reduced to the amount
designated by the Borrower, at a closing to be held at offices designated by
the Lender on a Closing Date selected by the Lender, within fifteen (15)
Business Days after the Lender’s receipt of the Facility Termination Request
(or on such other date to which the Borrower and the Lender may agree), by
executing and delivering a counterpart of an amendment to this Agreement, in
the form attached as Exhibit X to this Agreement, evidencing the
reduction in the Facility Commitment. The document referred to in the preceding
sentence is referred to in this Article as the “Facility Termination
Document.”


SECTION 9.03  Conditions
Precedent to Complete or Partial Termination of Facilities.  The right of the Borrower to reduce the Facility Commitment and
the obligation of the Lender to


- 44 -






execute the Facility Termination Document,
are subject to the satisfaction of the following conditions precedent on or
before the Closing Date:


               (a)          Payment
by the Borrower in full of all of the Variable Advances Outstanding and Fixed
Facility Advances Outstanding, as the case may be, required to be paid in order
that the aggregate unpaid principal balance of all Variable Advances
Outstanding and Fixed Facility Advances Outstanding, as the case may be, is not
greater than the Variable Facility Commitment and Fixed Facility Commitment, as
the case may be, including any associated prepayment premiums or other amounts
due under the Notes (but if the Borrower is not required to prepay all of the
Variable Advances or Fixed Facility Advances Outstanding, as the case may be,
the Borrower shall have the right to select which of the Variable Advances or
Fixed Facility Advances, as the case may be, shall be repaid);


               (b)          Payment
by the Borrower of the Facility Termination Fee;


               (c)          Receipt
by the Lender on the Closing Date of one or more counterparts of the Facility
Termination Document, dated as of the Closing Date, signed by each of the
parties (other than the Lender) who is a party to such Facility Termination
Document; and


               (d)          The
satisfaction of all applicable General Conditions set forth in Article XI.


ARTICLE X

TERMINATION OF CREDIT FACILITY


SECTION 10.01  Right
to Terminate Credit Facility.  Subject to the terms and conditions of this
Article, the Borrower shall have the right to terminate this Agreement and the
Credit Facility and receive a release of all of the Collateral from the
Collateral Pool in accordance with the provisions of this Article.


SECTION 10.02  Procedure
for Terminating Credit Facility.


               (a)          Request.
 In order to terminate this Agreement and the
Credit Facility, the Borrower shall deliver a written request for the
termination (“Credit Facility Termination Request”) to the Lender, in
the form attached as Exhibit Y to this Agreement.


               (b)          Closing.
 If all conditions contained in Section 10.03
are satisfied, this Agreement shall terminate, and the Lender shall cause all
of the Collateral to be released from the Collateral Pool, at a closing to be
held at offices designated by the Lender on a Closing Date selected by the
Lender, within 30 Business Days after the Lender’s receipt of the Credit
Facility Termination Request (or on such other date to which the Borrower and
the Lender may agree), by executing and delivering, and causing all applicable
parties to execute and deliver, all at the sole cost and expense of the
Borrower, (i) instruments, in the form customarily used by the Lender for
releases in the jurisdictions in which the Mortgaged Properties are located,
releasing all of the Security Instruments as a Lien on the Mortgaged Properties,
(ii) UCC-3 Termination Statements terminating all of the UCC-1 Financing
Statements perfecting a Lien on the personal property located on the Mortgaged
Properties, in form customarily used in the jurisdiction


- 45 -






governing the perfection of the security interest
being released, (iii) such other documents and instruments as the Borrower may
reasonably request evidencing the release of the Collateral from any lien
securing the Obligations (including a termination of any restriction on the use
of any accounts relating to the Collateral) and the release and return to the
Borrower of any and all escrowed amounts relating thereto, (iv) instruments
releasing the Borrower Parties from their obligations under this Agreement and
any and all other Loan Documents, and (v) the Notes, each marked paid and
canceled.  The instruments referred to
in the preceding sentence are referred to in this Article as the “Facility
Termination Documents.”


SECTION 10.03  Conditions
Precedent to Termination of Credit Facility.  The right of the Borrower to terminate this
Agreement and the Credit Facility and to receive a release of all of the
Collateral from the Collateral Pool and the Lender’s obligation to execute and
deliver the Facility Termination Documents on the Closing Date are subject to
the following conditions precedent:


               (a)          Payment
by the Borrower in full of all of the Notes Outstanding on the Closing Date,
including any associated prepayment premiums or other amounts due under the
Notes and all other amounts owing by the Borrower to the Lender under this
Agreement;


               (b)          Payment
of the Facility Termination Fee; and


               (c)          The
satisfaction of all applicable General Conditions set forth in Article XI.


ARTICLE XI

GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS


          The
obligation of the Lender to close the transaction requested in a Request shall
be subject to the following conditions precedent (“General Conditions”)
in addition to any other conditions precedent set forth in this Agreement:


SECTION 11.01  Conditions
Applicable to All Requests.  Each of the following conditions precedent
shall apply to all Requests:


               (a)          Payment
of Expenses.  The payment by the
Borrower of the Lender’s reasonable fees and expenses payable in accordance
with this Agreement.


               (b)          No
Material Adverse Change.  Except in
connection with a Credit Facility Termination Request, there has been no
material adverse change in the financial condition, business or prospects of
the Borrower Parties or in the physical condition, operating performance or
value of any of the Mortgaged Properties since the Initial Closing Date.


               (c)          No
Default.  Except in connection with
a Credit Facility Termination Request, there shall exist no Event of Default or
Potential Event of Default on the Closing Date for the Request and, after
giving effect to the transaction requested in the Request, no Event of Default
or Potential Event of Default shall have occurred.


               (d)          No
Insolvency.  Except in connection
with a Credit Facility Termination Request, receipt by the Lender on the
Closing Date for the Request of evidence satisfactory to


- 46 -






the Lender that no Borrower Party is insolvent (within
the meaning of any applicable federal or state laws relating to bankruptcy or
fraudulent transfers) or will be rendered insolvent by the transactions
contemplated by the Loan Documents, including the making of a Future Advance,
or, after giving effect to such transactions, will be left with an unreasonably
small capital with which to engage in its business or undertakings, or will
have intended to incur, or believe that it has incurred, debts beyond its
ability to pay such debts as they mature or will have intended to hinder, delay
or defraud any existing or future creditor.


               (e)          No
Untrue Statements.  The Loan
Documents shall not contain any untrue or misleading statement of a material
fact and shall not fail to state a material fact necessary in order to make the
information contained therein not misleading.


               (f)          Representations
and Warranties.  Except in
connection with a Credit Facility Termination Request, all representations and
warranties made by any Borrower Party in the Loan Documents shall be true and
correct in all material respects on the Closing Date for the Request with the
same force and effect as if such representations and warranties had been made
on and as of the Closing Date for the Request.


               (g)          No
Condemnation or Casualty.  Except in
connection with a Credit Facility Termination Request, there shall not be
pending or threatened any condemnation or other taking, whether direct or
indirect, against any Mortgaged Property and there shall not have occurred any
casualty to any improvements located on any Mortgaged Property, which casualty
would have a material adverse effect on the continued operations of such
Mortgaged Property.


               (h)          Delivery
of Closing Documents.  The receipt
by the Lender of the following, each dated as of the Closing Date for the
Request, in form and substance satisfactory to the Lender in all respects:


	
   

  	
   

  
	
   

  	
                     (i)          A
  Compliance Certificate;

  
	
   

  	
   

  
	
   

  	
                     (ii)         An
  Organizational Certificate; and

  
	
   

  	
   

  
	
   

  	
                     (iii)        Such
  other documents, instruments, approvals (and, if requested by the Lender,
  certified duplicates of executed copies thereof) and opinions as the Lender
  may reasonably request.

  



               (i)          Covenants.
 Except in connection with a Credit Facility
Termination Request, the Borrower Parties are in full compliance with each of
the covenants set forth in Articles XIII, XIV and XV of this Agreement, without
giving effect to any notice and cure rights of the Borrower Parties.


SECTION 11.02  Delivery
of Closing Documents Relating to Collateral Addition Request, Collateral
Substitution Request, Credit Facility Expansion Request or Future Advance
Request. With respect to the closing of a Collateral
Addition Request, Collateral Substitution Request, or a Credit Facility
Expansion Request, it shall be a condition precedent that the Lender receives
each of the following, each dated as of the Closing Date for the Request, in
form and substance satisfactory to the Lender in all respects:


- 47 -






               (a)          Loan
Documents.  Fully executed original
copies of each Loan Document required to be executed in connection with the
Request, duly executed and delivered by the parties thereto (other than the
Lender), each of which shall be in full force and effect.


               (b)          Opinion.
 Favorable opinions of counsel to the
Borrower Parties, as to the due organization and qualification of the Borrower
Parties, the due authorization, execution, delivery and enforceability of each
Loan Document executed in connection with the Request and such other matters as
the Lender may reasonably require.


SECTION 11.03  Delivery
of Property-Related Documents.  With respect to each of the Mortgaged
Properties to be made part of the Collateral Pool on the Closing Date of a
Collateral Addition Request or a Collateral Substitution Request, it shall be a
condition precedent that the Lender receive each of the following, each dated
as of the Closing Date of a Collateral Addition Request or a Collateral
Substitution Request in form and substance satisfactory to the Lender in all
respects:


               (a)          A
favorable opinion of local counsel to the Borrower Parties or the Lender as to
the enforceability of the Security Instrument, and any other Loan Documents,
executed in connection with the Request.


               (b)          A
commitment for the Title Insurance Policy applicable to the Mortgaged Property
and a pro forma Title Insurance Policy based on the Commitment.


               (c)          The
Insurance Policy (or a certified copy of the Insurance Policy) applicable to
the Mortgaged Property.


               (d)          The
Survey applicable to the Mortgaged Property.


               (e)          Evidence
satisfactory to the Lender of compliance of the Mortgaged Property with
property laws as required by Sections 205 and 206 of Part III of the DUS Guide.


               (f)          An
Appraisal of the Mortgaged Property.


               (g)          A
Replacement Reserve Agreement, providing for the establishment of a replacement
reserve account, to be pledged to the Lender, in which the owner shall (unless
waived by the Lender) periodically deposit amounts for replacements for
improvements at the Mortgaged Property and as additional security for the Borrower
Parties’ obligations under the Loan Documents.


               (h)          A
Completion/Repair and Security Agreement, together with required escrows, on
the standard form required by the DUS Guide.


               (i)          An
Assignment of Management Agreement, on the standard form required by the DUS
Guide.


               (j)          An
Assignment of Leases and Rents, if the Lender determines one to be necessary or
desirable, provided that the provisions of any such assignment shall be
substantively


- 48 -






identical to those in the Security Instrument covering
the Collateral, with such modifications as may be necessitated by applicable
state or local law.


ARTICLE XII

REPRESENTATIONS AND WARRANTIES


SECTION 12.01  Representations
and Warranties of the Borrower Parties.  Each Borrower Party hereby represents and
warrants to the Lender, with respect to itself, as follows:


               (a)          Due
Organization; Qualification.


	
   

  	
   

  
	
   

  	
                     (1)          The
  REIT is qualified to transact business and is in good standing in the State
  of Tennessee.  The Borrower Parties
  are qualified to transact business and is in good standing in the State in
  which they are organized and in each other jurisdiction in which such
  qualification and/or standing is necessary to the conduct of its business and
  where the failure to be so qualified would adversely affect the validity of,
  the enforceability of, or the ability of the Borrower Parties to perform the
  Obligations under this Agreement and the other Loan Documents.  The Borrower Parties are qualified to
  transact business and are in good standing in each State in which they own a
  Mortgaged Property.

  
	
   

  	
   

  
	
   

  	
                     (2)          The
  Borrower Parties’ principal place of business, principal office and office
  where they keep their books and records as to the Collateral is located at
  the address set out in Section 23.08.

  



               (b)          Power
and Authority.  The Borrower Parties
have the requisite power and authority (i) to own their properties and to carry
on their business as now conducted and as contemplated to be conducted in
connection with the performance of the Obligations hereunder and under the
other Loan Documents and (ii) to execute and deliver this Agreement and the
other Loan Documents and to carry out the transactions contemplated by this
Agreement and the other Loan Documents.


               (c)          Due
Authorization.  The execution,
delivery and performance of this Agreement and the other Loan Documents have
been duly authorized by all necessary action and proceedings by or on behalf of
the Borrower Parties, and no further approvals or filings of any kind,
including any approval of or filing with any Governmental Authority, are
required by or on behalf of the Borrower Parties as a condition to the valid
execution, delivery and performance by the Borrower Parties of this Agreement
or any of the other Loan Documents.


               (d)          Valid
and Binding Obligations.  This
Agreement and the other Loan Documents have been duly authorized, executed and
delivered by the Borrower Party and constitute the legal, valid and binding
obligations of the Borrower Party, enforceable against the Borrower Party in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles affecting the enforcement of creditors’
rights generally or by equitable principles or by the exercise of discretion by
any court.


- 49 -






               (e)          Non-contravention;
No Liens.  Neither the execution and
delivery of this Agreement and the other Loan Documents, nor the fulfillment of
or compliance with the terms and conditions of this Agreement and the other
Loan Documents nor the performance of the Obligations:


	
   

  	
   

  
	
   

  	
                     (1)          does
  or will conflict with or result in any breach or violation of any Applicable
  Law enacted or issued by any Governmental Authority or other agency having
  jurisdiction over the Borrower Party, any of the Mortgaged Properties or any
  other portion of the Collateral or other assets of the Borrower Party, or any
  judgment or order applicable to the Borrower Party or to which the Borrower
  Party, any of the Mortgaged Properties or other assets of the Borrower Party
  are subject;

  
	
   

  	
   

  
	
   

  	
                     (2)          does
  or will conflict with or result in any material breach or violation of, or
  constitute a default under, any of the terms, conditions or provisions of the
  Borrower Party’s Organizational Documents, any indenture, existing agreement
  or other instrument to which the Borrower Party is a party or to which the
  Borrower Party, any of the Mortgaged Properties or any other portion of the
  Collateral or other assets of the Borrower Party are subject;

  
	
   

  	
   

  
	
   

  	
                     (3)          does
  or will result in or require the creation of any Lien on all or any portion
  of the Collateral or any of the Mortgaged Properties, except for the
  Permitted Liens; or

  
	
   

  	
   

  
	
   

  	
                     (4)          does
  or will require the consent or approval of any creditor of the Borrower Party,
  any Governmental Authority or any other Person except such consents or
  approvals which have already been obtained.

  



               (f)          Pending
Litigation or other Proceedings.
There is no pending or, to the best knowledge of the Borrower Party,
threatened action, suit, proceeding or investigation, at law or in equity,
before any court, board, body or official of any Governmental Authority or
arbitrator against or affecting any Mortgaged Property or any other portion of
the Collateral or other assets of the Borrower Party, which, if decided
adversely to the Borrower Party, would have, or may reasonably be expected to
have, a Material Adverse Effect.  The
Borrower Party is not in default with respect to any order of any Governmental
Authority.


               (g)          Solvency.
 The Borrower Party is not insolvent and will
not be rendered insolvent by the transactions contemplated by this Agreement or
the other Loan Documents and after giving effect to such transactions, the
Borrower Party will not be left with an unreasonably small amount of capital
with which to engage in its business or undertakings, nor will the Borrower
Party have incurred, have intended to incur, or believe that it has incurred,
debts beyond its ability to pay such debts as they mature.  The Borrower Party did not receive less than
a reasonably equivalent value in exchange for incurrence of the
Obligations.  There (i) is no
contemplated, pending or, to the best of the Borrower Party’s knowledge,
threatened bankruptcy, reorganization, receivership, insolvency or like
proceeding, whether voluntary or involuntary, affecting the Borrower Party or
any of the Mortgaged Properties and (ii) has been no assertion or exercise
of jurisdiction over the Borrower Party or any of the Mortgaged Properties by
any court empowered to exercise bankruptcy powers.


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          (h)          No
Contractual Defaults.  There are no
defaults by the Borrower Party or, to the knowledge of the Borrower Party, by
any other Person under any contract to which the Borrower Party is a party
relating to any Mortgaged Property, including any management, rental, service,
supply, security, maintenance or similar contract, other than defaults which do
not have, and are not reasonably expected to have, a Material Adverse
Effect.   Neither the Borrower Party
nor, to the knowledge of the Borrower Party, any other Person, has received
notice or has any knowledge of any existing circumstances in respect of which
it could receive any notice of default or breach in respect of any contracts
affecting or concerning any Mortgaged Property.


          (i)          Compliance
with the Loan Documents.  The
Borrower Party is in compliance with all provisions of the Loan Documents to
which it is a party or by which it is bound.
The representations and warranties made by the Borrower Party in the
Loan Documents are true, complete and correct as of the Closing Date and do not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.


          (j)          ERISA.
 


          1.          No
Borrower Party is a “employee benefit plan” as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
and the assets of any Borrower Party do not constitute “plan assets” of one or
more such plans within the meaning of 29 Code of Federal Regulations (“C.F.R.”)
Section 2510.3-101 or the Advances from Lender to Borrower described hereunder
are exempt from the restrictions of Section 406(a)(1)(A) through (D) of ERISA
as well as from the taxes imposed by Section 4975(a) and (b) of the Internal
Revenue Code of 1986, as amended (“Code”), by reason of Department of
Labor Prohibited Transaction Exemption 96-23 (“INHAM Exemption”).


          2.          No
Borrower Party is a “governmental plan” within the meaning of Section 3(32) of
ERISA.


          3.          The
Borrower Parties and transactions with the Borrower Parties are not subject to
state statutes regulating investments and fiduciary obligations with respect to
governmental plans.


          4.          One
or more of the following circumstances is/are true:


                       (i)          Equity
interests in the Borrower are publicly offered securities within the meaning of
29 C.F.R. Section 2510.3-101(b)(2).


                       (ii)          Less
than twenty-five percent (25%) of all equity interests in the Borrower are held
by “benefit plan investors” within the meaning of 29 C.F.R. Section
2510.3-101(f)(2).


                       (iii)          The
Borrower qualifies as an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e).


                       (iv)          The
Advances are exempt from the restrictions of Section 406(a)(1)(A) through (D)
of ERISA as well as from the taxes imposed by Section 4975(a) and (b) of the
Code.


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               (k)          Financial
Information.  The financial
projections relating to the Borrower Party and delivered to the Lender on or
prior to the date hereof, if any, were prepared on the basis of assumptions
believed by the Borrower Party, in good faith at the time of preparation, to be
reasonable and the Borrower Party is not aware of any fact or information that
would lead it to believe that such assumptions are incorrect or misleading in
any material respect; provided, however, that no representation or warranty is
made that any result set forth in such financial projections shall be
achieved.  The financial statements of
the Borrower Party which have been furnished to the Lender are complete and
accurate in all material respects and present fairly the financial condition of
the Borrower Party, as of its date in accordance with GAAP, applied on a
consistent basis, and since the date of the most recent of such financial
statements no event has occurred which would have, or may reasonably be
expected to have a Material Adverse Effect, and there has not been any material
transaction entered into by the Borrower Party other than transactions in the
ordinary course of business.  The
Borrower Party has no material contingent obligations which are not otherwise
disclosed in its most recent financial statements.


               (l)          Accuracy
of Information.  No information,
statement or report furnished in writing to the Lender by the Borrower Party in
connection with this Agreement or any other Loan Document or in connection with
the consummation of the transactions contemplated hereby and thereby contains
any material misstatement of fact or omits to state a material fact necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading; and the representations and warranties of
the Borrower Party and the statements, information and descriptions contained
in the Borrower Party’s closing certificates, as of the Closing Date, are true,
correct and complete in all material respects, do not contain any untrue
statement or misleading statement of a material fact, and do not omit to state
a material fact required to be stated therein or necessary to make the
certifications, representations, warranties, statements, information and
descriptions contained therein, in light of the circumstances under which they
were made, not misleading; and the estimates and the assumptions contained
herein and in any certificate of the Borrower Party delivered as of the Closing
Date are reasonable and based on the best information available to the Borrower
Party.


               (m)          No
Conflicts of Interest.  To the best
knowledge of the Borrower Party, no member, officer, agent or employee of the
Lender has been or is in any manner interested, directly or indirectly, in that
Person’s own name, or in the name of any other Person, in the Loan Documents,
the Borrower Party or any Mortgaged Property, in any contract for property or
materials to be furnished or used in connection with such Mortgaged Property or
in any aspect of the transactions contemplated by the Loan Documents.


               (n)          Governmental
Approvals.  No Governmental Approval
not already obtained or made is required for the execution and delivery of this
Agreement or any other Loan Document or the performance of the terms and
provisions hereof or thereof by the Borrower Party.


               (o)          Governmental
Orders.  The Borrower Party is not
presently under any cease or desist order or other orders of a similar nature,
temporary or permanent, of any Governmental Authority which would have the
effect of preventing or hindering performance of its duties hereunder, nor are
there any proceedings presently in progress or to its knowledge contemplated
which would, if successful, lead to the issuance of any such order.


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               (p)          No
Reliance.  The Borrower Party
acknowledges, represents and warrants that it understands the nature and
structure of the transactions contemplated by this Agreement and the other Loan
Documents, that it is familiar with the provisions of all of the documents and
instruments relating to such transactions; that it understands the risks
inherent in such transactions, including the risk of loss of all or any of the
Mortgaged Properties; and that it has not relied on the Lender or Fannie Mae
for any guidance or expertise in analyzing the financial or other consequences
of the transactions contemplated by this Agreement or any other Loan Document
or otherwise relied on the Lender or Fannie Mae in any manner in connection
with interpreting, entering into or otherwise in connection with this
Agreement, any other Loan Document or any of the matters contemplated hereby or
thereby.


               (q)          Compliance
with Applicable Law.  The Borrower
Party is in compliance with Applicable Law, including all Governmental
Approvals, if any, except for such items of noncompliance that, singly or in
the aggregate, have not had and are not reasonably expected to cause, a
Material Adverse Effect.


               (r)          Contracts
with Affiliates.  Except as
otherwise approved in writing by the Lender, the Borrower Party has not entered
into and is not a party to any contract, lease or other agreement with any
Affiliate of the Borrower Party for the provision of any service, materials or
supplies to any Mortgaged Property (including any contract, lease or agreement
for the provision of property management services, cable television services or
equipment, gas, electric or other utilities, security services or equipment, laundry
services or equipment or telephone services or equipment).  The Lender hereby approves the property
management agreements set forth on Exhibit AA to this Agreement.


               (s)          Lines
of Business.  The Borrower Party is
not engaged in any businesses other than the acquisition, ownership,
development, construction, leasing, financing or management of Multifamily
Residential Properties, and the conduct of these businesses does not violate
the Organizational Documents pursuant to which it is formed.


               (t)          Status
as a Real Estate Investment Trust.
The REIT is qualified, and is taxed as, a real estate investment trust
under Subchapter M of the Internal Revenue Code, and is not engaged in any
activities which would jeopardize such qualification and tax treatment.


SECTION 12.02  Representations
and Warranties of the Borrower Parties.  The Borrower Parties hereby represent and
warrant to the Lender as follows with respect to each of the Mortgaged
Properties:


               (a)          Title.
 The relevant Borrower Party has good, valid,
marketable and indefeasible title to each Mortgaged Property (either in fee
simple or as tenant under a ground lease meeting all of the requirements of the
DUS Guide), free and clear of all Liens whatsoever except the Permitted
Liens.  Each Security Instrument, if and
when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create a valid, perfected first lien on the Mortgaged Property
intended to be encumbered thereby (including the Leases related to such
Mortgaged Property and the rents and all rights to collect rents under such
Leases), subject only to Permitted Liens.
Except for any Permitted Liens, there are no Liens or claims for work,
labor or materials


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affecting any Mortgaged Property which are or may be
prior to, subordinate to, or of equal priority with, the Liens created by the
Loan Documents.  The Permitted Liens do
not have, and may not reasonably be expected to have, a Material Adverse
Effect.


               (b)          Impositions.
 The Borrower Parties have filed all property
and similar tax returns required to have been filed by it with respect to each
Mortgaged Property and has paid and discharged, or caused to be paid and
discharged, all installments for the payment of all Taxes due to date, and all
other material Impositions imposed against, affecting or relating to each
Mortgaged Property other than those which have not become due, together with
any fine, penalty, interest or cost for nonpayment pursuant to such returns or
pursuant to any assessment received by it, provided, however, that if the
Borrower Parties contest in good faith and by appropriate proceeding the
validity or applicability of any Imposition, provides to the Lender security in
such amount and in such form as the Lender may reasonably require, then
compliance with the Imposition in question shall be suspended during the
pendency of such contest.  The Borrower
Parties have no knowledge of any new proposed Tax, levy or other governmental
or private assessment or charge in respect of any Mortgaged Property which has
not been disclosed in writing to the Lender.


               (c)          Zoning.
 Each Mortgaged Property complies in all
material respects with all Applicable Laws affecting such Mortgaged
Property.  Without limiting the
foregoing, all material Permits, including certificates of occupancy, to the
extent issued by the relevant jurisdiction, have been issued and are in full
force and effect. Neither the Borrower Parties nor, to the knowledge of the
Borrower Parties, any former owner of any Mortgaged Property, has received any
written notification or threat of any actions or proceedings regarding the
noncompliance or nonconformity of any Mortgaged Property with any Applicable
Laws or Permits, nor are the Borrower Parties otherwise aware of any such
pending actions or proceedings.


               (d)          Leases.
 The Borrower Parties have delivered to the
Lender a true and correct copy of their form apartment lease for each Mortgaged
Property (and, with respect to leases executed prior to the date on which the
Borrower Parties first owned the Mortgaged Property, the form apartment lease
used for such leases), and each Lease with respect to such Mortgaged Property
is in the form thereof, with no material modifications thereto, except as
previously disclosed in writing to the Lender.
Except as set forth in a Rent Roll, no Lease for any unit in any
Mortgaged Property (i) is for a term in excess of one year, including any
renewal or extension period unless such renewal or extension period is subject
to termination by the Borrower Parties upon not more than 30 days’ written
notice, (ii) provides for prepayment of more than one month’s rent, or (iii)
was entered into in other than the ordinary course of business.


               (e)          Rent
Roll.  The Borrower Parties have
executed and delivered to the Lender a Rent Roll for each Mortgaged Property,
each dated as of and delivered within 30 days prior to the Closing Date.  Each Rent Roll sets forth each and every
unit subject to a Lease which is in full force and effect as of the date of
such Rent Roll.  The information set
forth on each Rent Roll is true, correct and complete in all material respects
as of its date and there has occurred no material adverse change in the information
shown on any Rent Roll from the date of each such Rent Roll to the Closing
Date.  Except as disclosed in the Rent
Roll with respect to each


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Mortgaged Property or otherwise previously disclosed
in writing to the Lender, no Lease is in effect as of the date of the Rent Roll
with respect to such Mortgaged Property.


               (f)          Status
of Landlord under Leases.  Except
for any assignment of leases and rents which is a Permitted Lien or which is to
be released in connection with the consummation of the transactions contemplated
by this Agreement, the relevant Borrower Party is the owner and holder of the
landlord’s interest under each of the Leases of units in each Mortgaged
Property and there are no prior outstanding assignments of any such Lease, or
any portion of the rents, additional rents, charges, issues or profits due and
payable or to become due and payable thereunder.


               (g)          Enforceability
of Leases.  Each Lease constitutes
the legal, valid and binding obligation of the Borrower Parties and, to the
knowledge of the Borrower Parties, of each of the other parties thereto,
enforceable in accordance with its terms, subject only to bankruptcy,
insolvency, reorganization or other similar laws relating to creditors’ rights
generally, and equitable principles, and except as disclosed in writing to the
Lender, no notice of any default by the Borrower Parties which remains uncured
has been sent by any tenant under any such Lease, other than defaults which do
not have, and are not reasonably expected to have, a Material Adverse Effect on
the Mortgaged Property subject to the Lease.


               (h)          No
Lease Options.  All premises demised
to tenants under Leases are occupied by such tenants as tenants only.  No Lease contains any option or right to
purchase, right of first refusal or any other similar provisions.  No option or right to purchase, right of
first refusal, purchase contract or similar right exists with respect to any
Mortgaged Property.


               (i)          Insurance.
 The Borrower Parties have delivered to the
Lender  true and correct certified
copies of all Insurance Policies currently in effect as of the date of this
Agreement with respect to the Mortgaged Property which it owns.  Each such Insurance Policy complies in all
material respects with the requirements set forth in the Loan Documents.


               (j)          Tax
Parcels.  Each Mortgaged Property is
on one or more separate tax parcels, and each such parcel (or parcels) is (or
are) separate and apart from any other property.


               (k)          Encroachments.
 Except as disclosed on the Survey with
respect to each Mortgaged Property, none of the improvements located on any
Mortgaged Property encroaches upon the property of any other Person or upon any
easement encumbering the Mortgaged Property, nor lies outside of the boundaries
and building restriction lines of such Mortgaged Property and no improvement
located on property adjoining such Mortgaged Property lies within the
boundaries of or in any way encroaches upon such Mortgaged Property.


               (l)          Independent
Unit.  Except for Permitted Liens
and as disclosed on Exhibit BB to this Agreement, or as disclosed in a
Title Insurance Policy or Survey for the Mortgaged Property, each Mortgaged Property
is an independent unit which does not rely on any drainage, sewer, access,
parking, structural or other facilities located on any Property not included
either in such Mortgaged Property or on public or utility easements for the
(i) fulfillment of any zoning, building code or other requirement of any
Governmental Authority that has jurisdiction over such Mortgaged Property, (ii)
structural support, or (iii) the fulfillment of the requirements of


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any Lease or other agreement affecting such Mortgaged
Property.  The relevant Borrower Party,
directly or indirectly, has the right to use all amenities, easements, public
or private utilities, parking, access routes or other items necessary or
currently used for the operation of each Mortgaged Property.  All public utilities are installed and
operating at each Mortgaged Property and all billed installation and connection
charges have been paid in full.  Each
Mortgaged Property is either (x) contiguous to or (y) benefits from an
irrevocable unsubordinated easement permitting access from such Mortgaged
Property to a physically open, dedicated public street, and has all necessary
permits for ingress and egress and is adequately serviced by public water,
sewer systems and utilities.  No
building or other improvement not located on a Mortgaged Property relies on any
part of the Mortgaged Property to fulfill any zoning requirements, building
code or other requirement of any Governmental Authority that has jurisdiction
over the Mortgaged Property, for structural support or to furnish to such
building or improvement any essential building systems or utilities.


               (m)          Condition
of the Mortgaged Properties.  Except
as disclosed in any third party report delivered to the Lender prior to the date
on which a Borrower Party’s Mortgaged Property is added to the Collateral Pool,
or otherwise disclosed in writing by the relevant Borrower Party to the Lender
prior to such date, each Mortgaged Property is in good condition, order and
repair, there exist no structural or other material defects in such Mortgaged
Property (whether patent or, to the best knowledge of the relevant Borrower
Party, latent or otherwise) and the relevant Borrower Party has not received
notice from any insurance company or bonding company of any defects or
inadequacies in such Mortgaged Property, or any part of it, which would
adversely affect the insurability of such Mortgaged Property or cause the
imposition of extraordinary premiums or charges for insurance or of any
termination or threatened termination of any policy of insurance or bond.  No claims have been made against any
contractor, architect or other party with respect to the condition of any
Mortgaged Property or the existence of any structural or other material defect
therein.  No Mortgaged Property has been
materially damaged by casualty which has not been fully repaired or for which
insurance proceeds have not been received or are not expected to be received
except as previously disclosed in writing to the Lender.  There are no proceedings pending for partial
or total condemnation of any Mortgaged Property except as disclosed in writing
to the Lender.


SECTION 12.03  Representations
and Warranties of the Lender.  The Lender hereby represents and warrants to
the Borrower Parties as follows:


               (a)          Due
Organization.  The Lender is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.


               (b)          Power
and Authority.  The Lender has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement.


               (c)          Due
Authorization.  The execution and
delivery by the Lender of this Agreement, and the consummation by it of the
transactions contemplated thereby, and the performance by it of its obligations
thereunder, have been duly and validly authorized by all necessary action and
proceedings by it or on its behalf.


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ARTICLE XIII

AFFIRMATIVE COVENANTS OF THE BORROWER PARTIES


Each Borrower Party, with respect to itself,  agrees and covenants with the Lender that,
at all times during the Term of this Agreement:


SECTION 13.01  Compliance
with Agreements.  The Borrower Party shall comply with all the
terms and conditions of each Loan Document to which it is a party or by which
it is bound; provided, however, that the Borrower Party’s failure to comply
with such terms and conditions shall not be an Event of Default until the
expiration of the applicable notice and cure periods, if any, specified in the
applicable Loan Document.


SECTION 13.02  Maintenance
of Existence.  The
Borrower Party shall maintain its existence and continue to be a limited
partnership or corporation, as the case may be, organized under the laws of the
state of its organization.  The Borrower
Party shall continue to be duly qualified to do business in each jurisdiction
in which such qualification is necessary to the conduct of its business and
where the failure to be so qualified would adversely affect the validity of,
the enforceability of, or the ability to perform, its obligations under this
Agreement or any other Loan Document.


SECTION 13.03  Maintenance
of REIT Status.  During the Term of this Agreement, the REIT
shall qualify, and be taxed as, a real estate investment trust under Subchapter
M of the Internal Revenue Code, and will not be engaged in any activities which
would jeopardize such qualification and tax treatment.


SECTION 13.04  Financial
Statements; Accountants’ Reports; Other Information.   The Borrower Party shall keep and maintain
at all times complete and accurate books of accounts and records in sufficient
detail to correctly reflect (x) all of the Borrower Party’s financial
transactions and assets and (y) the results of the operation of each
Mortgaged Property and copies of all written contracts, Leases and other
instruments which affect each Mortgaged Property (including all bills, invoices
and contracts for electrical service, gas service, water and sewer service,
waste management service, telephone service and management services).  In addition, the Borrower Parties shall
furnish, or cause to be furnished, to the Lender:


               (a)          Annual
Financial Statements.  As soon as
available, and in any event within 90 days after the close of its fiscal year
during the Term of this Agreement, the audited balance sheet of the REIT and
its Subsidiaries as of the end of such fiscal year, the  audited statement of income, equity and
retained earnings of the REIT and its Subsidiaries for such fiscal year and the
audited statement of cash flows of the REIT and its Subsidiaries for such
fiscal year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior fiscal
year, prepared in accordance with GAAP, consistently applied, and accompanied
by a certificate of the REIT’s independent certified public accountants to the
effect that such financial statements have been prepared in accordance with
GAAP, consistently applied, and that such financial statements fairly present
the results of its operations and financial condition for the periods and dates
indicated, with such certification to be free of exceptions and qualifications
as to the scope of the audit or as to the going concern nature of the business.


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               (b)          Quarterly
Financial Statements.  As soon as
available, and in any event within 45 days after each of the first three fiscal
quarters of each fiscal year during the Term of this Agreement, the unaudited
balance sheet of the REIT and its Subsidiaries as of the end of such fiscal
quarter, the unaudited statement of income and retained earnings of the REIT
and its Subsidiaries and the unaudited statement of cash flows of the REIT and
its Subsidiaries for the portion of the fiscal year ended with the last day of
such quarter, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the previous fiscal
year, accompanied by a certificate of the Chief Financial Officer of the REIT
to the effect that such financial statements have been prepared in accordance
with GAAP, consistently applied, and that such financial statements fairly
present the results of its operations and financial condition for the periods
and dates indicated subject to year end adjustments in accordance with GAAP.


               (c)          Quarterly
Property Statements.  As soon as
available, and in any event within 45 days after each Calendar Quarter, a
statement of income and expenses of each Mortgaged Property accompanied by a
certificate of the Chief Financial Officer of the REIT to the effect that each
such statement of income and expenses fairly, accurately and completely
presents the operations of each such Mortgaged Property for the period
indicated.


               (d)          Annual
Property Statements.  On an annual
basis within forty-five (45) days of the end of its fiscal year, an annual
statement of income and expenses of each Mortgaged Property accompanied by a
certificate of the Chief Financial Officer of the REIT to the effect that each
such statement of income and expenses fairly, accurately and completely
presents the operations of each such Mortgaged Property for the period
indicated.


               (e)          Updated
Rent Rolls.  Upon the Lender’s
request (but not more frequently than quarterly), a current Rent Roll for each
Mortgaged Property, showing the name of each tenant, and for each tenant, the
space occupied, the lease expiration date, the rent payable, the rent paid and
any other information requested by the Lender and accompanied by a certificate
of the Chief Financial Officer of the REIT to the effect that each such Rent
Roll fairly, accurately and completely presents the information required
therein.


               (f)          Security
Deposit Information.  Upon the
Lender’s request, an accounting of all security deposits held in connection
with any Lease of any part of any Mortgaged Property, including the name and
identification number of the accounts in which such security deposits are held,
the name and address of the financial institutions in which such security
deposits are held and the name and telephone number of the person to contact at
such financial institution, along with any authority or release necessary for
the Lender to access information regarding such accounts.


               (g)          Security
Law Reporting Information.  So long
as the REIT is a reporting company under the Securities and Exchange Act of
1934, promptly upon becoming available, (a) copies of all financial statements,
reports and proxy statements sent or made available generally by any Borrower
Party, or any of its Affiliates, to their respective security holders, (b) all
regular and periodic reports and all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or a similar form)
and prospectuses, if any, filed by any Borrower Party, or any of its
Affiliates, with the Securities and Exchange Commission or other


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Governmental Authorities, and (c) all statements made
available generally by any Borrower Party, or any of their Affiliates, to the
public concerning material developments in the business of the REIT or other
party.


               (h)          Accountants’
Reports.  Promptly upon receipt
thereof, copies of any reports or management letters submitted to the Borrower
Party by its independent certified public accountants in connection with the
examination of its financial statements made by such accountants (except for
reports otherwise provided pursuant to subsection (a) above); provided,
however, that the Borrower Party shall only be required to deliver such reports
and management letters to the extent that they relate to any Borrower Party or
any Mortgaged Property.


               (i)          Annual
Budgets.  Promptly, and in any event
within 60 days after the start of its fiscal year, an annual budget for each
Mortgaged Property for such fiscal year, setting forth an estimate of all of
the costs and expenses, including capital expenses, of maintaining and
operating each Mortgaged Property.


               (j)          REIT
Plans and Projections.  If prepared
by the REIT, within 90 days after the beginning of each fiscal year, copies of
(1) the REIT’s business plan for the current and the succeeding two fiscal
years, (2) the REIT’s annual budget (including capital expenditure budgets) and
projections for each Mortgaged Property; and (3) the REIT’s financial
projections for the current and the succeeding two fiscal years, as prepared by
the REIT’s Chief Financial Officer and in a format and with such detail as the
Lender may require.


               (k)          Strategic
Plan.  Within 90 days after the end
of each fiscal year of the REIT, the REIT shall deliver to the Lender a written
narrative discussing the REIT’s publicly disclosed short and long range plans,
including its plans for operations, mergers, acquisitions and management, and
accompanied by supporting financial projections and schedules, certified by a
member of Senior Management as true, correct and complete (“Strategic
Plan”)  If the REIT’s or
any other Borrower Party’s Strategic Plan materially changes, then such person
shall deliver to the Lender the Strategic Plan as so changed.


               (l)          Annual
Rental and Sales Comparable Analysis.
Within 30 days after the Lender’s request, a rental and sales comparable
analysis of the local real estate market in which each Mortgaged Property is
located, in a form approved by the Lender.


               (m)          Federal
Tax Returns.  Upon request of
Lender, the Federal Tax Returns of the REIT.


               (n)          Other
Reports.  Promptly upon receipt
thereof, all schedules, financial statements or other similar reports delivered
by the Borrower Party pursuant to the Loan Documents or requested by the Lender
with respect to the Borrower Party’s business affairs or condition (financial
or otherwise) or any of the Mortgaged Properties.


               (o)          Certification.
 All certifications required to be delivered
pursuant to this Section 13.04 shall run directly to and be for the benefit of
Lender and Fannie Mae.


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SECTION 13.05  Certificate
of Compliance.  The
Borrower Party shall deliver to the Lender concurrently with the delivery of
the financial statements and/or reports required to be delivered pursuant to
Section 13.04 (a) and (b) above a certificate signed by the Chief Financial
Officer of the REIT stating that, to the best knowledge of such individual
following reasonable inquiry, (i) setting forth in reasonable detail the
calculations required to establish whether each Borrower Party was in
compliance with the requirements of Sections 15.02 through 15.08 on the date of
such financial statements, and (ii) stating that, to the best knowledge of such
individual following reasonable inquiry, no Event of Default or Potential Event
of Default has occurred, or if an Event of Default or Potential Event of
Default has occurred, specifying the nature thereof in reasonable detail and
the action which the relevant Borrower Party is taking or proposes to take with
respect thereto.  Any certificate
required by this Section 13.05 shall run directly to and be for the benefit of
Lender and Fannie Mae.


SECTION 13.06  Maintain
Licenses.  The Borrower Party shall procure and
maintain in full force and effect all licenses, Permits, charters and
registrations which are material to the conduct of its business and shall abide
by and satisfy all terms and conditions of all such licenses, Permits, charters
and registrations.


SECTION 13.07  Access
to Records; Discussions With Officers and Accountants.  To the extent permitted by law and in
addition to the applicable requirements of the Security Instruments, the
Borrower Party shall permit the Lender:


               (a)          to
inspect, make copies and abstracts of, and have reviewed or audited, such of
the Borrower Party’s books and records as may relate to the Obligations or any
Mortgaged Property;


               (b)          to
discuss the Borrower Party’s affairs, finances and accounts with any of the
Borrower Party’s officers, partners and employees;


               (c)          to
discuss the Mortgage Properties’ conditions, operations or maintenance with the
managers of such Mortgaged Properties and the officers and employees of the
Borrower Party;


               (d)          to
discuss the Borrower Party’s affairs, finances and accounts with its
independent public accountants; and


               (e)          to
receive any other information that the Lender deems reasonably necessary or
relevant in connection with any Advance, any Loan Document or the Obligations.


Notwithstanding the foregoing, prior to an Event of
Default or Potential Event of Default and in the absence of an emergency, all
inspections shall be conducted at reasonable times during normal business hours
upon reasonable notice to the Borrower Parties.


SECTION 13.08  Inform
the Lender of Material Events.  The Borrower Party shall promptly inform the
Lender in writing of any of the following (and shall deliver to the Lender
copies of any related written communications, complaints, orders, judgments and
other documents relating to the following) of which the Borrower Party has
actual knowledge:


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               (a)          Defaults.
 The occurrence of any Event of Default or
any Potential Event of Default under this Agreement or any other Loan Document;


               (b)          Regulatory
Proceedings.  The commencement of
any rulemaking or disciplinary proceeding or the promulgation of any proposed
or final rule which would have, or may reasonably be expected to have, a
Material Adverse Effect;


               (c)          Legal
Proceedings.  The commencement or
threat of, or amendment to, any proceedings by or against the Borrower Party in
any Federal, state or local court or before any Governmental Authority, or
before any arbitrator, which, if adversely determined, would have, or at the
time of determination may reasonably be expected to have, a Material Adverse
Effect;


               (d)          Bankruptcy
Proceedings.  The commencement of
any proceedings by or against the Borrower Party under any applicable
bankruptcy, reorganization, liquidation, insolvency or other similar law now or
hereafter in effect or of any proceeding in which a receiver, liquidator,
trustee or other similar official is sought to be appointed for it;


               (e)          Regulatory
Supervision or Penalty.  The receipt
of notice from any Governmental Authority having jurisdiction over the Borrower
Party that (A) the Borrower Party is being placed under regulatory supervision,
(B) any license, Permit, charter, membership or registration material to the
conduct of the Borrower Party’s business or the Mortgaged Properties is to be
suspended or revoked or (C) the Borrower Party is to cease and desist any
practice, procedure or policy employed by the Borrower Party, as the case may
be, in the conduct of its business, and such cessation would have, or may
reasonably be expected to have, a Material Adverse Effect;


               (f)          Environmental
Claim.  The receipt from any
Governmental Authority or other Person of any notice of violation, claim,
demand, abatement, order or other order or direction (conditional or otherwise)
for any damage, including personal injury (including sickness, disease or
death), tangible or intangible property damage, contribution, indemnity,
indirect or consequential damages, damage to the environment, pollution,
contamination or other adverse effects on the environment, removal, cleanup or
remedial action or for fines, penalties or restrictions, resulting from or
based upon (a) the existence or occurrence, or the alleged existence or
occurrence, of a Hazardous Substance Activity or (b) the violation, or alleged
violation, of any Hazardous Materials Laws in connection with any Mortgaged
Property or any of the other assets of a Borrower Party;


               (g)          Material
Adverse Effects.  The occurrence of
any act, omission, change or event which has a Material Adverse Effect,
subsequent to the date of the most recent audited financial statements of the
Borrower Parties delivered to the Lender pursuant to Section 13.04;


               (h)          Accounting
Changes.  Any material change in any
Borrower Party’s accounting policies or financial reporting practices;


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               (i)          Legal
and Regulatory Status.  The
occurrence of any act, omission, change or event, including any Governmental
Approval, the result of which is to change or alter in any way the legal or
regulatory status of any Borrower Party; and


               (j)          Default
on Indebtedness.  The occurrence of
any event that results in or could result in (i) any imminent default, default
or waiver of default in respect of any Indebtedness having an unpaid principal
balance of $1,000,000 or more, (ii) the failure of any Borrower Party to pay
when due or within any applicable grace period any Indebtedness of any Borrower
Party, or (iii) any Indebtedness of any Borrower Party becoming due and payable
before its normal maturity by reason of a default or event of default, however
described, or any other event of default shall occur and continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness.


SECTION 13.09  Intentionally
Omitted.


SECTION 13.10  Inspection.  The Borrower Party shall permit any Person
designated by the Lender:  (i) to make
entries upon and inspections of the Mortgaged Properties; and (ii) to otherwise
verify, examine and inspect the amount, quantity, quality, value and/or
condition of, or any other matter relating to, any Mortgaged Property; provided,
however, that prior to an Event of Default or Potential Event of Default
and in the absence of an emergency, all such entries, examinations and
inspections shall be conducted at reasonable times during normal business hours
upon reasonable notice to the Borrower Party.


SECTION 13.11  Compliance
with Applicable Laws.  The Borrower Party shall comply in all
material respects with all Applicable Laws now or hereafter affecting any
Mortgaged Property or any part of any Mortgaged Property or requiring any
alterations, repairs or improvements to any Mortgaged Property.  The Borrower Party shall procure and
continuously maintain in full force and effect, and shall abide by and satisfy
all material terms and conditions of all Permits.


SECTION 13.12  Warranty
of Title.  The relevant Borrower Party shall warrant
and defend (a) the title to each Mortgaged Property and every part of each
Mortgaged Property, subject only to Permitted Liens, and (b) the validity and
priority of the lien of the applicable Loan Documents, subject only to
Permitted Liens, in each case against the claims of all Persons
whatsoever.  The Borrower Parties shall
reimburse the Lender for any losses, costs, damages or expenses (including
reasonable attorneys’ fees and court costs) incurred by the Lender if an
interest in any Mortgaged Property, other than with respect to a Permitted
Lien, is claimed by others.


SECTION 13.13  Defense
of Actions.  The Borrower Party shall appear in and
defend any action or proceeding purporting to affect the security for this
Agreement or the rights or power of the Lender hereunder, and shall pay all
costs and expenses, including the cost of evidence of title and reasonable
attorneys’ fees, in any such action or proceeding in which the Lender may
appear.  If the Borrower Party fails to
perform any of the covenants or agreements contained in this Agreement, or if
any action or proceeding is commenced that is not diligently defended by the
Borrower Party which affects in any material respect the Lender’s interest in
any Mortgaged Property or any part thereof, including eminent domain, code
enforcement or proceedings of any nature whatsoever under any Applicable Law,
whether now existing or hereafter enacted or amended, then the Lender may, but
without obligation to do so and without notice to or demand


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upon the Borrower Party and without releasing the
Borrower Party from any Obligation, make such appearances, disburse such sums
and take such action as the Lender deems necessary or appropriate to protect
the Lender’s interest, including disbursement of attorney’s fees, entry upon
such Mortgaged Property to make repairs or take other action to protect the
security of said Mortgaged Property, and payment, purchase, contest or
compromise of any encumbrance, charge or lien which in the judgment of the
Lender appears to be prior or superior to the Loan Documents.  In the event (i) that any Security
Instrument is foreclosed in whole or in part or that any Loan Document is put
into the hands of an attorney for collection, suit, action or foreclosure, or
(ii) of the foreclosure of any mortgage, deed to secure debt, deed of trust or
other security instrument prior to or subsequent to any Security Instrument or
any Loan Document in which proceeding the Lender is made a party or (iii) of
the bankruptcy of the Borrower Party or an assignment by the Borrower Party for
the benefit of their respective creditors, the Borrower Party shall be
chargeable with and agrees to pay all reasonable costs of collection and
defense, including actual attorneys’ fees in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.


SECTION 13.14  Alterations
to the Mortgaged Properties.  Except as otherwise provided in the Loan
Documents, the Borrower Party shall have the right to undertake any alteration,
improvement, demolition, removal or construction (collectively, “Alterations”)
to the Mortgaged Property which it owns without the prior consent of the
Lender; provided, however,that in any case, no such Alteration shall be
made to any Mortgaged Property without the prior written consent of the Lender
if (i) such Alteration could reasonably be expected to adversely affect the
value of such Mortgaged Property or its operation as a multifamily housing
facility in substantially the same manner in which it is being operated on the
date such property became Collateral, (ii) the construction of such Alteration
could reasonably be expected to result in interference to the occupancy of
tenants of such Mortgaged Property such that tenants in occupancy with respect
to five percent (5%)or more of the Leases would be permitted
to terminate their Leases or to abate the payment of all or any portion of
their rent, or (iii) such Alteration will be completed in more than 12 months
from the date of commencement or in the last year of the Term of this
Agreement.  Notwithstanding the
foregoing, the Borrower Party must obtain the Lender’s prior written consent to
construct Alterations with respect to the Mortgaged Property costing in excess
of, with respect to any Mortgaged Property, the number of units in such
Mortgaged Property multiplied by $2,000, but in any event, costs in excess of
$350,000 and the Borrower Party must give prior written notice to the Lender of
its intent to construct Alterations with respect to such Mortgaged Property
costing in excess of $150,000; provided, however, that the preceding
requirements shall not be applicable to Alterations made, conducted or
undertaken by the Borrower Party as part of the Borrower Party’s routine
maintenance and repair of the Mortgaged Properties as required by the Loan
Documents.


SECTION 13.15  ERISA.  The Borrower Party shall at all times remain
in compliance in all material respects with all applicable provisions of ERISA,
similar requirements of the PBGC, and the provisions set forth in Section
12.01(j) of this Agreement.


SECTION 13.16  Loan
Document Taxes.  If any tax, assessment or Imposition (other
than a franchise tax or excise tax imposed on or measured by, the net income or
capital (including branch profits tax) of the Lender (or any transferee or
assignee thereof, including a participation


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holder)) (“Loan Document Taxes”) is levied,
assessed or charged by the United States, or any State in the United States, or
any political subdivision or taxing authority thereof or therein upon any of
the Loan Documents or the obligations secured thereby, the interest of the
Lender in the Mortgaged Properties, or the Lender by reason of or as holder of
the Loan Documents, the Borrower Party shall pay all such Loan Document Taxes
to, for, or on account of the Lender (or provide funds to the Lender for such
payment, as the case may be) as they become due and payable and shall promptly
furnish proof of such payment to the Lender, as applicable.  In the event of passage of any law or
regulation permitting, authorizing or requiring such Loan Document Taxes to be
levied, assessed or charged, which law or regulation in the opinion of counsel
to the Lender may prohibit the Borrower Party from paying the Loan Document
Taxes to or for the Lender, the Borrower Party shall enter into such further
instruments as may be permitted by law to obligate the Borrower Party to pay
such Loan Document Taxes.


SECTION 13.17  Further
Assurances.  The Borrower Party, at the request of the
Lender, shall execute and deliver and, if necessary, file or record such
statements, documents, agreements, UCC financing and continuation statements
and such other instruments and take such further action as the Lender from time
to time may request as reasonably necessary, desirable or proper to carry out
more effectively the purposes of this Agreement or any of the other Loan
Documents or to subject the Collateral to the lien and security interests of
the Loan Documents or to evidence, perfect or otherwise implement, to assure
the lien and security interests intended by the terms of the Loan Documents or
in order to exercise or enforce its rights under the Loan Documents.


SECTION 13.18  Monitoring
Compliance.  Upon the request of the Lender, from time to
time, the Borrower Party shall promptly provide to the Lender such documents,
certificates and other information as may reasonably be deemed necessary to
enable the Lender to perform its functions under the Servicing Agreement.


SECTION 13.19  Leases.  Each unit in each Mortgaged Property will be
leased pursuant to the form lease delivered to, and acceptable to, the Lender,
with no material modifications to such approved form lease, except as disclosed
in writing to the Lender.


SECTION 13.20  Intentionally
Omitted.


SECTION 13.21 Transfer of Ownership Interests of
the Borrower Parties.


               (a)          Prohibition
on Transfers.  Subject to paragraph
(b) of this Section 13.21, the Borrower Parties shall not cause or permit a
Transfer or a Change of Control.


               (b)          Permitted
Transfers.  Notwithstanding the
provisions (a) of this Section 13.21, the following Transfers by the Borrower
Parties are permitted without the consent of the Lender:


	
   

  	
   

  
	
   

  	
                     (i)          A
  Transfer that occurs by inheritance, devise, or bequest or by operation of
  law upon the death of a natural person who is an owner of a Mortgaged
  Property or the owner of a direct or indirect ownership interest in the
  Borrower Parties.

  



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                     (ii)         The
  grant of a leasehold interest in individual dwelling units or commercial
  spaces in accordance with the Security Instrument.

  
	
   

  	
   

  
	
   

  	
                     (iii)        A
  sale or other disposition of obsolete or worn out personal property which is
  contemporaneously replaced by comparable personal property of equal or
  greater value which is free and clear of liens, encumbrances and security
  interests other than those created by the Loan Documents.

  
	
   

  	
   

  
	
   

  	
                     (iv)        The
  creation of a mechanic’s or materialmen’s lien or judgment lien against a
  Mortgaged Property which is released of record or otherwise remedied to
  Lender’s satisfaction within 30 days of the date of creation.

  
	
   

  	
   

  
	
   

  	
                     (v)          The
  grant of an easement, if prior to the granting of the easement the Borrower
  Parties cause to be submitted to Lender all information required by Lender to
  evaluate the easement, and if Lender consents to such easement based upon
  Lender’s determination that the easement will not materially affect the
  operation of the Mortgaged Property or Lender’s interest in the Mortgaged
  Property and Borrower Parties pay to Lender, on demand, all reasonable costs
  and expenses incurred by Lender in connection with reviewing Borrower Parties’
  request.  Lender shall not
  unreasonably withhold its consent to or withhold its agreement to subordinate
  the lien of a Security Instrument to (A) the grant of a utility easement
  serving a Mortgaged Property to a publicly operated utility, or (B) the grant
  of an easement related to expansion or widening of roadways, provided that
  any such easement is in form and substance reasonably acceptable to Lender
  and does not materially and adversely affect the access, use or marketability
  of a Mortgaged Property.

  
	
   

  	
   

  
	
   

  	
                     (vi)        The
  Transfer of shares of common stock, limited partnership interests or other
  beneficial or ownership interest or other forms of securities in the REIT or
  the OP, and the issuance of all varieties of convertible debt, equity and
  other similar securities of the REIT or the OP, and the subsequent Transfer
  of such securities; provided, however, that no Change in Control occurs as a
  result of such Transfer, either upon such Transfer or upon the subsequent
  conversion to equity or such convertible debt or other securities.

  
	
   

  	
   

  
	
   

  	
                     (vii)        The
  Transfer of limited partnership interests by the limited partners of Borrower
  Parties, including, without limitation, the conversion or exchange of limited
  partnership interests in Borrower Parties to shares of common stock or other
  beneficial or ownership interests or other forms of securities in the REIT;
  provided, however, that no Change in Control occurs as the result of such
  Transfer.

  
	
   

  	
   

  
	
   

  	
                     (viii)        The
  issuance by Borrower Parties of additional limited partnership units or
  convertible debt, equity and other similar securities, and the subsequent
  Transfer of such units or other securities; provided, however, that no Change
  in Control occurs as the result of such Transfer, either upon such Transfer
  or upon the subsequent conversion to equity of such convertible debt or other
  securities.

  



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                     (ix)          A
  merger with or acquisition of another entity by Borrower Parties, provided
  that (A) Borrower Parties are the surviving entity after such merger or
  acquisition, (B) no Change in Control occurs, and (C) such merger or
  acquisition does not result in an Event of Default, as such terms are defined
  in this Agreement.

  
	
   

  	
   

  
	
   

  	
                     (x)          A
  Transfer in connection with any substitution or release pursuant to the terms
  and conditions of Article VII of this Agreement.

  



               (c)          Consent
to Prohibited Transfers.  Lender
may, in its sole and absolute discretion, consent to a Transfer that would
otherwise violate this Section 13.21 if, prior to the Transfer, Borrower
Parties have satisfied each of the following requirements:


	
   

  	
   

  
	
   

  	
                      (i)          the
  submission to Lender of all information required by Lender to make the
  determination required by this Section 13.21(c);

  
	
   

  	
   

  
	
   

  	
                      (ii)         the
  absence of any Event of Default;

  
	
   

  	
   

  
	
   

  	
                      (iii)        the
  transferee meets all of the eligibility, credit, management and other
  standards (including any standards with respect to previous relationships
  between Lender and the transferee and the organization of the transferee)
  customarily applied by Lender at the time of the proposed Transfer to the
  approval of Borrower Parties in connection with the origination or purchase
  of similar mortgages, deeds of trust or deeds to secure debt on multifamily
  properties;

  
	
   

  	
   

  
	
   

  	
                      (iv)          in
  the case of a Transfer of direct or indirect ownership interests in Borrower
  Parties, if transferor or any other person has obligations under any Loan
  Documents, the execution by the transferee of one or more individuals or
  entities acceptable to Lender of an assumption agreement that is acceptable
  to Lender and that, among other things, requires the transferee to perform
  all obligations of transferor or such person set forth in such Loan Document,
  and may require that the transferee comply with any provisions of this
  Instrument or any other Loan Document which previously may have been waived
  by  Lender;

  
	
   

  	
   

  
	
   

  	
                      (v)          Lender’s
  receipt of all of the following:

  






	
   

  	
   

  
	
   

  	
                              (A)          a
  transfer fee equal to 1 percent of the Commitment immediately prior to the
  transfer.

  
	
   

  	
   

  
	
   

  	
                              (B)          In
  addition, Borrower Parties shall be required to reimburse Lender for all of
  Lender’s reasonable out-of-pocket costs (including reasonable attorneys’
  fees) incurred in reviewing the Transfer request.

  



SECTION 13.22  Change
in Senior Management.


               (a)          The
Borrower Parties shall give the Lender notice of any change in the identity of
Senior Management.


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               (b)          Within
30 Business Days after receipt of the Borrower Parties’ notice, the Lender
shall have the right to terminate this Agreement and the Credit Facility by
giving a notice of such termination to the Borrower Parties.  In such event, this Agreement and the Credit
Facility shall terminate with the same effect as if the Lender had approved a
Credit Facility Termination Request (including the Borrower Parties’
obligation, pursuant to Section 10.03(a), to pay in full all of the Notes
Outstanding on the Closing Date, including any other charges under the Notes),
except that, for these purposes, the Closing Date shall be the 180th day after
the date on which the Borrower Parties first receive the Lender’s termination
notice.


               (c)          If
the Lender exercises its termination right pursuant to subsection (b), the
Borrower Parties shall have a period of 120 days, commencing with the date on
which the Borrower Parties receives the Lender’s termination notice, to request
that the Lender rescind its termination notice. The Borrower Parties may
include in their request any undertakings which they are willing to make in
order to obtain such a rescission. The Lender shall give the Borrower Parties
notice of its acceptance or rejection of the Borrower Parties’ request within
30 Business Days after the Borrower Parties make the request.  If the Lender accepts the request, the
Lender shall give the Borrower Parties a notice that the termination notice
shall be deemed rescinded and of no further force or effect, and this Agreement
and the Credit Facility shall continue in accordance with, and subject to the
terms, conditions and limitations contained in, this Agreement.


SECTION 13.23  Date-Down
Endorsements.  At
any time and from time to time, a Lender may obtain an endorsement to each
Title Insurance Policy containing a Revolving Credit Endorsement, amending the
effective date of the Title Insurance Policy to the date of the title search
performed in connection with the endorsement.
The Borrower Parties shall pay for the cost and expenses incurred by the
Lender to the Title Company in obtaining such endorsement, provided that, for
each Title Insurance Policy, it shall not be liable to pay for more than one
such endorsement in any consecutive 12 month period.


SECTION 13.24  Geographical
Diversification.  The Borrower shall maintain Mortgaged
Properties in the Collateral Pool so that the Collateral Pool consists of at
least seven (7) Mortgaged Properties located in at least two (2) states and
five (5) SMSA’s, and provided, however, that, upon the occurrence of any
increase in the Commitment pursuant to Article VIII, the Borrower shall at all
times thereafter cause the Collateral Pool to satisfy such other Geographical
Diversification Requirements as the Lender may determine and notify Borrower of
at the time of the increase.


SECTION 13.25  Ownership
of Mortgaged Properties.  A Borrower Party shall be the sole owner of
each of the Mortgaged Properties free and clear of any Liens other than
Permitted Liens.


ARTICLE XIV

NEGATIVE COVENANTS OF THE BORROWER PARTIES


Each Borrower Party, with respect to itself, agrees
and covenants with the Lender that, at all times during the Term of this
Agreement:


SECTION 14.01  Other
Activities.  No Borrower Party shall:


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               (a)          engage
in any business or activity other than in connection with (i) the Ownership,
development, construction, management and operation of Multifamily Residential
Properties or other types of real property in which it has expertise and (ii)
activities related to the activities permitted in (i) above;


               (b)          amend
its Organizational Documents in any material respect without the prior written
consent of the Lender;


               (c)          dissolve
or liquidate in whole or in part;


               (d)          except
as otherwise provided in this Agreement, without the prior written consent of
Lender, merge or consolidate with any Person; or


               (e)          use,
or permit to be used, any Mortgaged Property for any uses or purposes other
than as a Multifamily Residential Property.


SECTION 14.02  Value
of Security.  The Borrower Party shall not take any action
which could reasonably be expected to have any Material Adverse Effect.


SECTION 14.03  Zoning.  The Borrower Party shall not initiate or
consent to any zoning reclassification of any Mortgaged Property or seek any
variance under any zoning ordinance or use or permit the use of any Mortgaged
Property in any manner that could result in the use becoming a nonconforming
use under any zoning ordinance or any other applicable land use law, rule or
regulation.


SECTION 14.04  Liens.  The Borrower Party shall not create, incur,
assume or suffer to exist any Lien on any Mortgaged Property or any part of any
Mortgaged Property, except the Permitted Liens.


SECTION 14.05  Sale.  Except in connection with a release of
Collateral in accordance with Article VII, the Borrower Party shall not
Transfer any Mortgaged Property or any part of any Mortgaged Property without
the prior written consent of the Lender (which consent may be granted or
withheld in the Lender’s discretion), or any interest in any Mortgaged Property,
other than to enter into Leases for units in a Mortgaged Property to any tenant
in the ordinary course of business.  For
so long as the Mortgaged Property commonly known as Paddock Park Ocala II and
located in Ocala, Florida is part of the Collateral Pool, the Borrower Party
shall not sell or otherwise transfer any Ownership Interest in the entity
owning  all or any part of the property
commonly known as Paddock Park Ocala I and located in Ocala, Florida (except
for any Transfer permitted under this Agreement) and any uncured default on any
indebtedness secured by such Multifamily Residential Property shall be a
default under this Agreement.  For so
long as either of the Mortgaged Properties commonly known as Paddock Club
Tallahassee I or Paddock Club Tallahassee II and each located in Tallahassee,
Florida, is part of the Collateral Pool, the Borrower Party shall not sell or
otherwise transfer all or any part of either such Mortgaged Property (except
for any Transfer permitted under this Agreement).


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SECTION 14.06 Indebtedness.  The Borrower Party shall not incur or be
obligated at any time with respect to any Indebtedness (other than Advances) in
connection with any of the Mortgaged Properties.


SECTION 14.07  Principal
Place of Business.  The Borrower Party shall not change its
principal place of business or the location of its books and records, each as
set forth in Section 12.01(a), without first giving 30 days’ prior written
notice to the Lender.


SECTION 14.08  Frequency
of Requests.  The
Borrower shall have the right, subject to the terms, conditions and limitations
of this Agreement, to make a Future Advance Request for a Variable Facility
Advance on any day until the expiration of the Variable Facility Availability
Period and to make a Future Advance Request for a Fixed Facility Advance on any
day until the expiration of the Fixed Facility Availability Period.


SECTION 14.09  Change
in Property Management.  The Borrower Parties shall not change the
management agent for any Mortgaged Property except to a management agent which
the Lender determines is qualified in accordance with the criteria set forth in
Section 701 of the DUS Guide.


SECTION 14.10  Condominiums.  The Borrower Parties shall not submit any
Mortgaged Property to a condominium regime during the Term of this Agreement.


SECTION 14.11  Restrictions
on Partnership Distributions.  The Borrower Party shall not make any
distributions of any nature or kind whatsoever to the owners of its Ownership
Interests as such if, at the time of such distribution, a Potential Event of
Default or an Event of Default has occurred and remains uncured.


SECTION 14.12  Lines
of Business.  The Borrower Party shall not be
substantially involved in any businesses other than the acquisition, ownership,
development, construction, leasing, financing or management, directly or
through Affiliates, of Multifamily Residential Properties, and the conduct of
these businesses shall not violate the Organizational Documents pursuant to
which it is formed.


SECTION 14.13  Limitation
on Unimproved Real Property and New Construction.  The Borrower Party shall not permit:


               (a)          the
value of its real property which is not improved (except real property on which
phases of a Mortgaged Property are contemplated to be constructed) by one or
more buildings leased, or held out for lease, to third parties (“Unimproved
Real Property”) to exceed 10% of the value of all of its “Real
Estate Assets” (as that term is defined in Section 856(c)(6)(B) of the Internal
Revenue Code and the regulations thereunder); and


               (b)          the
sum of (i) the value of its Unimproved Real Property and (ii) the value of its
Real Estate Assets which are under construction or subject to substantial
rehabilitation to exceed 20% of the value of all of its Real Estate Assets.


All of the foregoing values shall be reasonably
determined by the Lender.


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SECTION 14.14  Dividend
Payout.  The Borrower Party shall not make a dividend
payment (including both common stock dividends, unitholder distributions, and preferred stock dividends) which
is greater than ninety percent (90%) of Funds from Operations or that would
otherwise violate the United States federal tax laws governing the
qualifications of real estate investment trusts.  As used herein, “Funds from Operations” shall mean consolidated
net income of the REIT, including
minority interest (computed in accordance with GAAP), excluding gains
(or losses) from debt restructuring, sales of property, impairment charges,or
charges related to the adjustment to the value of assumed debt, plus real property depreciation and
goodwill amortization, before extraordinary or unusual items, and after
adjustments for unconsolidated partnerships and joint ventures.  Adjustments for unconsolidated partnerships
and joint ventures will be calculated to reflect Funds from Operations on the
same basis.  Upon written pre-approval
of the Lender, exceptions may be made where the Board of Directors of the REIT
determines, in good faith, that a special dividend must be paid to avoid taxes
due to excess gains from the sale of Multifamily Residential Properties.  In determining compliance with the dividend
payout ratio set forth herein, the amount of dividends paid and Funds from Operations
shall be calculated on a trailing 12-month period.


ARTICLE XV

FINANCIAL COVENANTS OF THE BORROWER PARTIES


Each Borrower Party agrees and covenants with the
Lender that, at all times during the Term of this Agreement:


SECTION 15.01  Financial
Definitions.  For all purposes of this Agreement, the
following terms shall have the respective meanings set forth below:


          “Consolidated
EBITDA” means, for any period, and without double counting any item, the
EBITDA for the Borrower Parties and their respective Subsidiaries for such
period on a consolidated basis.


          “Consolidated
EBITDA to Fixed Charges Ratio” means, for any period of determination, the
ratio (expressed as a percentage) of--


          (a)          the
excess of--


	
   

  	
   

  
	
   

  	
                (i)          the
  Consolidated EBITDA for the period, less

  
	
   

  	
   

  
	
   

  	
                (ii)         the
  Imputed Capital Expenditures for the period; 

              to

  



          (b)          the
Consolidated Fixed Charges for the period.


          “Consolidated
EBITDA to Interest Ratio” means, for any period of determination, the ratio
(expressed as a percentage) of--


                        (a)          the
excess of--


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  (i)          the
  Consolidated EBITDA for the period, less

  
	
   

  	
   

  
	
   

  	
  (ii)         the
  Imputed Capital Expenditures for the period;

  



          to


          (b)         the
Consolidated Interest Expense for the period.


          “Consolidated
Fixed Charges” means, for any period of determination, the sum of--


	
   

  	
  (a)          the
  Consolidated Interest Expense for the period;

  
	
 


	
   

  	
  (b)          the
  Consolidated Scheduled Amortization for the period; and

  
	
 


	
   

  	
  (c)          Preferred
  Distributions for the period.

  



               “Consolidated
Interest Expense” means, for any period of determination, and without
double counting any item, the sum of the Interest Expense for the Borrower
Parties and their respective Subsidiaries for such period on a consolidated
basis.


               “Consolidated
Scheduled Amortization” means, for any period of determination, and without
double counting any item, the sum of the Scheduled Amortization (but excluding
balloon payments) for the Borrower Parties and their respective Subsidiaries
for such period on a consolidated basis.


               “Consolidated
Total Assets” means, for any Person, all assets of such Person and its
Subsidiaries determined on a consolidated basis in accordance with GAAP;
provided that all assets composed of real property shall be valued on an
undepreciated cost basis and the portion of any joint venture assets owned by
such Person shall be included in Consolidated Total Assets.  The assets of a Person and its Subsidiaries
shall be adjusted to reflect such Person’s allocable share of such assets, for
the relevant period or as of the date of determination, taking into account (a)
the relative proportion of each such item derived from assets directly owned by
such Person and from assets owned by its Subsidiaries, and (b) such Person’s
respective ownership interest in its Subsidiaries.


               “Consolidated
Total Indebtedness” means, as of any date, and without double counting any
item, the Total Indebtedness for each Borrower Party and their respective
Subsidiaries as of such date (including the Total Indebtedness of the Borrower
Parties as of such date and the portion of any indebtedness of any joint
venture in which any Borrower Party or any Subsidiary thereof is a venturer
attributable to such Borrower Party or its Subsidiary).


               “EBITDA”
means, for any period, the sum determined in accordance with GAAP, of the
following, for any Person on a consolidated basis--


               (a)     the
net income (or net loss) of such Person during such Period, but excluding gains
and losses on the sale of fixed assets;


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                    (b)     all
amounts treated as expenses for depreciation, Interest Expense and the
amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss); and


                    (c)     all
accrued taxes on or measured by income to the extent included in the
determination of such net income (or loss);


                    provided,
however, that net income (or loss) shall be computed for these purposes
without giving effect to extraordinary losses or extraordinary gains.


                    “Imputed
Capital Expenditures” means, for any four (4) consecutive quarters, an
amount equal to the average number of apartment units owned by the Borrower
Parties or their Subsidiaries during such period multiplied by Three Hundred
Dollars ($300.00) per apartment unit, and for any period of less than four (4)
consecutive quarters, an appropriate proration of such figure.


                    “Interest
Expense” means, for any period, the sum of--


                    (a)     gross
interest expense for the period (including all commissions, discounts, fees and
other charges in connection with standby letters of credit and similar
instruments) for the Borrower Parties and their respective Subsidiaries; and


                    (b)     the
portion of the up-front costs and expenses for Rate Contracts entered into by
the Borrower Parties and their respective Subsidiaries (to the extent not included
in gross interest expense) fairly allocated to such Rate Contracts as expenses
for such period, as determined in accordance with GAAP;


                    (c)     provided,
that, all interest expense accrued by the Borrower Parties and their respective
Subsidiaries during such period, even if not payable on or before the Credit
Facility Termination Date, shall be included within “Interest Expense.”  Notwithstanding the foregoing, interest
accrued under any Intra-Company Debt shall not be included within “Interest
Expense” for any purposes hereof.


                    “Intra-Company
Debt” means Indebtedness (whether book-entry or evidenced by a term, demand
or other note or other instrument) owed by the Borrower Parties or any of their
respective Subsidiaries to any Subsidiary, and incurred or assumed for the
purpose of capitalizing a Subsidiary of the Borrower Parties.


                    “Management
Entity” means the REIT.


                    “Net
Worth” means, as of any specified date, for any Person, the excess of the
Person’s assets over the Person’s liabilities, determined in accordance with
GAAP but excluding any adjustment for
the fair value of swaps or caps, on a consolidated basis, provided that
all real property shall be valued on an undepreciated basis.


                    
“Pledged Cash” shall mean the amount held on deposit in the Pledgee
Account.


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                    “Preferred
Distributions” means, for any period, the amount of any and all
distributions due and payable to the holders of any form of preferred stock
(whether perpetual, convertible or otherwise) or other ownership or beneficial
interest in the REIT or any of its Subsidiaries that entitles the holders
thereof to preferential payment or distribution priority with respect to
dividends, assets or other payments over the holders of any other stock or other
ownership or beneficial interest in such Person.


                    “Rate
Contracts” means interest rate and currency swap agreements, cap, floor and
collar agreements, interest rate insurance, currency spot and forward contracts
and other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.


                    “Restricted
Cash” means the sum of Pledged Cash plus any cash pledged by the Borrower
Parties or any of their Subsidiaries to other lenders, as indicated in the line
item for “restricted cash” in the Borrower Parties’ balance sheet from time to
time.


                    
“Scheduled Amortization” means, with respect to any Person, the sum, as
of any date of determination, of the current portion (i.e., such portion as is
scheduled to be paid by the obligor thereof within 12 months from the date of
determination) of all regularly scheduled amortization payments due on such
Person’s long-term fully amortizing mortgage Indebtedness (exclusive of balloon
payments).


                    
“Stock” means all shares, options, warrants, interests, participations
or other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including common stock,
preferred stock, perpetual preferred stock or any other “equity security” (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities and
Exchange Act of 1934, and regulations promulgated thereunder).


                    
“Total Indebtedness” means, as of any date of determination, and in
respect of any Person, all outstanding Indebtedness, and shall include, without
limitation: (i) such Person’s share of the Indebtedness of any partnership or
joint venture in which such Person directly or indirectly holds any interest;
and (ii) any recourse or contingent obligations, directly or indirectly, of
such Person with respect to any Indebtedness of such partnership or joint
venture in excess of its proportionate share.
Notwithstanding the foregoing, (x) Intra-Company Debt, and (y) accounts
payable to trade creditors for goods and services and current operating
liabilities (not the result of the borrowing of money) incurred in the ordinary
course of business in accordance with customary terms and paid within the
specified time, shall be excluded from the calculation of “Total Indebtedness”
but shall not otherwise be excluded as Indebtedness for any other purpose hereof.


                    
“Unconsolidated Partnership” means any partnership or joint venture (a)
in which any Borrower Party or any Subsidiary of any Borrower Party holds an
interest which is not consolidated in the financial statements of the REIT or (b)
which is not a Subsidiary.


                    
“Wholly-Owned Subsidiary” means a Subsidiary of the Borrower Parties one
hundred percent (100%) of the Stock or other equity or other beneficial
interests (in the case of 


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Persons other than corporations) is owned directly or
indirectly by the Borrower Parties; provided, however, that where such term is
qualified with respect to a specific Person (e.g., “Wholly-Owned Subsidiary of the REIT”)
such terms means a Subsidiary one hundred percent (100%) of the Stock or other
equity or other beneficial interests (in the case of Persons other than
corporations) is owned directly or indirectly by the specified Person.


SECTION 15.02  Compliance
with Debt Service Coverage Ratios.
The Borrower Parties shall at all times maintain the Aggregate Debt
Service Coverage Ratio for the Trailing 12 Month Period so that it is not less
than 1.40:1.0.


SECTION 15.03  Compliance
with Loan to Value Ratios.  The
Borrower Parties shall at all times maintain the Aggregate Loan to Value Ratio
so that it is not greater than 65%.
Notwithstanding the foregoing, the parties hereby agree that if, as a
result of any annual Valuation performed pursuant to Section 5.04, the
Aggregate Loan to Value Ratio exceeds 65% but is not greater than 70%, such
Aggregate Loan to Value Ratio shall not be an Event of Default until the next
annual Valuation and determination of Aggregate Loan to Value Ratio is
performed, provided that Borrower shall pay an additional Variable Facility Fee
and Fixed Facility Fee of (x) if such non-compliance occurs during 2004, 9
basis points per annum for the period beginning on the date of the
determination and ending on December 31, 2004, and (y) if such non-compliance
occurs subsequent to December 31, 2004, the number of basis points to be
determined by Lender.


SECTION 15.04  Compliance
with Concentration Test.


                    
(a)     The Borrower Parties shall at all times
maintain the Collateral so that the aggregate Valuations of any group of
Mortgaged Properties located within a one mile radius shall not exceed 25% of
the aggregate Valuations of all Mortgaged Properties.


                    
(b)     The Borrower Parties shall at all times
maintain the Collateral so that the Valuation of any one Mortgaged Property
shall not exceed 20% of the aggregate Valuations of all Mortgaged Properties.


SECTION 15.05  Compliance
with REIT’s Net Worth Test.  The
REIT shall at all times maintain its Net Worth so that it is not less than the
highest Net Worth covenant required by any other financial institution where
the REIT maintains a bank line (whether secured or unsecured), but in no event
less than $550,000,000 plus 65% of proceeds (less all reasonable and customary
expenses and costs) of equity offerings, net of redemptions, consummated by the
REIT after August 22, 2002.


SECTION 15.06  Compliance
with REIT’s Total Indebtedness to Consolidated Total Assets Ratio.  The REIT shall not permit the ratio of
Consolidated Total Indebtedness to Consolidated Total Assets to exceed 60% at
any time.


SECTION 15.07  Compliance
with REIT’s Consolidated EBITDA to Interest Ratio.  The REIT shall not permit the Consolidated
EBITDA to Interest Ratio computed for any fiscal quarter to be less than 200%
for any period of four consecutive fiscal quarters (treated as a single
accounting period).




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SECTION 15.08  Compliance
with REIT’s Consolidated EBITDA to Fixed Charge Ratio.  The REIT shall not permit the Consolidated
EBITDA to Fixed Charges Ratio computed for any fiscal quarter or year to be
less than 150% for any period of four consecutive fiscal quarters (treated as a
single accounting period).



ARTICLE XVI

FEES


SECTION 16.01  Standby
Fee and Rate Preservation Fee. The Borrower shall pay the Standby Fee to
the Lender for the period from the date of this Agreement to the end of the
Term of this Agreement.  Unless Borrower
notifies Lender in writing by December 1, 2005 that it does not elect to pay
the Rate Preservation Fee, Borrower shall pay the Rate Preservation Fee to
Lender commencing on January 1, 2006.  If Borrower elects not to pay the
Rate Preservation Fee, such election shall be final.  Borrower may elect,
by at least 30 days’ written notice of such election by Borrower to Lender, to
no longer pay the Rate Preservation Fee, which election shall be
irrevocable.  Each of the Standby Fee and the Rate Preservation Fee shall
be payable monthly, in arrears, on the first Business Day following the end of
the month, except that the Standby Fee and Rate Preservation Fee for the last
month during the Term of this Agreement shall be paid on the last day of the
Term of this Agreement.


SECTION 16.02  Origination
Fees.


                    
(a)     Initial Origination Fee.  The Borrower has paid to the Lender an
origination fee (“Initial Origination Fee”) equal to the
product obtained by multiplying (i) the Commitment by (ii) .65%.


                    
(b)      Expansion Origination Fee.  Upon the closing of a Credit Facility
Expansion Request under Article VIII, the Borrower shall pay to the Lender an
origination fee (“Expansion Origination Fee”) equal to
the product obtained by multiplying (i) the increase in the Commitment made on
the Closing Date for the Credit Facility Expansion Request, by (ii) .65%.  The Borrower shall pay the Expansion Origination
Fee on or before the Closing Date for the Credit Facility Expansion
Request.  Any Expansion Origination Fee
shall be reduced by the amount of any Collateral Addition Fee paid by the
Borrower in respect of any Additional Mortgaged Properties added to the
Collateral Pool in conjunction with such expansion.


SECTION 16.03  Due
Diligence Fees.


                    
(a)     Initial Due Diligence Fees.  The Borrower has paid to the Lender due
diligence fees (“Initial Due Diligence Fees”) with respect to the Initial
Mortgaged Properties. 


                    
(b)     Additional Due Diligence Fees for
Additional and Substituted Collateral.
The Borrower shall pay to the Lender additional reasonable due diligence
fees (the “Additional Collateral Due Diligence Fees”) with respect to
each Additional and Substituted Mortgaged Property in an amount not to exceed
the sum of $16,000.  The Borrower shall
pay Additional Collateral Due Diligence Fees for the Additional or Substituted
Mortgaged Property to the Lender on the date on which it submits the Collateral
Addition or Substitution Request for the addition of the Additional or
Substituted Mortgaged Property to the Collateral Pool.


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SECTION 16.04  Legal
Fees and Expenses.


                    
(a)     Initial Legal Fees.  The Borrower shall pay, or reimburse the
Lender for, all out-of-pocket legal fees and expenses incurred by the Lender
and by Fannie Mae in connection with the preparation, review and negotiation of
this Agreement and any other Loan Documents executed on the date hereof.  The Borrower has paid Lender’s and Fannie
Mae’s legal fees in connection with the Initial Mortgaged Properties.  On the date of this Agreement, the Borrower
shall pay all such legal fees and expenses not previously paid or for which
funds have not been previously provided.


                    
(b)     Fees and Expenses Associated with Requests.  The Borrower shall pay, or reimburse the
Lender for, all reasonable costs and expenses incurred by the Lender, including
the out-of-pocket legal fees and expenses incurred by the Lender in connection
with the preparation, review and negotiation of all documents, instruments and
certificates to be executed and delivered in connection with each Request, the
performance by the Lender of any of its obligations with respect to the
Request, the satisfaction of all conditions precedent to the Borrower’s rights
or the Lender’s obligations with respect to the Request, and all transactions
related to any of the foregoing, including the cost of title insurance premiums
and applicable recordation and transfer taxes and charges and all other
reasonable costs and expenses in connection with a Request.  The obligations of the Borrower under this
subsection shall be absolute and unconditional, regardless of whether the
transaction requested in the Request actually occurs.  The Borrower shall pay such costs and expenses to the Lender on
the Closing Date for the Request, or, as the case may be, after demand by the
Lender when the Lender determines that such Request will not close.


SECTION 16.05  MBS-Related
Costs.  The Borrower shall pay to
the Lender, within 30 days after demand, all reasonable fees and expenses
incurred by the Lender or Fannie Mae in connection with the issuance of any MBS
backed by an Advance, including the fees charged by Depository Trust Company
and State Street Bank or any successor fiscal agent or custodian.


SECTION 16.06  Failure
to Close any Request.  If the
Borrower makes a Request and fails to close on the Request for any reason other
than the default by the Lender, then the Borrower shall pay to the Lender and
Fannie Mae all damages incurred by the Lender and Fannie Mae in connection with
the failure to close.


SECTION 16.07  Other
Fees.  The Borrower shall pay the
following additional fees and payments, if and when required pursuant to the
terms of this Agreement:


                    
(a)     The Collateral Substitution Fee, pursuant to
Section 7.04, in connection with the addition of a Substituted Mortgaged
Property to the Collateral Pool pursuant to Article VII;


                    
(b)     The Release Price, pursuant to Section
7.02(c), in connection with the release of a Mortgaged Property from the
Collateral Pool pursuant to Article VII;


                    
(c)     The Release Fee, pursuant to Section 7.03(c),
in connection with the release of a Mortgaged Property from the Collateral Pool
pursuant to Article VII;



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(d)     The Variable Facility Termination Fee,
pursuant to Section 9.03(b) in connection with a complete or partial
termination of the Variable Facility pursuant to Article IX; and


                    
(e)     The Variable Facility Termination Fee,
pursuant to Section 10.03(b), in connection with the termination of the Credit
Facility pursuant to Article X.


                    
(f)     The Collateral Addition Fee, pursuant to
Section 6.03(b), in connection with the addition of the Additional Mortgaged
Properties to the Collateral Pool pursuant to Article VI.


ARTICLE XVII

EVENTS OF DEFAULT


SECTION 17.01  Events
of Default.  Each of the following
events shall constitute an “Event of Default” under this Agreement, whatever
the reason for such event and whether it shall be voluntary or involuntary, or
within or without the control of a Borrower Party, or be effected by operation
of law or pursuant to any judgment or order of any court or any order, rule or
regulation of any Governmental Authority:


                    
(a)     the occurrence of a default under any Loan
Document beyond the cure period, if any, set forth therein; or


                    
(b)     the failure by the Borrower Parties to pay
when due any amount payable by the Borrower Parties under any Note, any
Mortgage, this Agreement or any other Loan Document, including any fees, costs
or expenses; or


                    
(c)     the failure by any Borrower Party to perform
or observe any covenant set forth in Article XIII or Article XIV within thirty
(30) days after prior written notice of such failure from Lender, provided that
such period shall be extended for up to 30 additional days if the Borrower
Party, in the discretion of the Lender, is diligently pursuing a cure of such
default within 30 days after receipt of notice from the Lender; or


                    
(d)     any warranty, representation or other written
statement made by or on behalf of a Borrower Party contained in this Agreement,
any other Loan Document or in any instrument furnished in compliance with or in
reference to any of the foregoing, is false or misleading in any material respect
on any date when made or deemed made; or


                    
(e)     any other Indebtedness in an aggregate amount
of $1,000,000 of any Borrower Party or assumed by any Borrower Party (i) is not
paid when due nor within any applicable grace period in any agreement or
instrument relating to such Indebtedness or (ii) becomes due and payable before
its normal maturity by reason of a default or event of default, however
described, or any other event of default shall occur and continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Indebtedness; or


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(f)     (i) A Borrower Party shall (A) commence a
voluntary case under the Federal bankruptcy laws (as now or hereafter in
effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, debt
adjustment, winding up or composition or adjustment of debts, (C) consent to or
fail to contest in a timely and appropriate manner any petition filed against
it in an involuntary case under such bankruptcy laws or other laws, (D) apply
for or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (E) admit in writing its inability to pay, or generally not be
paying, its debts as they become due, (F) make a general assignment for the
benefit of creditors, (G) assert that any Borrower Party has no liability
or obligations under this Agreement or any other Loan Document to which it is a
party; or (H) take any action for the purpose of effecting any of the
foregoing; or (ii) a case or other proceeding shall be commenced against a
Borrower Party in any court of competent jurisdiction seeking (A) relief under
the Federal bankruptcy laws (as now or hereafter in effect) or under any other
laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding upon or composition or adjustment of debts, or (B) the appointment of a
trustee, receiver, custodian, liquidator or the like of the Borrower Party, or
of all or a substantial part of the property, domestic or foreign, of the Borrower
Party and any such case or proceeding shall continue undismissed or unstayed
for a period of 60 consecutive calendar days, or any order granting the relief
requested in any such case or proceeding against the Borrower Party (including
an order for relief under such Federal bankruptcy laws) shall be entered; or


                    
(g)     if any provision of this Agreement or any
other Loan Document or the lien and security interest purported to be created
hereunder or under any Loan Document shall at any time for any reason cease to
be valid and binding in accordance with its terms on any Borrower Party, or
shall be declared to be null and void, or the validity or enforceability hereof
or thereof or the validity or priority of the lien and security interest
created hereunder or under any other Loan Document shall be contested by any
Borrower Party seeking to establish the invalidity or unenforceability hereof
or thereof, or any Borrower Party shall deny that it has any further liability
or obligation hereunder or thereunder; or


                    
(h)     (i) the execution by the Borrower Parties of a
chattel mortgage or other security agreement on any materials, fixtures or
articles used in the construction or operation of the improvements located on any
Mortgaged Property or on articles of personal property located therein, or (ii)
if any such materials, fixtures or articles are purchased pursuant to any
conditional sales contract or other security agreement or otherwise so that the
Ownership thereof will not vest unconditionally in the Borrower Parties free
from encumbrances, or (iii) if the Borrower Parties do not furnish to the
Lender upon request the contracts, bills of sale, statements, receipted
vouchers and agreements, or any of them, under which the Borrower Parties claim
title to such materials, fixtures, or articles; or


                    
(i)     the failure by any Borrower Party to comply
with any requirement of any Governmental Authority within 30 days after written
notice of such requirement shall have been given to the Borrower Party by such
Governmental Authority; provided that, if action is commenced and diligently
pursued by the Borrower Party within such 30 days, then the Borrower Party
shall have an additional 30 days to comply with such requirement; or


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(j)     a dissolution or liquidation for any reason
(whether voluntary or involuntary) of any Borrower Party; or


                    
(k)     any judgment against any Borrower Party, any
attachment or other levy against any portion of any Borrower Party’s assets
with respect to a claim or claims in an amount in excess of$500,000in the aggregate remains
unpaid, unstayed on appeal undischarged, unbonded, not fully insured or
undismissed for a period of 60 days; or


                    
(l)     the failure of the Borrower Parties to perform
or observe any of the Financial Covenants, which failure shall continue for a
period of 30 days after the date on which the Borrower Party receives a notice
from the Lender specifying the failure; or


                    
(m)      the failure of Borrower to maintain the
Hedges required by Article XXI of this Agreement; or


                    
(n)     the failure by any Borrower Party to perform
or observe any term, covenant, condition or agreement hereunder, other than as
set forth in subsections (a) through (l) above, or in any other Loan Document,
within 30 days after receipt of notice from the Lender identifying such
failure.


ARTICLE XVIII

REMEDIES


SECTION 18.01  Remedies;
Waivers.  Upon the occurrence of an
Event of Default, the Lender may do any one or more of the following (without
presentment, protest or notice of protest, all of which are expressly waived by
the Borrower Parties):


                    
(a)     by written notice to the Borrower Parties, to
be effective upon dispatch, terminate the Commitment and declare the principal
of, and interest on, the Advances and all other sums owing by the Borrower
Parties to the Lender under any of the Loan Documents forthwith due and
payable, whereupon the Commitment will terminate and the principal of, and
interest on, the Advances and all other sums owing by the Borrower Parties to
the Lender under any of the Loan Documents will become forthwith due and
payable.


                    
(b)     The Lender shall have the right to pursue any
other remedies available to it under any of the Loan Documents.


                    
(c)     The Lender shall have the right to pursue all
remedies available to it at law or in equity, including obtaining specific
performance and injunctive relief.


SECTION 18.02  Waivers;
Rescission of Declaration.  The
Lender shall have the right, to be exercised in its complete discretion, to
waive any breach hereunder (including the occurrence of an Event of Default),
by a writing setting forth the terms, conditions, and extent of such waiver
signed by the Lender and delivered to the Borrower Parties.  Unless such writing expressly provides to
the contrary, any waiver so granted shall extend only to the specific event or
occurrence which gave rise to the waiver and not to any other similar event or
occurrence which occurs subsequent to the date of such waiver.


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SECTION 18.03  The
Lender’s Right to Protect Collateral and Perform Covenants and Other Obligations.  If any Borrower Party fails to perform the
covenants and agreements contained in this Agreement or any of the other Loan
Documents, then the Lender at the Lender’s option may make such appearances,
disburse such sums and take such action as the Lender deems necessary, in its
sole discretion, to protect the Lender’s interest, including (i) disbursement
of reasonable attorneys’ fees, (ii) entry upon the Mortgaged Property to make
repairs and Replacements, (iii) procurement of satisfactory insurance as provided
in paragraph 5 of the Security Instrument encumbering the Mortgaged Property,
and (iv) if the Security Instrument is on a leasehold, exercise of any option
to renew or extend the ground lease on behalf of the Borrower Parties and the
curing of any default of the Borrower Parties in the terms and conditions of
the ground lease.  Any amounts disbursed
by the Lender pursuant to this Section, with interest thereon, shall become
additional indebtedness of the Borrower Parties secured by the Loan Documents.  Unless the Borrower and the Lender agree to
other terms of payment, such amounts shall be immediately due and payable and
shall bear interest from the date of disbursement at the weighted average, as
determined by Lender, of the interest rates in effect from time to time for
each Advance unless collection from the Borrower of interest at such rate would
be contrary to applicable law, in which event such amounts shall bear interest
at the highest rate which may be collected from the Borrower under applicable
law.  Nothing contained in this Section
shall require the Lender to incur any expense or take any action hereunder.


SECTION 18.04  No
Remedy Exclusive.  Unless otherwise
expressly provided, no remedy herein conferred upon or reserved is intended to
be exclusive of any other available remedy, but each remedy shall be cumulative
and shall be in addition to other remedies given under the Loan Documents or
existing at law or in equity.


SECTION 18.05  No
Waiver.  No delay or omission to
exercise any right or power accruing under any Loan Document upon the happening
of any Event of Default or Potential Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient.


SECTION 18.06  No
Notice.  In order to entitle the
Lender to exercise any remedy reserved to the Lender in this Article, it shall
not be necessary to give any notice, other than such notice as may be required
under the applicable provisions of this Agreement or any of the other Loan
Documents.


SECTION 18.07  Application
of Payments.  Except as otherwise
expressly provided in the Loan Documents, and unless applicable law provides
otherwise, (i) all payments received by the Lender from any of the Borrower
Parties under the Loan Documents shall be applied by the Lender against any
amounts then due and payable under the Loan Documents by any of the Borrower
Parties, in any order of priority that the Lender may determine and (ii) the
Borrower Parties shall have no right to determine the order of priority or the
allocation of any payment it makes to the Lender.



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ARTICLE XIX

RIGHTS OF FANNIE MAE




SECTION 19.01  Special
Pool Purchase Contract.  The
Borrower Parties acknowledge that Fannie Mae is entering into an agreement with
the Lender (“Special Pool Purchase Contract”), pursuant to which, inter
alia, (i) the Lender shall agree to assign all of its rights under this
Agreement to Fannie Mae, (ii) Fannie Mae shall accept the assignment of the
rights, (iii) subject to the terms, limitations and conditions set forth in the
Special Pool Purchase Contract, Fannie Mae shall agree to purchase a 100%
participation interest in each Advance issued under this Agreement by issuing
to the Lender a Fannie Mae MBS, in the amount and for a term equal to the
Advance purchased and backed by an interest in the Fixed Facility Note or the
Variable Facility Note, as the case may be, and the Collateral Pool securing
the Notes, (iv) the Lender shall agree to assign to Fannie Mae all of the
Lender’s interest in the Notes and Collateral Pool securing the Notes, and (v)
the Lender shall agree to service the loans evidenced by the Notes.


SECTION 19.02  Assignment
of Rights.  The Borrower Parties
acknowledge and consent to the assignment to Fannie Mae of all of the rights of
the Lender under this Agreement and all other Loan Documents, including the
right and power to make all decisions on the part of the Lender to be made
under this Agreement and the other Loan Documents, but Fannie Mae, by virtue of
this assignment, shall not be obligated to perform the obligations of the
Lender under this Agreement or the other Loan Documents.


SECTION 19.03  Release
of Collateral.  The Borrower Parties
hereby acknowledge that, after the assignment of Loan Documents contemplated in
Section 19.02, the Lender shall not have the right or power to effect a release
of any Collateral pursuant to Articles VII or X.  The Borrower Parties acknowledge that the Security Instruments
provide for the release of the Collateral under Articles VII and X.  Accordingly, the Borrower Parties shall not
look to the Lender for performance of any obligations set forth in Articles VII
and X, but shall look solely to the party secured by the Collateral to be
released for such performance.  The
Lender represents and warrants to the Borrower Parties that the party secured
by the Collateral shall be subject to the release provisions contained in
Articles VII and X by virtue of the release provisions in each Security
Instrument.


SECTION 19.04  Replacement
of Lender.  At the request of Fannie
Mae, the Borrower Parties and the Lender shall agree to the assumption by
another lender designated by Fannie Mae (which lender shall meet Fannie Mae’s
then current standards for lenders for credit facilities of the type and size
of the credit facility evidenced by this Agreement), of all of the obligations
of the Lender under this Agreement and the other Loan Documents, and/or any
related servicing obligations, and, at Fannie Mae’s option, the concurrent
release of the Lender from its obligations under this Agreement and the other
Loan Documents, and/or any related servicing obligations, and shall execute all
releases, modifications and other documents which Fannie Mae determines are
necessary or desirable to effect such assumption.


SECTION 19.05  Fannie
Mae and Lender Fees and Expenses.
The Borrower Parties agree that any provision providing for the payment
of fees, costs or expenses incurred or charged by the Lender pursuant to this
Agreement shall be deemed to provide for the Borrower’s payment of all
reasonable fees, costs and expenses incurred or charged by the Lender or Fannie
Mae in connection with the matter for which fees, costs or expenses are payable.


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SECTION 19.06  Third-Party
Beneficiary.  The Borrower Parties
hereby acknowledge and agree that Fannie Mae is a third party beneficiary of
all of the representations, warranties and covenants made by any Borrower
Parties to, and all rights under this Agreement conferred upon, the Lender,
and, by virtue of its status as third-party beneficiary and/or assignee of the
Lender’s rights under this Agreement, Fannie Mae shall have the right to
enforce all of the provisions of this Agreement against the Borrower Parties.


ARTICLE XX

INSURANCE, REAL ESTATE TAXES

AND REPLACEMENT RESERVES


SECTION 20.01  Insurance
and Real Estate Taxes.  The Borrower
Parties shall (unless waived by Lender) establish funds for taxes, insurance
premiums and certain other charges for each Mortgaged Property in accordance
with Section 7(a) of the Security Instrument for each Mortgaged Property.  The requirement for any fund established
pursuant to the preceding sentence may be met, at the Lender’s reasonable
discretion, by the posting of a letter of credit in form and substance
reasonably satisfactory to the Lender and meeting the requirements of Fannie
Mae.


SECTION 20.02  Replacement
Reserves.  The Borrower Parties
shall execute a Replacement Reserve Agreement for the Mortgaged Property which
they own and shall (unless waived by the Lender) make all deposits for
replacement reserves in accordance with the terms of the Replacement Reserve
Agreement.


ARTICLE XXI

INTEREST RATE PROTECTION


SECTION 21.01  Interest Rate Protection. 



                    
(a)     Hedge Requirement.  To protect against fluctuations in interest
rates, the Borrower shall make arrangements for a Hedge to be in place and
maintained at all times with respect to the Hedge Requirement Amount.  The
Hedge for the Hedge Requirement Amount shall be in place for a period beginning
on the date of the first Variable Advance from the Hedge Requirement Amount and
ending not earlier than the date which is the fifth anniversary of the Initial
Closing Date (the “Initial Hedge Period”).


                    
(b)     Subsequent Hedges.  Subject to the terms of Article XXI,
additional Hedges (each a “Subsequent Hedge”) shall be required
(i) upon the expiration of the Hedge in place for the Initial Hedge Period and
(ii) if and at such times as a new Variable Advance is funded that is part of
the Hedge Requirement Amount, such Subsequent Hedge to be in effect for a
period beginning on the day of the expiration of the Hedge in place for the
Initial Hedge Period or on the Closing Date of the Future Advance Request, as
the case may be, and ending not earlier than the then effective Variable
Facility Termination Date with respect to such Variable Advance.  It is
the intention of the parties that the Borrower shall obtain, and shall maintain
at all times during the term of this Agreement so long as any Variable Facility
Advance is Outstanding with respect to the Hedge Requirement Amount, a Hedge or
Hedges in an aggregate notional principal amount equal to the Variable Advances
Outstanding that are part of the Hedge Requirement 


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Amount and covering the entire term of the Amended and
Restated Variable Facility Commitment as set forth on the Summary of Credit
Facility Structure and meeting the conditions set forth in Section 21.02.


SECTION 21.02.  Hedge Terms.  Each
Hedge shall:


                    
(a)        provide for a notional
principal amount equal at all times to Variable Advances Outstanding that are
part of the Hedge Requirement Amount;


                    
(b)        intentionally deleted;


                    
(c)        in the case of Swaps, provide for a
notional interest rate required to achieve a 1.40 Aggregate Debt Service
Coverage Ratio for the Trailing 12 Months based upon a 30-year amortization
period equal to the Three Month Libor Rate in effect from time to time (the “Swap Rate”);


                    
(d)        in the case of Caps, provide for a notional
interest rate not greater than the lowest interest rate that would result in an
Aggregate Debt Service Coverage Ratio for the Variable Advances subject to the
Cap of not less than 1.10 to 1 (the “Cap Interest Rate”), provided that the
Aggregate Debt Service Coverage Ratio shall be calculated based on an interest
rate equal to (i) the then current Three Month LIBOR Rate, plus (ii) the
Variable Facility Fee, plus (iii) 300 basis points, and including any
amortization payments in respect of such Loan;


                    
(e)        in the case of Swaps, require the
counterparty to make interest payments on the notional principal amount at a
rate equal to the amount by which Coupon Rate exceeds the Swap Rate;


                    
(f)        in the case of Caps, require the counterparty
to make interest payments on the notional principal amount at a rate equal to
the amount by which the then applicable Coupon Rate exceeds the Cap Interest
Rate; 


                    
(g)        intentionally deleted; and


                    
(h)        be evidenced, governed  and
secured on terms and conditions, and pursuant to documentation (the “Hedge Documents”),
in form and content reasonably acceptable to Fannie Mae, and with a
counterparty (a “Counterparty”) approved by Fannie Mae.


SECTION 21.03  Hedge Security Agreement;
Delivery of Hedge Payments.  Pursuant to a Hedge Security Agreement,
the Lender shall be granted an enforceable, perfected, first priority lien on
and security interest in each Hedge and payments due under the Hedge (including
scheduled and termination payments) in order to secure the Borrower’s
obligations to the Lender under this Agreement.  With respect to each
Hedge, the Hedge Security Agreement must be delivered by the Borrower to the
Lender no later than the effective date of the Hedge.


SECTION 21.04  Termination.  The
Borrower shall not terminate, transfer or consent to any transfer of any
existing Hedge without the Lender’s prior written consent as long as the
Borrower is required to maintain a Hedge pursuant to this Agreement; provided,
however, that if, 


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and at such time as, there are no Variable Advances
Outstanding that are part of the Hedge Requirement Amount, the Borrower shall
have the right to terminate the existing Hedge and the proceeds of any such
termination shall be paid to the Borrower.


SECTION 21.05  Performance Under Hedge
Documents.  The Borrower agrees to comply fully with, and to otherwise
perform when due, its obligations under, all applicable Hedge Documents and all
other agreements evidencing, governing and/or securing any Hedge arrangement
contemplated under this Article XXI.  The Borrower shall not exercise,
without the Lender’s prior written consent, which consent shall not be
unreasonably withheld, and shall exercise, at the Lender’s direction, any
rights or remedies under any Hedge Document, including without limitation the
right of termination.


SECTION 21.06  Approved
Swaps.  Notwithstanding any
provisions herein to the contrary, the parties hereby acknowledge that the
Hedge Documents evidencing the LIBOR Swaps with AmSouth and First Tennessee set
forth on Exhibit II attached hereto have been approved by Fannie Mae as
acceptable Swaps under this Agreement (the “Approved Swaps”).  Borrower Parties agree to assign to Lender
all right, title and interest in all payments received (but not the obligation
for any payments due) under the Approved Swaps in a form acceptable to Lender.


ARTICLE XXII

LIMITS ON PERSONAL LIABILITY


SECTION 22.01  Personal
Liability to the Borrower Parties.


                    
(a)     Full Recourse.  Except as provided in Section 22.01(b), the
Borrower Parties are and shall remain jointly and severally personally liable
to the Lender for the payment and performance of all Obligations throughout the
term of this Agreement.


                    
(b)     Termination of Personal Liability. The
provisions of Section 22.01(a) shall be null and void upon the written notice
of Borrower to Lender of its election to render such provisions null and void
if (i) the Aggregate Loan to Value Ratio is 60% or less, (ii) the Aggregate
Debt Service Ratio for the Trailing 12 Month Period is 145% or more, (iii)
there has been a complete termination of the Variable Facility, and (iv) the
Mortgaged Properties are owned in fee simple by a Borrower Party that is a
Single Purpose Entity.  Upon the
termination of the effectiveness of Section 22.01(a) the following additional
provisions of this Agreement shall be null and void and no longer applicable:


	
   

  	
   

  
	
   

  	
            (1)     The
  second, third and fourth sentences of Section 8.01; and

  
	
   

  	
   

  
	
   

  	
            (2)     Sections
  15.02 and 15.03 to the extent that a Default would result from the failure of
  the Borrower to be in compliance with such Sections;

  



                    
(c)     Exceptions to Limits on Personal
Liability.  Upon termination of personal
liability of the Borrower Parties pursuant to paragraph (b) of this Section
22.01, the Borrower Parties shall remain personally liable to the Lender on a
joint and several basis for the repayment of a portion of the Advances and
other amounts due under the Loan Documents equal to any loss or damage suffered
by the Lender as a result of (1) failure of the Borrower Parties to pay to the 


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Lender upon written demand after an Event of Default
all Rents to which the Lender is entitled under Section 3(a) of the Security
Instrument encumbering the Mortgaged Property and the amount of all security
deposits collected by the Borrower Parties from tenants then in residence; (2)
failure of the Borrower Parties to apply all insurance proceeds and
condemnation proceeds as required by the Security Instrument encumbering the
Mortgaged Property; (3) failure of the Borrower Parties to comply in all
material respects with Section 13.04 relating to the delivery of books and
records, statements, schedules and reports; (4) fraud or written material
misrepresentation by any Borrower Party or any officer, director, partner,
member or employee of any Borrower Party in connection with the application for
or creation of the Obligations or any request for any action or consent by the
Lender; (5) failure to apply Rents, first, to the payment of reasonable
operating expenses and then to amounts (“Debt Service Amounts”) payable under
the Loan Documents (except that the Borrower Party will not be personally
liable (i) to the extent that the Borrower Party lacks the legal right to
direct the disbursement of such sums because of a bankruptcy, receivership or
similar judicial proceeding or otherwise under the Loan Documents, or (ii) with
respect to Rents of a Mortgaged Property that are distributed in any Calendar
Quarter if the Borrower Party has paid all operating expenses and Debt Service
Amounts for that Calendar Quarter); or (6) failure of the Borrower to pay any
and all documentary stamp taxes, intangible taxes and other taxes, impositions,
fees and charges due on or with respect to the Note, the Indebtedness, this
Instrument and/or any of the other Loan Documents.


                    
(d)     Full Recourse After Termination of Personal
Liability.  Upon termination of
personal liability of the Borrower Parties pursuant to paragraph (b) of this
Section 22.01, the Borrower Parties shall become personally liable to the
Lender for the payment and performance of all Obligations upon the occurrence
of any of the following Events of Default: (1) the Borrower Parties’
acquisition of any property or operation of any business not permitted by
Section 33 of the Security Instrument; or (2) a Transfer that is an Event of
Default under Section 21 of the Security Instrument.


                    
(e)     Permitted Transfer Not Release.  No Transfer by the REIT of its Ownership
Interests in the Borrower Parties shall release the Borrower Parties from
liability under this Article, this Agreement or any other Loan Document, unless
the Lender shall have approved the Transfer and shall have expressly released
the Borrower Parties in connection with the Transfer.


                    
(f)     Miscellaneous.  To the extent that a Borrower Party has
personal liability under this Section, the Lender may exercise its rights
against the Borrower Party personally without regard to whether the Lender has
exercised any rights against the Mortgaged Property or any other security, or
pursued any rights against any guarantor, or pursued any other rights available
to the Lender under the Loan Documents or applicable law.  For purposes of this Article, the term
“Mortgaged Property” shall not include any funds that (1) have been applied by
any Borrower Party as required or permitted by the Loan Documents prior to the
occurrence of an Event of Default, or (2) are owned by a Borrower Party and which
the Borrower Party was unable to apply as required or permitted by the Loan
Documents because of a bankruptcy, receivership, or similar judicial
proceeding.



- 85 -







ARTICLE XXIII


MISCELLANEOUS
PROVISIONS


SECTION 23.01  Counterparts.  To facilitate execution, this Agreement may
be executed in any number of counterparts.
It shall not be necessary that the signatures of, or on behalf of, each
party, or that the signatures of all persons required to bind any party, appear
on each counterpart, but it shall be sufficient that the signature of, or on
behalf of, each party, appear on one or more counterparts.  All counterparts shall collectively
constitute a single agreement.  It shall
not be necessary in making proof of this Agreement to produce or account for
more than the number of counterparts containing the respective signatures of,
or on behalf of, all of the parties hereto.


SECTION 23.02  Amendments,
Changes and Modifications.  This
Agreement may be amended, changed, modified, altered or terminated only by
written instrument or written instruments signed by all of the parties hereto.


SECTION 23.03  Payment
of Costs, Fees and Expenses.  The
Borrower shall pay, on demand, all reasonable fees, costs, charges or expenses
(including the fees and expenses of attorneys, accountants and other experts)
incurred by the Lender in connection with:


                    
(a)     Any amendment, consent or waiver to this
Agreement or any of the Loan Documents (whether or not any such amendments,
consents or waivers are entered into).


                    
(b)     Defending or participating in any litigation
arising from actions by third parties and brought against or involving the
Lender with respect to (i) any Mortgaged Property, (ii) any event, act,
condition or circumstance in connection with any Mortgaged Property or (iii)
the relationship between the Lender and the Borrower Parties in connection with
this Agreement or any of the transactions contemplated by this Agreement.


                    
(c)     The administration or enforcement of, or
preservation of rights or remedies under, this Agreement or any other Loan
Documents or in connection with the foreclosure upon, sale of or other
disposition of any Collateral granted pursuant to the Loan Documents.


                    
(d)     The REIT’s Registration Statement, or similar
disclosure documents, including fees payable to any rating agencies, including
the reasonable fees and expenses of the Lender’s attorneys and accountants.


The Borrower shall also pay, on demand, any transfer
taxes, documentary taxes, assessments or charges made by any governmental
authority by reason of the execution, delivery, filing, recordation,
performance or enforcement of any of the Loan Documents or the Advances.  However, the Borrower will not be obligated
to pay any franchise, excise, estate, inheritance, income, excess profits or
similar tax on the Lender.  Any
attorneys’ fees and expenses payable by the Borrower pursuant to this Section
shall be recoverable separately from and in addition to any other amount
included in such judgment, and such obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into
any such judgment.  Any amounts payable by
the Borrower pursuant to this Section, with interest thereon if not paid when
due, shall become additional indebtedness of the Borrower secured by the Loan
Documents.  Such amounts shall bear
interest from the date such amounts are due until paid in 


- 86 -






full at the weighted average, as determined by Lender,
of the interest rates in effect from time to time for each Advance unless
collection from the Borrower of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from the Borrower under applicable law.  The provisions of this Section are
cumulative with, and do not exclude the application and benefit to the Lender
of, any provision of any other Loan Document relating to any of the matters
covered by this Section.


SECTION 23.04  Payment
Procedure.  All payments to be made
to the Lender pursuant to this Agreement or any of the Loan Documents shall be
made in lawful currency of the United States of America and in immediately
available funds by wire transfer to an account designated by the Lender before
1:00 p.m. (Eastern Standard Time) on the date when due.


SECTION 23.05  Payments
on Business Days.  In any case in
which the date of payment to the Lender or the expiration of any time period
hereunder occurs on a day which is not a Business Day, then such payment or
expiration of such time period need not occur on such date but may be made on
the next succeeding Business Day with the same force and effect as if made on
the day of maturity or expiration of such period, except that interest shall
continue to accrue for the period after such date to the next Business Day.


SECTION 23.06  Choice
of Law; Consent to Jurisdiction; Waiver of Jury Trial.  NOTWITHSTANDING ANYTHING IN THE NOTES, THE
SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS TO THE CONTRARY, EACH OF
THE TERMS AND PROVISIONS, AND RIGHTS AND OBLIGATIONS OF EACH BORROWER PARTY
UNDER THE NOTES, AND EACH BORROWER PARTY UNDER THE OTHER LOAN DOCUMENTS, SHALL
BE GOVERNED BY, INTERPRETED, CONSTRUED AND ENFORCED PURSUANT TO AND IN
ACCORDANCE WITH THE LAWS OF THE DISTRICT OF COLUMBIA (EXCLUDING THE LAW
APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL
AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND
FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND
REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY
THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED, (2)
THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND FORECLOSURE OF
SECURITY INTERESTS ON PERSONAL PROPERTY (OTHER THAN DEPOSIT ACCOUNTS), WHICH
MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION DETERMINED BY THE
CHOICE OF LAW PROVISIONS OF THE DISTRICT OF COLUMBIA UNIFORM COMMERCIAL CODE
AND (3) THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND
FORECLOSURE OF DEPOSIT ACCOUNTS, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF
THE JURISDICTION IN WHICH THE DEPOSIT ACCOUNT IS LOCATED.  THE BORROWER PARTIES AGREE THAT ANY
CONTROVERSY ARISING UNDER OR IN RELATION TO THE NOTES, THE SECURITY DOCUMENTS
OR ANY OTHER LOAN DOCUMENT SHALL BE, EXCEPT AS OTHERWISE PROVIDED HEREIN,
LITIGATED IN DISTRICT OF COLUMBIA.  THE
LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN DISTRICT OF
COLUMBIA SHALL, EXCEPT AS OTHERWISE PROVIDED HEREIN, HAVE JURISDICTION OVER ALL
CONTROVERSIES WHICH 


- 87 -






MAY ARISE UNDER OR IN RELATION TO THE LOAN DOCUMENTS,
INCLUDING THOSE CONTROVERSIES RELATING TO THE EXECUTION, JURISDICTION, BREACH,
ENFORCEMENT OR COMPLIANCE WITH THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER
ISSUE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS.  EACH BORROWER PARTY
IRREVOCABLY CONSENTS TO SERVICE, JURISDICTION, AND VENUE OF SUCH COURTS FOR ANY
LITIGATION ARISING FROM THE NOTES, THE SECURITY DOCUMENTS OR ANY OF THE OTHER
LOAN DOCUMENTS, AND WAIVES ANY OTHER VENUE TO WHICH IT MIGHT BE ENTITLED BY
VIRTUE OF DOMICILE, HABITUAL RESIDENCE OR OTHERWISE.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE LENDER FROM
BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST THE
BORROWER PARTIES, AND AGAINST THE COLLATERAL IN ANY OTHER JURISDICTION.  INITIATING SUCH SUIT, ACTION OR PROCEEDING
OR TAKING SUCH ACTION IN ANY OTHER JURISDICTION SHALL IN NO EVENT CONSTITUTE A
WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF DISTRICT OF COLUMBIA
SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE BORROWER PARTIES AND THE LENDER
AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY THE BORROWER PARTIES TO PERSONAL
JURISDICTION WITHIN DISTRICT OF COLUMBIA EACH BORROWER PARTY (I) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING UNDER ANY
OF THE LOAN DOCUMENTS TRIABLE BY A JURY AND (II) WAIVES ANY RIGHT TO TRIAL BY
JURY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS
WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE.  FURTHER, EACH BORROWER PARTY HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING, BUT NOT LIMITED
TO, LENDER’S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO EACH BORROWER
PARTY THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE
FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY THE
BORROWER PARTIES UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY
THE BORROWER PARTIES’ FREE WILL.


SECTION 23.07  Severability.  In the event any provision of this Agreement
or in any other Loan Document shall be held invalid, illegal or unenforceable
in any jurisdiction, such provision will be severable from the remainder hereof
as to such jurisdiction and the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired in any
jurisdiction.


SECTION 23.08  Notices.


                    
(a)     Manner of Giving Notice.  Each notice, direction, certificate or other
communication hereunder (in this Section referred to collectively as “notices”
and singly as a “notice”) which any party is required or permitted to give to
the other party pursuant to this Agreement shall be in writing and shall be
deemed to have been duly and sufficiently given if:


- 88 -






	
   

  	
   

  
	
   

  	
                      (1)     personally
  delivered with proof of delivery thereof (any notice so delivered shall be
  deemed to have been received at the time so delivered);

  
	
   

  	
   

  
	
   

  	
                      (2)     sent
  by Federal Express (or other similar overnight courier) designating morning
  delivery (any notice so delivered shall be deemed to have been received on
  the Business Day it is delivered by the courier);

  
	
   

  	
   

  
	
   

  	
                      (3)     sent
  by telecopier or facsimile machine which automatically generates a
  transmission report that states the date and time of the transmission, the
  length of the document transmitted, and the telephone number of the
  recipient’s telecopier or facsimile machine (to be confirmed with a copy
  thereof sent in accordance with paragraphs (1) or (2) above within two
  Business Days) (any notice so delivered shall be deemed to have been received
  (i) on the date of transmission, if so transmitted before 5:00 p.m. (local
  time of the recipient) on a Business Day, or (ii) on the next Business Day,
  if so transmitted on or after 5:00 p.m. (local time of the recipient) on a
  Business Day or if transmitted on a day other than a Business Day);

  



addressed to the parties as follows:


          As
to any Borrower Party:


	
   

  	
   

  	
   

  
	
   

  	
  c/o Mid-America Apartment Communities, Inc.

  
	
   

  	
  6584 Polar Avenue

  
	
   

  	
  Suite 300

  	
   

  
	
   

  	
  Memphis, Tennessee 38138

  
	
   

  	
  Attention:

  	
  Simon R.C. Wadsworth

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
  Telecopy No.:  

  	
  (901) 682-6667

  



          with
a copy to:


	
   

  	
   

  	
   

  
	
   

  	
  Bass, Berry & Sims PLC

  
	
   

  	
  The Tower at Peabody Place

  
	
   

  	
  100 Peabody Place

  
	
   

  	
  Suite 900

  	
   

  
	
   

  	
  Memphis, Tennessee
  38103-3672

  
	
   

  	
  Attention:

  	
  John A. Stemmler, Esq.

  
	
   

  	
  Telecopy No.:  

  	
  (901) 543-5999

  



          As
to the Lender:


	
   

  	
   

  
	
   

  	
  Prudential Multifamily Mortgage, Inc.

  
	
   

  	
  c/o Prudential Asset Resources

  
	
   

  	
  2200 Ross Avenue

  
	
   

  	
  Suite 4900 E

  
	
   

  	
  Dallas, Texas
  75201

  
	
   

  	
  Attention:    Asset Management Department

  



- 89 -






	
   

  	
   

  
	
   

  	
  Telecopy No.:    (214) 777-4556

  



with a copy to:


	
   

  	
   

  
	
   

  	
  Prudential Multifamily Mortgage, Inc.

  
	
   

  	
  8401 Greensboro Drive

  
	
   

  	
  Suite 200

  
	
   

  	
  McLean, Virginia
  22102

  
	
   

  	
  Attention: Laura Eckhardt

  
	
   

  	
  Telecopy No.: (703) 610-1422

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Prudential Multifamily Mortgage, Inc.

  
	
   

  	
  Four Embarcadero Center

  
	
   

  	
  Suite 2700

  
	
   

  	
  San Francisco, California  94111

  
	
   

  	
  Attention:
  Harry N. Mixon, Esq.

  
	
   

  	
  Telecopy No.:
  (415) 956-2197

  



As
to Fannie Mae:


	
   

  	
   

  
	
   

  	
  Fannie Mae

  	
   

  
	
   

  	
  3939 Wisconsin Avenue, N.W.

  
	
   

  	
  Washington, D.C.
  20016-2899

  
	
   

  	
  Attention:        Vice President for

  
	
   

  	
                           Multifamily Asset Management

  
	
   

  	
  Telecopy No.:
  (202) 752-5016

  



with
a copy to:


	
   

  	
   

  
	
   

  	
  Venable LLP

  	
   

  
	
   

  	
  575 7th Street, N.W.

  
	
   

  	
  Washington, D.C.
  20004

  
	
   

  	
  Attention:        Lawrence H. Gesner, Esq.

  
	
   

  	
  Telecopy No.: (202) 344-8300

  



                    (b)
Change of Notice Address.  Any party may, by notice given pursuant to
this Section, change the person or persons and/or address or addresses, or
designate an additional person or persons or an additional address or
addresses, for its notices, but notice of a change of address shall only be
effective upon receipt.  Each party
agrees that it shall not refuse or reject delivery of any notice given
hereunder, that it shall acknowledge, in writing, receipt of the same upon
request by the other party and that any notice rejected or refused by it shall
be deemed for all purposes of this Agreement to have been received by the
rejecting party on the date so refused or rejected, as conclusively established
by the records of the U.S. Postal Service, the courier service or facsimile.


- 90 -






SECTION 23.09  Further
Assurances and Corrective Instruments.


                    
(a)     Further Assurances.  To the extent permitted by law, the parties
hereto agree that they shall, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further instruments as the Lender or the Borrower Parties may
request and as may be required in the opinion of the Lender or its counsel to
effectuate the intention of or facilitate the performance of this Agreement or
any Loan Document.


                    
(b)     Further Documentation.  Without limiting the generality of subsection
(a), in the event any further documentation or information is required by the
Lender to correct patent mistakes in the Loan Documents, materials relating to
the Title Insurance Policies or the funding of the Advances, the Borrower
Parties shall provide, or cause to be provided to the Lender, at their cost and
expense, such documentation or information.
The Borrower Parties shall execute and deliver to the Lender such
documentation, including any amendments, corrections, deletions or additions to
the Notes, the Security Instruments or the other Loan Documents as is
reasonably required by the Lender.


                    
(c)     Compliance with Investor Requirements.  Without limiting the generality of
subsection (a), the Borrower Parties
shall do anything necessary to comply with the reasonable requirements
of the Lender in order to enable the Lender to sell the MBS backed by an
Advance.


SECTION 23.10  Term
of this Agreement.  This Agreement
shall continue in effect until the Credit Facility Termination Date.


SECTION 23.11  Assignments;
Third-Party Rights.  No Borrower
Party shall assign this Agreement, or delegate any of its obligations
hereunder, without the prior written consent of the Lender.  The Lender may assign its rights and
obligations under this Agreement separately or together, without the Borrower
Parties’ consent, only to Fannie Mae, but may not delegate its obligations
under this Agreement unless required to do so pursuant to Section 19.04.


SECTION 23.12  Headings.  Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.


SECTION 23.13  General
Interpretive Principles.  For purposes
of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in Article I, Section 15.01, Section
16.01 and elsewhere in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other genders; (ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP; (iii) references herein to “Articles,” “Sections,”
“subsections,” “paragraphs” and other subdivisions without reference to a
document are to designated Articles, Sections, subsections, paragraphs and
other subdivisions of this Agreement; (iv) a reference to a subsection without
further reference to a Section is a reference to such subsection as contained
in the same Section in which the reference appears, and this rule shall also
apply to paragraphs and other subdivisions; (v) a 


- 91 -






reference to an Exhibit or a Schedule without a
further reference to the document to which the Exhibit or Schedule is attached
is a reference to an Exhibit or Schedule to this Agreement; (vi) the words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and (vii) the word
“including” means “including, but not limited to.”


SECTION 23.14  Interpretation.  The parties hereto acknowledge that each
party and their respective counsel have participated in the drafting and
revision of this Agreement and the Loan Documents.  Accordingly, the parties agree that any rule of construction
which disfavors the drafting party shall not apply in the interpretation of
this Agreement and the Loan Documents or any amendment or supplement or exhibit
hereto or thereto.


SECTION 23.15  Standards
for Decisions, Etc.  Unless
otherwise provided herein, if the Lender’s approval is required for any matter
hereunder, such approval may be granted or withheld in the Lender’s sole and
absolute discretion.  Unless otherwise
provided herein, if the Lender’s designation, determination, selection,
estimate, action or decision is required, permitted or contemplated hereunder,
such designation, determination, selection, estimate, action or decision shall
be made in the Lender’s sole and absolute discretion.


SECTION 23.16  Decisions
in Writing.  Any approval,
designation, determination, selection, action or decision of the Lender or the
Borrower Parties must be in writing to be effective.


SECTION 23.17  Joint
and Several Liability. Each Borrower Party shall be jointly and severally
liable for the payment and performance of each obligation of any Borrower Party
arising under any of the Loan Documents.


[THE REMAINDER OF
THIS PAGE IS LEFT INTENTIONALLY BLANK]


- 92 -






          IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Borrower Parties

  
	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  INC., a Tennessee corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  
	
   

  	
   

  	
       Executive Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS, L.P.,

  a Tennessee limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Mid-America Apartment Communities, Inc., 

  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
       Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
       Executive Vice
  President

  



- 93 -






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P.,

  a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  MAC of Delaware, Inc., a Delaware corporation,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	 

  
	
   

  	
   

  	
  Name:  

  	
  John A. Good

  
	
   

  	
   

  	
  Its:

  	
  Assistant Secretary

  



- 94 -






	
   

  	
   

  	
   

  
	
   

  	
  Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a

  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Name:  

  	
  Sharon D. Singleton

  
	
   

  	
  Title:

  	
  Vice President

  



- 95 -








THIRD AMENDED AND
RESTATED

MASTER CREDIT FACILITY AGREEMENT

(MAA I)


among


(i) MID-AMERICA
APARTMENT COMMUNITIES, INC.,

a Tennessee corporation,


(ii) MID- AMERICA
APARTMENTS, LP,

a Tennessee limited partnership, and


(iii) MID-AMERICA
APARTMENTS OF TEXAS, L.P.,

a Texas limited partnership,


and


PRUDENTIAL
MULTIFAMILY MORTGAGE, INC.,

a Delaware corporation


dated as of


March 30, 2004






TABLE OF CONTENTS


	
 

	
 

	
 


	
 

	
 

	
Page


	
RECITALS

	
 

	
1


	
 

	
 

	
 


	
ARTICLE I

	
 

	
3


	
 

	
 

	
 


	
ARTICLE II

	
 

	
24


	
 

	
 

	
 


	
SECTION
  2.01  

	
VARIABLE FACILITY
  COMMITMENT

	
24


	
SECTION
  2.02  

	
REQUESTS FOR VARIABLE
  ADVANCES

	
24


	
SECTION
  2.03  

	
MATURITY DATE OF
  VARIABLE ADVANCES

	
24


	
SECTION
  2.04  

	
INTEREST ON VARIABLE
  FACILITY ADVANCES

	
24


	
SECTION
  2.05  

	
COUPON RATES FOR
  VARIABLE ADVANCES

	
25


	
SECTION
  2.06  

	
VARIABLE FACILITY NOTE

	
25


	
SECTION
  2.07  

	
[INTENTIONALLY DELETED.]

	
25


	
SECTION
  2.08  

	
REINSTATEMENT OF
  VARIABLE COMMITMENT UPON MATURITY OF FIXED FACILITY ADVANCES

	
25


	
SECTION
  2.09  

	
LIMITATIONS ON RIGHT TO
  REBORROW

	
26


	
SECTION
  2.10  

	
CONDITIONS PRECEDENT TO
  REBORROWING

	
26


	
 

	
 

	
 


	
ARTICLE III

	
 

	
27


	
 

	
 

	
 


	
SECTION
  3.01  

	
FIXED FACILITY
  COMMITMENT

	
27


	
SECTION
  3.02  

	
REQUESTS FOR FIXED
  FACILITY ADVANCES

	
27


	
SECTION
  3.03  

	
MATURITY DATE OF FIXED
  FACILITY ADVANCES; AMORTIZATION

	
27


	
SECTION
  3.04  

	
INTEREST ON FIXED
  FACILITY ADVANCES

	
27


	
SECTION
  3.05  

	
COUPON RATES FOR FIXED
  FACILITY ADVANCES

	
28


	
SECTION
  3.06  

	
FIXED FACILITY NOTE

	
28


	
SECTION
  3.07  

	
CONVERSION OF COMMITMENT
  FROM VARIABLE FACILITY COMMITMENT TO FIXED FACILITY COMMITMENT

	
28


	
SECTION
  3.08  

	
LIMITATIONS ON RIGHT TO
  CONVERT

	
28


	
SECTION
  3.09  

	
CONDITIONS PRECEDENT TO
  CONVERSION

	
29


	
 

	
 

	
 


	
ARTICLE IV

	
 

	
29


	
 

	
 

	
 


	
SECTION
  4.01  

	
RATE SETTING FOR AN
  ADVANCE

	
29


	
SECTION
  4.02  

	
ADVANCE CONFIRMATION
  INSTRUMENT FOR VARIABLE ADVANCES

	
30


	
SECTION
  4.03  

	
BREAKAGE AND OTHER COSTS

	
31


	
 

	
 

	
 


	
ARTICLE V

	
31


	
 

	
 

	
 


	
SECTION
  5.01  

	
INITIAL ADVANCE

	
31


	
SECTION
  5.02  

	
FUTURE ADVANCES

	
31


	
SECTION
  5.03  

	
CONDITIONS PRECEDENT TO
  FUTURE ADVANCES

	
31


	
SECTION
  5.04  

	
DETERMINATION OF
  ALLOCABLE FACILITY AMOUNT AND VALUATIONS

	
32


	
 

	
 

	
 


	
ARTICLE VI

	
 

	
33


	
 

	
 

	
 


	
SECTION
  6.01  

	
RIGHT TO ADD COLLATERAL

	
33


	
SECTION
  6.02  

	
PROCEDURE FOR ADDING
  COLLATERAL

	
33


	
SECTION
  6.03  

	
CONDITIONS PRECEDENT TO
  ADDITION OF THE ADDITIONAL MORTGAGED PROPERTIES TO THE COLLATERAL POOL

	
34


	
 

	
 

	
 


	
ARTICLE VII

	
 

	
35


	
 

	
 

	
 


	
SECTION
  7.01  

	
RIGHT TO OBTAIN RELEASES
  OF COLLATERAL

	
35


	
SECTION
  7.02  

	
PROCEDURE FOR OBTAINING
  RELEASES OF COLLATERAL

	
35





i






	
 

	
 

	
 


	
SECTION
  7.03  

	
CONDITIONS PRECEDENT TO
  RELEASE OF COLLATERAL RELEASE PROPERTY FROM THE COLLATERAL

	
37


	
SECTION
  7.04  

	
SUBSTITUTIONS

	
38


	
 

	
 

	
 


	
ARTICLE VIII

	
 

	
42


	
 

	
 

	
 


	
SECTION
  8.01  

	
RIGHT TO INCREASE
  COMMITMENT

	
42


	
SECTION
  8.02  

	
PROCEDURE FOR OBTAINING
  INCREASES IN COMMITMENT

	
42


	
SECTION
  8.03  

	
CONDITIONS PRECEDENT TO
  INCREASE IN COMMITMENT

	
43


	
 

	
 

	
 


	
ARTICLE IX

	
 

	
44


	
 

	
 

	
 


	
SECTION
  9.01  

	
RIGHT TO COMPLETE OR
  PARTIAL TERMINATION OF FACILITIES

	
44


	
SECTION
  9.02

	
PROCEDURE FOR COMPLETE
  OR PARTIAL TERMINATION OF FACILITIES

	
44


	
SECTION
  9.03  

	
CONDITIONS PRECEDENT TO
  COMPLETE OR PARTIAL TERMINATION OF FACILITIES

	
44


	
 

	
 

	
 


	
ARTICLE X

	
 

	
45


	
 

	
 

	
 


	
SECTION
  10.01  

	
RIGHT TO TERMINATE
  CREDIT FACILITY

	
45


	
SECTION
  10.02  

	
PROCEDURE FOR
  TERMINATING CREDIT FACILITY

	
45


	
SECTION
  10.03  

	
CONDITIONS PRECEDENT TO
  TERMINATION OF CREDIT FACILITY

	
46


	
 

	
 

	
 


	
ARTICLE XI

	
 

	
46


	
 

	
 

	
 


	
SECTION
  11.01  

	
CONDITIONS APPLICABLE TO
  ALL REQUESTS

	
46


	
SECTION
  11.02  

	
DELIVERY OF CLOSING
  DOCUMENTS RELATING TO COLLATERAL SUBSTITUTION REQUEST, CREDIT FACILITY
  EXPANSION REQUEST OR FUTURE ADVANCE REQUEST

	
47


	
SECTION
  11.03  

	
DELIVERY OF
  PROPERTY-RELATED DOCUMENTS

	
48


	
 

	
 

	
 


	
ARTICLE XII

	
 

	
49


	
 

	
 

	
 


	
SECTION
  12.01  

	
REPRESENTATIONS AND
  WARRANTIES OF THE BORROWER PARTIES

	
49


	
SECTION
  12.02  

	
REPRESENTATIONS AND
  WARRANTIES OF THE BORROWER PARTIES

	
53


	
SECTION
  12.03  

	
REPRESENTATIONS AND
  WARRANTIES OF THE LENDER

	
56


	
 

	
 

	
 


	
ARTICLE XIII

	
 

	
56


	
 

	
 

	
 


	
SECTION
  13.01  

	
COMPLIANCE WITH
  AGREEMENTS

	
57


	
SECTION
  13.02  

	
MAINTENANCE OF EXISTENCE

	
57


	
SECTION
  13.03  

	
MAINTENANCE OF REIT
  STATUS

	
57


	
SECTION
  13.04  

	
FINANCIAL STATEMENTS;
  ACCOUNTANTS’ REPORTS; OTHER INFORMATION

	
57


	
SECTION
  13.05  

	
CERTIFICATE OF
  COMPLIANCE

	
60


	
SECTION
  13.06  

	
MAINTAIN LICENSES

	
60


	
SECTION
  13.07  

	
ACCESS TO RECORDS;
  DISCUSSIONS WITH OFFICERS AND ACCOUNTANTS

	
60


	
SECTION
  13.08  

	
INFORM THE LENDER OF
  MATERIAL EVENTS

	
60


	
SECTION
  13.09  

	
INTENTIONALLY OMITTED

	
62


	
SECTION
  13.10  

	
INSPECTION

	
62


	
SECTION
  13.11  

	
COMPLIANCE WITH
  APPLICABLE LAWS

	
62


	
SECTION
  13.12  

	
WARRANTY OF TITLE

	
62


	
SECTION
  13.13  

	
DEFENSE OF ACTIONS

	
62


	
SECTION
  13.14  

	
ALTERATIONS TO THE
  MORTGAGED PROPERTIES

	
63


	
SECTION
  13.15  

	
ERISA

	
63


	
SECTION
  13.16  

	
LOAN DOCUMENT TAXES

	
63


	
SECTION
  13.17  

	
FURTHER ASSURANCES

	
64


	
SECTION
  13.18  

	
MONITORING COMPLIANCE

	
64


	
SECTION
  13.19  

	
LEASES

	
64


	
SECTION
  13.20  

	
INTENTIONALLY OMITTED

	
64


	
SECTION
  13.21 

	
TRANSFER OF OWNERSHIP
  INTERESTS OF THE BORROWER PARTIES

	
64


	
SECTION
  13.22  

	
CHANGE IN SENIOR
  MANAGEMENT

	
66


	
SECTION
  13.23  

	
DATE-DOWN ENDORSEMENTS

	
67


	
SECTION
  13.24  

	
GEOGRAPHICAL
  DIVERSIFICATION

	
67


	
SECTION
  13.25  

	
OWNERSHIP OF MORTGAGED
  PROPERTIES

	
67





ii






	
 

	
 

	
 


	
ARTICLE XIV

	
 

	
67


	
 

	
 

	
 


	
SECTION
  14.01  

	
OTHER ACTIVITIES

	
67


	
SECTION
  14.02  

	
VALUE OF SECURITY

	
68


	
SECTION
  14.03  

	
ZONING

	
68


	
SECTION
  14.04  

	
LIENS

	
68


	
SECTION
  14.05  

	
SALE

	
68


	
SECTION
  14.06 

	
INDEBTEDNESS

	
69


	
SECTION
  14.07  

	
PRINCIPAL PLACE OF
  BUSINESS

	
69


	
SECTION
  14.08  

	
FREQUENCY OF REQUESTS

	
69


	
SECTION
  14.09  

	
CHANGE IN PROPERTY
  MANAGEMENT

	
69


	
SECTION
  14.10  

	
CONDOMINIUMS

	
69


	
SECTION
  14.11  

	
RESTRICTIONS ON
  PARTNERSHIP DISTRIBUTIONS

	
69


	
SECTION
  14.12  

	
LINES OF BUSINESS

	
69


	
SECTION
  14.13  

	
LIMITATION ON UNIMPROVED
  REAL PROPERTY AND NEW CONSTRUCTION

	
69


	
SECTION
  14.14  

	
DIVIDEND PAYOUT

	
70


	
 

	
 

	
 


	
ARTICLE XV

	
 

	
70


	
 

	
 

	
 


	
SECTION
  15.01  

	
FINANCIAL DEFINITIONS

	
70


	
SECTION
  15.02  

	
COMPLIANCE WITH DEBT
  SERVICE COVERAGE RATIOS

	
74


	
SECTION
  15.03  

	
COMPLIANCE WITH LOAN TO
  VALUE RATIOS

	
74


	
SECTION
  15.04  

	
COMPLIANCE WITH
  CONCENTRATION TEST

	
74


	
SECTION
  15.05  

	
COMPLIANCE WITH REIT’S
  NET WORTH TEST

	
74


	
SECTION
  15.06  

	
COMPLIANCE WITH REIT’S
  TOTAL INDEBTEDNESS TO CONSOLIDATED TOTAL ASSETS RATIO

	
74


	
SECTION
  15.07  

	
COMPLIANCE WITH REIT’S
  CONSOLIDATED EBITDA TO INTEREST RATIO

	
74


	
SECTION
  15.08  

	
COMPLIANCE WITH REIT’S
  CONSOLIDATED EBITDA TO FIXED CHARGE RATIO

	
75


	
 

	
 

	
 


	
ARTICLE XVI

	
 

	
75


	
 

	
 

	
 


	
SECTION
  16.01  

	
STANDBY FEE AND RATE PRESERVATION
  FEE

	
75


	
SECTION
  16.02  

	
ORIGINATION FEES

	
75


	
SECTION
  16.03  

	
DUE DILIGENCE FEES

	
75


	
SECTION
  16.04  

	
LEGAL FEES AND EXPENSES

	
76


	
SECTION
  16.05  

	
MBS-RELATED COSTS

	
76


	
SECTION
  16.06  

	
FAILURE TO CLOSE ANY
  REQUEST

	
76


	
SECTION
  16.07  

	
OTHER FEES

	
76


	
 

	
 

	
 


	
ARTICLE XVII

	
 

	
77


	
 

	
 

	
 


	
SECTION
  17.01  

	
EVENTS OF DEFAULT

	
77


	
 

	
 

	
 


	
ARTICLE XVIII

	
 

	
79


	
 

	
 

	
 


	
SECTION
  18.01  

	
REMEDIES; WAIVERS

	
79


	
SECTION
  18.02  

	
WAIVERS; RESCISSION OF
  DECLARATION

	
79


	
SECTION
  18.03  

	
THE LENDER’S RIGHT TO
  PROTECT COLLATERAL AND PERFORM COVENANTS AND OTHER OBLIGATIONS

	
80


	
SECTION
  18.04  

	
NO REMEDY EXCLUSIVE

	
80


	
SECTION
  18.05  

	
NO WAIVER

	
80


	
SECTION
  18.06  

	
NO NOTICE

	
80


	
SECTION
  18.07  

	
APPLICATION OF PAYMENTS

	
80


	
 

	
 

	
 


	
ARTICLE XIX

	
 

	
80


	
 

	
 

	
 


	
SECTION
  19.01  

	
SPECIAL POOL PURCHASE
  CONTRACT

	
81


	
SECTION
  19.02  

	
ASSIGNMENT OF RIGHTS

	
81


	
SECTION
  19.03  

	
RELEASE OF COLLATERAL

	
81


	
SECTION
  19.04  

	
REPLACEMENT OF LENDER

	
81


	
SECTION
  19.05  

	
FANNIE MAE AND LENDER
  FEES AND EXPENSES

	
81


	
SECTION
  19.06  

	
THIRD-PARTY BENEFICIARY

	
82





iii






	
 

	
 

	
 


	
ARTICLE XX

	
 

	
82


	
 

	
 

	
 


	
SECTION
  20.01  

	
INSURANCE AND REAL
  ESTATE TAXES

	
82


	
SECTION
  20.02  

	
REPLACEMENT RESERVES

	
82


	
 

	
 

	
 


	
ARTICLE XXI

	
 

	
82


	
 

	
 

	
 


	
SECTION
  21.01  

	
SWAP

	
82


	
SECTION
  21.02

	
SWAP TERMS

	
83


	
SECTION
  21.03  

	
SWAP SECURITY AGREEMENT;
  DELIVERY OF SWAP PAYMENTS

	
83


	
SECTION
  21.04  

	
TERMINATION

	
83


	
SECTION
  21.05

	
PERFORMANCE UNDER SWAP
  DOCUMENTS

	
84


	
SECTION
  21.06  

	
APPROVED SWAPS

	
84


	
 

	
 

	
 


	
ARTICLE XXII

	
 

	
84


	
 

	
 

	
 


	
SECTION
  22.01  

	
PERSONAL LIABILITY TO
  THE BORROWER PARTIES

	
84


	
 

	
 

	
 


	
ARTICLE XXIII

	
 

	
85


	
 

	
 

	
 


	
SECTION
  23.01  

	
COUNTERPARTS

	
86


	
SECTION
  23.02  

	
AMENDMENTS, CHANGES AND
  MODIFICATIONS

	
86


	
SECTION
  23.03  

	
PAYMENT OF COSTS, FEES
  AND EXPENSES

	
86


	
SECTION
  23.04  

	
PAYMENT PROCEDURE

	
87


	
SECTION
  23.05  

	
PAYMENTS ON BUSINESS
  DAYS

	
87


	
SECTION
  23.06  

	
CHOICE OF LAW; CONSENT
  TO JURISDICTION; WAIVER OF JURY TRIAL

	
87


	
SECTION
  23.07  

	
SEVERABILITY

	
88


	
SECTION
  23.08  

	
NOTICES

	
88


	
SECTION
  23.09  

	
FURTHER ASSURANCES AND
  CORRECTIVE INSTRUMENTS

	
91


	
SECTION
  23.10  

	
TERM OF THIS AGREEMENT

	
91


	
SECTION
  23.11  

	
ASSIGNMENTS; THIRD-PARTY
  RIGHTS

	
91


	
SECTION
  23.12  

	
HEADINGS

	
91


	
SECTION
  23.13  

	
GENERAL INTERPRETIVE
  PRINCIPLES

	
91


	
SECTION
  23.14  

	
INTERPRETATION

	
92


	
SECTION
  23.15  

	
STANDARDS FOR DECISIONS,
  ETC

	
92


	
SECTION
  23.16  

	
DECISIONS IN WRITING

	
92


	
SECTION
  23.17  

	
JOINT AND SEVERAL
  LIABILITY

	
92





iv






	
 

	
 

	
 


	
SCHEDULE I

	
-

	
Summary of Credit Facility Structure


	
EXHIBIT A

	
-

	
Schedule of Initial Mortgaged Properties and Initial
  Valuations


	
EXHIBIT B

	
-

	
Fixed Facility Note


	
EXHIBIT C

	
-

	
Intentionally Omitted


	
EXHIBIT D

	
-

	
Compliance Certificate


	
EXHIBIT E

	
-

	
Sample Facility Debt Service


	
EXHIBIT F

	
-

	
Organizational Certificate


	
EXHIBIT G

	
-

	
Intentionally Omitted


	
EXHIBIT H

	
-

	
Revolving Credit Endorsement


	
EXHIBIT I

	
-

	
Variable Facility Note


	
EXHIBIT J

	
-

	
Tie-In Endorsement


	
EXHIBIT K

	
-

	
Conversion Request


	
EXHIBIT L

	
-

	
Conversion Amendment


	
EXHIBIT M

	
-

	
Rate Setting Form


	
EXHIBIT N

	
-

	
Rate Confirmation Form


	
EXHIBIT O

	
-

	
Advance Confirmation Instrument


	
EXHIBIT P

	
-

	
Future Advance Request


	
EXHIBIT Q

	
-

	
Reborrowing Request


	
EXHIBIT R

	
-

	
Reborrowing Amendment


	
EXHIBIT S

	
-

	
Collateral Addition Request


	
EXHIBIT T

	
-

	
Collateral Release Request


	
EXHIBIT U

	
-

	
Confirmation of Obligations


	
EXHIBIT V

	
-

	
Credit Facility Expansion Request


	
EXHIBIT W

	
-

	
Variable Facility Termination Request


	
EXHIBIT X

	
-

	
Variable Facility Termination Document


	
EXHIBIT Y

	
-

	
Credit Facility Termination Request


	
EXHIBIT Z

	
-

	
Collateral Substitution Request


	
EXHIBIT AA

	
-

	
Schedule of Approved Property Management Agreements


	
EXHIBIT BB

	
-

	
Independent Unit Encumbrances


	
EXHIBIT CC

	
-

	
Collateral Addition Description Package


	
EXHIBIT DD

	
-

	
Collateral Substitution Description Package


	
EXHIBIT EE

	
-

	
Collateral Substitution Supporting Documents


	
EXHIBIT FF

	
-

	
Amended and Restated Guaranty


	
EXHIBIT GG 

	
-

	
Swap Security Agreement


	
EXHIBIT HH

	
-

	
DUS Properties


	
EXHIBIT II

	
-

	
Approved Swaps





v






SCHEDULE I

(MAA I)


          SUMMARY
OF CREDIT FACILITY STRUCTURE – PRIOR TO NOVEMBER 1, 2004


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Facility Fees

	
 

	
Standby Fee

	
 

	
Facility Termination Fee


	
Initial Commitment

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
$        110,000,000

	
 

	
57
  bps (1)

	
 

	
 

	
 

	
 


	
Variable

	
$            9,367,000

	
 

	
67
  bps

	
 

	
15
  bps

	
 

	
18
  bps


	
Total

	
$        119,367,000

	
 

	
 

	
 

	
 

	
 

	
through
  Variable Facility Termination Date as calculated in Agreement


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Original Expanded Commitment

	
Amounts above

	
 

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
$        110,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Variable

	
$            9,367,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Total

	
$        119,367,000

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
Up
  to

	
 

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
$        110,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Variable

	
$          28,382,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Total

	
$        138,382,000

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
Net
  Amount Equal to

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
-

	
 

	
65
  bps (1) (2)

	
 

	
 

	
 


	
Variable

	
$          19,015,000

	
 

	
72
  bps

	
 

	
15
  bps

	
 

	
18
  bps


	
Total

	
$          19,015,000

	
 

	
 

	
 

	
 

	
 

	
through
  Variable Facility Termination Date as calculated in Agreement


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Amended and Restated 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Commitment (4)

	
Amounts
  above

	
 

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
$        110,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Variable

	
 $          28,382,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Total

	
 $        138,382,000

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
Up
  to

	
 

	
 

	
 

	
 

	
 

	
 


	
Fixed

	
 $        110,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Variable

	
$          50,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
Total

	
 $        160,000,000

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
Net
  Amount Equal to

	
 

	
 

	
 

	
 


	
Fixed

	
-

	
 

	
50
  bps (1) (3)

	
 

	
 

	
 


	
Variable

	
 $          21,618,000

	
 

	
60
  bps

	
 

	
15
  bps

	
 

	
18
  bps


	
Total

	
 $          21,618,000

	
 

	
 

	
 

	
 

	
 

	
through
  Variable Facility Termination Date as calculated in Agreement





NOTES:


(1)
All Fixed Facility Fees reflect interest only option.


(2) The Fixed Facility
Fee for this tranche with the amortizing option is 57 bps.


(3)
The Fixed Facility Fee for this tranche with the amortizing option is 43.5 bps.


(4)
Although not shown here, the Amended and Restated Commitment includes those
amounts by which the Commitment is expanded beyond the amounts shown here to
reflect additional capacity as result of the payoff of the Blackstone JV
properties up to a total maximum commitment of $250 million.


I-1






          SUMMARY
OF CREDIT FACILITY STRUCTURE – ON AND AFTER NOVEMBER 1, 2004


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Facility Fees

	  
	
Standby Fee

	  
	
Facility Termination Fee


	
FIXED

	
 

	
 

	  
	
 

	  
	
18
  bps - through Variable Facility Termination Date as calculated in Agreement


	
Existing Fixed Advances

	
$110,000,000

	
57 bps (1)

	  
	
 

	  
	
 


	
 


	
Future Fixed Advances drawn (i) after 10/31/2004
  and prior to 1/1/2006 or (ii) from the Reserved Amount at any time (3)

	
 

	
52 bps (1) (2)

	  
	
15 bps

	  
	
 


	
 


	
Future Fixed Advances drawn after 1/1/2006 and
  not from the Reserved Amount

	
 

	
(3) The number of basis points determined at the
  time of such increase or conversion by Lender as the Fixed Facility Fee for
  such Fixed Advances

	  
	
(3) The number of basis points determined by
  Lender as the Standby Fee at the time of the increase of the Commitment

	  
	
 


	
 


	
 

	
 

	
 

	  
	
 

	  
	
 


	
VARIABLE

	
 

	
 

	  
	
 

	  
	
18
  bps - through Variable Facility Termination Date as calculated in Agreement


	
 


	
Variable Advances (i) Rolling or drawn after
  10/31/2004 and prior to 1/1/2006 (ii) drawn from the Reserved Amount Reserved
  Amount at any time (3)

	
 

	
62 bps

	  
	
15 bps

	  
	
 


	
 


	
Variable Advances Rolling after 1/1/2006

	
 

	
62 bps

	  
	
 

	  
	
 


	
 


	
Variable Advances drawn after 1/1/2006 and not
  from the Reserved Amount

	
 

	
(3) The number of basis points determined at the
  time of such increase or conversion by Lender as the Variable Facility Fee
  for such Variable Advances

	  
	
(3) The number of basis points determined by
  Lender as the Standby Fee at the time of the increase of the Commitment

	  
	
 





NOTES:


(1)
All Fixed Facility Fees reflect interest only option.


(2) The Fixed Facility
Fee after 10/31/2004 with the amortizing option is 45.5 bps.


(3)All
Fees for the Commitment are subject to change after January 1, 2006 unless the
Borrower pays the Rate Preservation Fee in which case the pricing shall not
change for so long as the Rate Preservation Fee is paid, provided that in no
event shall the Fixed Facility Fee exceed 72 basis points.


I-2






(MAA I)


MID-AMERICA
APARTMENT COMMUNITIES LP

SUMMARY OF CREDIT FACILITY STRUCTURE


MAA I Maturity Dates and Availability Period


	
 

	
 

	
 

	
 

	
 


	
 

	  
	
Variable Facility 

  Termination Date 

  (Variable Advance 

  Maturity Date)

	 
	
Fixed Facility 

  Availability Period


	
Aggregate Commitment equal to or less than $80,000,000 (1)

	  
	
December 1, 2011

	  
	
December 1, 2006


	
 


	
Aggregate Commitment greater than $80,000,000 but less than $160,000,000
  (1)

	  
	
December 1, 2012

	  
	
December 1, 2007


	
 


	
Aggregate Commitment greater than $160,000,000 (1)

	  
	
December 1, 2013

	  
	
December 1, 2008





(1)
If the Borrower has both Fixed and Variable Commitments, the Variable
Commitment shall be designated as the first advance for the purposes of
determining maturity.


MAA I Existing Fixed Note Maturity Dates


	
 

	
 

	
 

	
 

	
 


	
Note Amount

	 	
Date of Note

	 	
Maturity Date


	 

	 	 

	 	 


	
$65,000,000

	 	
August 23, 2000

	 	
November 1, 2009


	
$25,000,000

	 	
May 23, 2001

	 	
July 1, 2008


	
$20,000,000

	 	
November 28, 2001

	 	
December 1, 2006










(MAA I)

MAA II Maturity Dates and Availability Period


	
 

	
 

	
 

	
 

	
 


	
 

	 	
Variable Facility 

  Termination Date 

  (on Variable 

  Advance Maturity 

  Date)

	 	
Fixed Facility 

  Availability Period


	
Aggregate Commitment equal to or less than $120,000,000 (1)

	 	
December 1, 2010

	 	
December 1, 2005


	
 


	
Aggregate Commitment greater than $120,000,000 but less than
  $160,000,000 (1)

	 	
December 1, 2011

	 	
December 1, 2006


	
 


	
Aggregate Commitment greater than $160,000,000 but less than
  $200,000,000 (1)

	 	
December 1, 2012

	 	
December 1, 2007


	
 


	
Aggregate Commitment greater than $200,000,000 but less than
  $320,000,000 (1)

	 	
December 1, 2013

	 	
December 1, 2008


	
 


	
Aggregate Commitment greater than $320,000,000 (1)

	 	
December 1, 2014

	 	
December 1, 2009





(1)
If the Borrower has both Fixed and Variable Commitments, the Variable
Commitment shall be designated as the first advance for the purposes of
determining maturity.


A-2






(MAA I)


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MAA #1

  	
   

  	
  MAA #2

  	
   

  	
  Total

  
	
   

  	
   

  	 


  	
   

  	 


  	
   

  	 


  
	
  Initial Commitment

  	
   

  	
  $ 119,367,000

  	
   

  	
  $ 183,372,000

  	
   

  	
  $ 302,739,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Original Expanded Commitment

  	
   

  	
  Amounts above

  $  119,367,000
Up to
$  138,382,000

Net Amount
  Equal to
$  19,015,000

  	
   

  	
  Amounts above

  $
  183,372,000
Up to
$  413,374,000

Net Amount
  Equal to
$  230,002,000

  	
   

  	
  Amounts above

  $  302,739,000
Up to
$  551,756,000

Net Amount
  Equal to
$  249,017,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amended and Restated Commitment Count

  	
   

  	
  Amounts above

  $  138,382,000
Up to
$  250,000,000

Net Amount
  Equal to
$  21,618,000

  	
   

  	
  Amounts above

  $  413,374,000
Up to
$  600,000,000

Net Amount
  Equal to
$  37,626,000

  	
   

  	
  Amounts above

  $  551,756,000
Up to
$  850,000,000

Net Amount
  Equal to
$  159,244,000

  
	
  At 4-01-04:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Available

  	
   

  	
  $
  183,769,000

  	
   

  	
  $
  457,526,000

  	
   

  	
  $
  641,295,000

  
	
  Collateralized incl new additions

  	
   

  	
  $
  183,769,000

  	
   

  	
  $
  457,526,000

  	
   

  	
  $
  641,295,000

  
	
  Net available but uncollateralized

  	
   

  	
  $     0

  	
   

  	
  $   0

  	
   

  	
  $   0

  
	
  Expansion capacity

  	
   

  	
  $
  250,000,000

  	
   

  	
  $ 600,000,000

  	
   

  	
  $
  850,000,000

  
	
  Expansion less collateralized $

  	
   

  	
  $
  66,231,000

  	
   

  	
  $ 142,474,000

  	
   

  	
   

  
	
  Increase in availability

  	
   

  	
  $
  66,231,000

  	
   

  	
  $ 142,474,000

  	
   

  	
   

  
	
  4/1/04 Additions

  	
   

  	
  $
  24,262,000

  	
   

  	
  $
  20,918,000

  	
   

  	
   

  







A-3






(MAA I)


EXHIBIT A TO THIRD AMENDED AND
RESTATED 

MASTER CREDIT FACILITY AGREEMENT


SCHEDULE OF INITIAL MORTGAGED
PROPERTIES

AND INITIAL VALUATIONS


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Property
  Name

	  
	
County

	  
	
Property
  Address

	  
	
Initial
  Valuation


	
Paddock Club Brandon I
  & II

	  
	
Hillsborough

	  
	
Brandon, FL

	  
	
$29,120,000


	
Paddock Club Mandarin

	  
	
Duval

	  
	
Jacksonville, FL

	  
	
$17,830,000


	
Woodbridge at the Lake

	  
	
Duval

	  
	
Jacksonville, FL

	  
	
$7,620,000


	
Paddock Park Ocala II

	  
	
Marion

	  
	
Ocala, FL

	  
	
$15,530,000


	
Paddock Club
  Tallahassee I

	  
	
Leon

	  
	
Tallahassee, FL

	  
	
$11,840,000


	
Courtyards at Campbell
  Apartments

	  
	
Dallas

	  
	
Dallas, TX

	  
	
$10,910,000


	
Deer Run Apartments

	  
	
Dallas

	  
	
Dallas, TX

	  
	
$12,930,000


	
Paddock Club
  Gainesville

	  
	
Alachua

	  
	
Gainesville, FL

	  
	
$17,100,000


	
Kenwood Club

	  
	
Harris

	  
	
Katy, TX

	  
	
$18,000,000


	
Balcones Woods

	  
	
Travis

	  
	
Austin, TX

	  
	
$22,000,000


	
Paddock Club Panama
  City 

  Apartments

	  
	
Bay

	  
	
Panama City, FL

	  
	
$13,000,000


	
Paddock Club
  Tallahassee II 

  Apartments

	  
	
Leon

	  
	
Tallahassee, FL

	  
	
$6,675,000


	
The Corners

	  
	
Forsyth

	  
	
Winston-Salem, NC

	  
	
$8,170,000


	
Jefferson Pines

	  
	
Harris

	  
	
Houston, TX

	  
	
$21,100,000


	
Los Rios

	  
	
Collin

	  
	
Plano, TX

	  
	
$32,500,000





A-4






EXHIBIT B TO THIRD AMENDED AND
RESTATED 

MASTER CREDIT FACILITY AGREEMENT


FIXED
FACILITY NOTE






	
 

	
 


	
US $____________
	
________________________





          FOR VALUE
RECEIVED, the undersigned (collectively, the “Borrower”) promise to pay to
the order of PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”)
the principal sum of ___________________________ AND NO/100 DOLLARS
(US $____________), with interest accruing on the unpaid principal balance
from the date of disbursement until fully paid at the annual rate of             percent (____%).


          This
Note is executed and delivered by Borrower pursuant to that certain Third
Amended and Restated Master Credit Facility Agreement, dated as of March 30,
2004 by and among Borrower, Mid-America Apartments of Texas, L.P., a Texas
limited partnership, and Lender (as amended from time to time, the “Master
Agreement”), to evidence the obligation of Borrower to repay a Fixed
Facility Advance made by Lender to Borrower in accordance with the terms of the
Master Agreement. This Note is entitled to the benefit and security of the Loan
Documents provided for in the Master Agreement, to which reference is hereby
made for a statement of all of the terms and conditions under which the Fixed
Facility Advance evidenced hereby is made.


          1.          Defined
Terms. As used in this Note, (i) the term “Lender”
means the holder of this Note, (ii) the term “Indebtedness” means the
principal of, interest on, or any other amounts due at any time under, this
Note, the Security Instruments or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances to protect the security
of the Security Instruments under Section 12 of the Security Instruments and
(iii) a “Business
Day” means any day other than a Saturday, Sunday or any day on which
Lender is not open for business. Event of Default and other capitalized terms
used but not defined in this Note shall have the meanings given to such terms
in the Master Agreement (or, if not defined in the Master Agreement, as defined
in the Security Instruments (as defined in Paragraph 5).


          2.          Address
for Payment. All payments due under this Note shall be
payable at 2200 Ross Avenue, Suite 4900E, Dallas, Texas 75201, or such other
place as may be designated by written notice to Borrower from or on behalf of
Lender.


          3.          Payment
of Principal and Interest. Principal and interest shall be
paid as follows:


          (a)          Unless
disbursement of principal is made by Lender to Borrower on the first day of the
month, interest for the period beginning on the date of disbursement and ending
on 


B-1






and including the last day of the month in which such
disbursement is made shall be payable simultaneously with the execution of this
Note. Interest under this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.


          (b)          
Consecutive monthly installments of interest, each in the amount of  Dollars (US $______), shall
be payable on the first day of each month
beginning on _________________, until the entire unpaid principal balance
evidenced by this Note is fully paid. Any accrued interest remaining past due
for 30 days or more shall be added to and become part of the unpaid principal
balance and shall bear interest at the rate or rates specified in this Note,
and any reference below to “accrued interest” shall refer to accrued interest
which has not become part of the unpaid principal balance. Any remaining
principal and interest shall be due and payable on _______________, 200_or
on any earlier date on which the unpaid principal balance of this Note becomes
due and payable, by acceleration or otherwise (the “Maturity Date”). The unpaid
principal balance shall continue to bear interest after the Maturity Date at
the Default Rate set forth in this Note until and including the date on which
it is paid in full.


          (c)          Any
regularly scheduled monthly installment of interest that is received by Lender
before the date it is due shall be deemed to have been received on the due date
solely for the purpose of calculating interest due.


          4.          Application
of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness that is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender’s application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.


          5.          Security.
The Indebtedness is secured, among other things, by
multifamily mortgages, deeds to secure debt or deeds of trust dated as of the
date of this Note (the “Security Instruments”), and reference is
made to the Security Instruments for other rights of Lender concerning the
collateral for the Indebtedness.


          6.          Acceleration.
If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note and any other Loan Document shall at once become due and payable, at the
option of Lender, without any prior notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.


B-2






          7.          Late
Charge. If any monthly installment due hereunder is not
received by Lender on or before the 10th day of each month or if any
other amount payable under this Note or under the Security Instruments or any
other Loan Document is not received by Lender within 10 days after the date
such amount is due, counting from and including the date such amount is due,
Borrower shall pay to Lender, immediately and without demand by Lender, a late
charge equal to 5 percent of such monthly installment or other amount due.
Borrower acknowledges that its failure to make timely payments will cause
Lender to incur additional expenses in servicing and processing the loan
evidenced by this Note (the “Loan”), and that it is extremely difficult
and impractical to determine those additional expenses. Borrower agrees that
the late charge payable pursuant to this Paragraph represents a fair and
reasonable estimate, taking into account all circumstances existing on the date
of this Note, of the additional expenses Lender will incur by reason of such
late payment. The late charge is payable in addition to, and not in lieu of,
any interest payable at the Default Rate pursuant to Paragraph 8.


          8.          Default
Rate. So long as any monthly installment or any other payment
due under this Note remains past due for 30 days or more, interest under this
Note shall accrue on the unpaid principal balance from the earlier of the due
date of the first unpaid monthly installment or other payment due, as
applicable, at a rate (the “Default Rate”) equal to the lesser of 4
percentage points above the rate stated in the first paragraph of this Note or
the maximum interest rate which may be collected from Borrower under applicable
law. If the unpaid principal balance and all accrued interest are not paid in
full on the Maturity Date, the unpaid principal balance and all accrued
interest shall bear interest from the Maturity Date at the Default Rate.
Borrower also acknowledges that its failure to make timely payments will cause
Lender to incur additional expenses in servicing and processing the Loan, that,
during the time that any monthly installment or payment under this Note is
delinquent for more than 30 days, Lender will incur additional costs and
expenses arising from its loss of the use of the money due and from the adverse
impact on Lender’s ability to meet its other obligations and to take advantage
of other investment opportunities, and that it is extremely difficult and
impractical to determine those additional costs and expenses. Borrower also
acknowledges that, during the time that any monthly installment or other
payment due under this Note is delinquent for more than 30 days, Lender’s risk
of nonpayment of this Note will be materially increased and Lender is entitled
to be compensated for such increased risk. Borrower agrees that the increase in
the rate of interest payable under this Note to the Default Rate represents a
fair and reasonable estimate, taking into account all circumstances existing on
the date of this Note, of the additional costs and expenses Lender will incur
by reason of Borrower’s delinquent payment and the additional compensation
Lender is entitled to receive for the increased risks of nonpayment associated
with a delinquent loan.


          9.          Limits
on Personal Liability.


B-3






          The
provisions of Article 22.01 of the Master Agreement (entitled “Limits on
Personal Liability”) are hereby incorporated into this Note by this
reference to the fullest extent as if the text of such Article were set forth
in its entirety herein.


          10.          Voluntary
and Involuntary Prepayments.


          (a)          A
prepayment premium shall be payable in connection with any prepayment made
under this Note as provided below:


	
 

	
 

	
 

	
 

	
 


	
 

	
          (1)          Borrower
  may voluntarily prepay all (but not less than all) of the unpaid principal
  balance of this Note only on the last calendar day of a calendar month and
  only if Borrower has complied with all of the following:


	
 

	
 


	
 

	
 

	
 

	
(i)

	
Borrower must give Lender at least 30 days, but not
  more than 60 days, prior written notice of its intention to make such
  prepayment (the “Prepayment Notice”). 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
(ii)

	
The Prepayment Notice shall be addressed to Lender
  and shall include, at a minimum, the date upon which Borrower intends to make
  the prepayment (the “Intended Prepayment Date”). Borrower acknowledges that
  the Lender is not required to accept any voluntary prepayment of this Note on
  any day other than the last calendar day of a calendar month. If the last
  calendar day of a calendar month is not a Business Day, then the Borrower
  must make the payment on the Business Day immediately preceding the last
  calendar day of a calendar month. For all purposes, including the accrual of
  interest and the calculation of the prepayment premium, any prepayment
  received by Lender on any day other than the last calendar day of a calendar
  month shall be deemed to have been received on the last calendar day of the
  month in which such prepayment occurs. 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
(iii)

	
Any prepayment shall be made by paying (A) the
  amount of principal being prepaid, (B) all accrued interest, (C) all other
  sums due Lender at the time of such prepayment, and (D) the prepayment
  premium calculated pursuant to Schedule A. 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
(iv)

	
If, for any reason, Borrower fails to prepay this
  Note (i) within five (5) Business Days after the Intended Prepayment Date or
  (ii) if the prepayment occurs in a month other than the month stated in the
  original Prepayment Notice, then Lender shall have the right, but 





B-4






	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
not the obligation, to recalculate the prepayment
  premium based upon the date that Borrower actually prepays this Note and to
  make such calculation as described in Schedule A attached hereto. For
  purposes of such recalculation, such new prepayment date shall be deemed the
  “Intended Prepayment Date.” 


	
 


	
 

	
          (2)          
  Upon Lender’s exercise of any right of acceleration under this Note, Borrower
  shall pay to Lender, in addition to the entire unpaid principal balance of
  this Note outstanding at the time of the acceleration, (A) all accrued
  interest and all other sums due Lender under this Note and the other Loan
  Documents, and (B) the prepayment premium calculated pursuant to
  Schedule A.


	
 

	
 

	
 


	
 

	
          (3)
            Any application
  by Lender of any collateral or other security to the repayment of any portion
  of the unpaid principal balance of this Note prior to the Maturity Date and
  in the absence of acceleration shall be deemed to be a partial prepayment by
  Borrower, requiring the payment to Lender by Borrower of a prepayment
  premium. 





          (b)          Notwithstanding
the provisions of Paragraph 10(a), no prepayment premium shall be payable with
respect to any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under any Security Instrument or as
provided in subparagraph (c) of Schedule A. 


          (c)          Schedule
A is hereby incorporated by reference into this Note.


          (d)          Any
required prepayment of less than the entire unpaid principal balance of this
Note shall not extend or postpone the due date of any subsequent monthly
installments or change the amount of such installments, unless Lender agrees
otherwise in writing.


          (e)          Borrower
recognizes that any prepayment of the unpaid principal balance of this Note,
whether voluntary or involuntary or resulting from a default by Borrower, will
result in Lender’s incurring loss, including reinvestment loss, additional
expense and frustration or impairment of Lender’s ability to meet its
commitments to third parties. Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages.
Borrower therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth on Schedule A represents a reasonable estimate of
the damages Lender will incur because of a prepayment.


          (f)          Borrower
further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the loan evidenced by this Note, and 


B-5






acknowledges
that the terms of this Note are in other respects more favorable to Borrower as
a result of Borrower’s voluntary agreement to the prepayment premium
provisions.


          11.     Costs
and Expenses.  Borrower
shall pay on demand all expenses and costs, including fees and out-of-pocket
expenses of attorneys and expert witnesses and costs of investigation, incurred
by Lender as a result of any default under this Note or in connection with
efforts to collect any amount due under this Note, or to enforce the provisions
of any of the other Loan Documents, including those incurred in post-judgment
collection efforts and in any bankruptcy proceeding (including any action for
relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial
foreclosure proceeding.


          12.     
Forbearance.
Any forbearance by Lender in exercising any right or remedy under this
Note, the Security Instruments, or any other Loan Document or otherwise
afforded by applicable law, shall not be a waiver of or preclude the exercise
of that or any other right or remedy.
The acceptance by Lender of any payment after the due date of such
payment, or in an amount which is less than the required payment, shall not be
a waiver of Lender’s right to require prompt payment when due of all other
payments or to exercise any right or remedy with respect to any failure to make
prompt payment.  Enforcement by Lender
of any security for Borrower’s obligations under this Note shall not constitute
an election by Lender of remedies so as to preclude the exercise of any other
right or remedy available to Lender.


          13.     Waivers.  Except
as expressly
provided in the Master Agreement, presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness are waived by Borrower and all
endorsers and guarantors of this Note and all other third party obligors.


          14.     Loan
Charges.
Borrower agrees to pay an effective rate of interest equal to the sum of
the interest rate provided for in this Note and any additional rate of interest
resulting from any other charges of interest or in the nature of interest paid
or to be paid in connection with the loan evidenced by this Note and any other
fees or amounts to be paid by Borrower pursuant to any of the other Loan
Documents.  Neither this Note nor any of
the other Loan Documents shall be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate
greater than the maximum interest rate permitted to be charged under applicable
law.  If any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower in
connection with the Loan is interpreted so that any interest or other charge
provided for in any Loan Document, whether considered separately or together
with other charges provided for in any other Loan Document, violates that law,
and Borrower is entitled to the benefit of that law, that interest or charge is
hereby reduced to the extent necessary to eliminate that violation.  The amounts, if any, previously paid to Lender
in excess of the permitted amounts shall be applied by Lender to reduce the
unpaid principal balance of this Note.
For the purpose of determining whether any applicable law limiting the 


B-6






amount of
interest or other charges permitted to be collected from Borrower has been
violated, all Indebtedness that constitutes interest, as well as all other
charges made in connection with the Indebtedness that constitute interest,
shall be deemed to be allocated and spread ratably over the stated term of the
Note.  Unless otherwise required by applicable
law, such allocation and spreading shall be effected in such a manner that the
rate of interest so computed is uniform throughout the stated term of the Note.


          15.     Commercial
Purpose.  Borrower
represents that the Indebtedness is being incurred by Borrower solely for the
purpose of carrying on a business or commercial enterprise, and not for
personal, family or household purposes.


          16.     Counting
of Days.  Except
where otherwise specifically provided, any reference in this Note to a period
of “days” means calendar days, not Business Days.


          17.     Governing
Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY.  The provisions of
Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Note by
this reference to the fullest extent as if the text of such Section were set
forth in its entirety herein.


          18.     Captions.
The captions of the paragraphs of
this Note are for convenience only and shall be disregarded in construing this
Note.


          19.     Notices.  All
notices, demands and other
communications required or permitted to be given by Lender to Borrower pursuant
to this Note shall be given in accordance with Section 23.08 of the Master
Agreement.


          20.     Security
for this Note.
The indebtedness evidenced by this Note is secured by other Security
Documents executed by Borrower or its Affiliates.  Reference is made hereby to the Master Agreement and the Security
Documents for additional rights and remedies of Lender relating to the
indebtedness evidenced by this Note.
Each Security Document shall be released in accordance with the
provisions of the Master Agreement and the Security Documents.


          21.     Fixed
Facility.  This
Note is issued as part of the Fixed Facility established in accordance with the
terms of the Master Agreement.  Borrower
may not re-borrow any amounts under this Note which it has previously borrowed
and repaid under this Note.


          22.     Cross-Default
with Master Agreement.  The occurrence of an Event of Default under the Master Agreement
shall constitute an “Event of Default” under this Note, and, accordingly, upon
the occurrence of an Event of Default under the Master Agreement, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.


B-7






          IN
WITNESS WHEREOF, Borrower has signed and delivered
this Note under seal or has caused this Note to be signed and delivered under
seal by its duly authorized representative.
Borrower intends that this Note shall be deemed to be signed and
delivered as a sealed instrument.


	
 

	
 

	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENTS, L.P., a Tennessee 

  limited partnership


	
 

	
 

	
 


	
 

	
By:

	
Mid-America
  Apartment Communities, Inc., a Tennessee corporation, its general partner


	
 

	
 

	
 


	
SEAL

	
 

	
By:

	
 


	
 

	
 

	
 

	 


	
 

	
 

	
Name:

	
 


	
 

	
 

	
 

	 


	
 

	
 

	
Title:

	
 


	
 

	
 

	
 

	 


	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENT COMMUNITIES, INC., a Tennessee corporation


	
 

	
 


	
SEAL

	
By:

	
 


	
 

	
 

	 


	
 

	
Name:

	
 


	
 

	
 

	 


	
 

	
Title:

	
 


	
 

	
 

	 


	
 

	
 

	
 





B-8






          Pay
to the order of _________________, without recourse.


	
 

	
 

	
 

	
 


	
 

	
PRUDENTIAL
  MULTIFAMILY MORTGAGE,

  INC., a Delaware corporation

	
 


	
 

	
 

	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
Name:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
Title:

	
 

	
 


	
 

	
 

	 

	
 





B-9






ATTACHED SCHEDULES.  The following Schedules are attached to this
Note:



	
 

	
 

	
 

	
 

	
 


	
x

	
 

	
Schedule A Prepayment Premium (required)


	
 

	
 

	
 


	
o

	
 

	
Schedule B Modifications to Multifamily
  Note





B-10






SCHEDULE
A


PREPAYMENT
PREMIUM


Any prepayment
premium payable under Paragraph 10 of this Note shall be computed as follows:


	
 

	
 

	
 


	
 

	
(a)

	
If the
  prepayment is made at any time after the date of this Note and before the
  last calendar day of ____________, ____ (“Yield Maintenance Period End Date”)
  [insert
  the appropriate month and year, six months prior to the Maturity Date],
  the prepayment premium shall be the greater of: 








	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
(i)

	
1% of the
  amount of principal being prepaid; or


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
(ii)

	
The product
  obtained by multiplying:


	
 

	
 

	
 


	
 

	
 

	
(A)

	
the amount
  of principal being prepaid,


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
by

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
(B)

	
the
  difference obtained by subtracting from
  the interest rate on this Note the yield rate (the “Yield Rate”)
  on the __________% U.S. Treasury Security due _____________________ (the “Specified
  U.S. Treasury Security”), as the Yield Rate is reported in The Wall
  Street Journal on the twenty-fifth Business Day preceding (x) the
  Intended Prepayment Date, or (y) the date Lender accelerates the Loan or
  otherwise accepts a prepayment pursuant to Paragraph 10(a)(3) of this Note,


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
by

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
(C)

	
the present
  value factor calculated using the following formula:








	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
1 - (1 + r)-n/12

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
 

	
r

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
[r =          Yield Rate





B-11






	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
n =

	
the number
  of months remaining between (1) either of the following: (x) in the
  case of a voluntary prepayment, the last calendar day of the calendar month
  during which the prepayment is made, or (y) in any other case, the date
  on which Lender accelerates the unpaid principal balance of this Note and
  (2) the Yield Maintenance Period End Date]








	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
In the event
  that no Yield Rate is published for the Specified U.S. Treasury Security,
  then the nearest equivalent U.S. Treasury Security shall be selected at
  Lender’s discretion.  If the
  publication of such Yield Rates in The Wall Street Journal is discontinued,
  Lender shall determine such Yield Rates from another source selected by
  Lender.


	
 

	
 

	
 

	
 








	
 

	
 

	
 


	
 

	
(b)

	
If the
  prepayment is made on or after the Yield Maintenance Period End Date but
  before the last calendar day of the 4th month prior to the month in which the
  Maturity Date occurs, the prepayment premium shall be 1% of the amount of
  principal being prepaid.


	
 

	
 

	
 


	
 

	
(c)

	
Notwithstanding
  the provisions of Paragraph 10(a) of this Note, no prepayment premium shall
  be payable with respect to any prepayment made on or after the last calendar
  day of the 4th month prior to the month in which the Maturity Date occurs.








	
 

	
 

	
 

	
 


	
 

	 

	
 

	
 


	
 

	
INITIAL(S)

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	 

	
 

	
 


	
 

	
INITIAL(S)

	
 

	
 





B-12






EXHIBIT C TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


INTENTIONALLY
OMITTED






EXHIBIT D TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


COMPLIANCE CERTIFICATE


     The
undersigned (individually and collectively, the “Borrower Parties”)
hereby certify to Prudential Multifamily Mortgage, Inc., a Delaware corporation
(the “Lender”)
and Fannie Mae as follows:


          Section
1.     Master Agreement.  The Borrower Parties are parties to that
certain Third Amended and Restated Master Credit Facility Agreement, dated as
of March 30, 2004 by and among the Borrower Parties and the Lender (as amended
from time to time, the “Master Agreement”).  The rights of the Lender under the Master
Agreement have been assigned to Fannie Mae.
This Certificate is issued pursuant to the terms of the Master
Agreement.


          Section
2.     Satisfaction of Conditions.  The Borrower Parties each hereby represents,
warrants and covenants to the Lender that all conditions to the Request with
respect to which this Certificate is issued have been satisfied.


          Section
3.     Capitalized Terms.  All capitalized terms used but not defined
in this Certificate shall have the meanings ascribed to such terms in the
Master Agreement.


	
 

	
 

	
 


	
Dated:

	
 ________________________

	
 








	
 

	
 

	
 

	
 


	
 

	
THE BORROWER PARTIES:


	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENT COMMUNITIES, 

  INC., a Tennessee corporation


	
 

	
 

	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
          Simon
  R.C. Wadsworth

	
 


	
 

	
 

	
          Executive
  Vice President

	
 


	
 

	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENTS, L.P., 

  a Tennessee limited partnership


	
 

	
 

	
 

	
 


	
 

	
By:

	
Mid-America
  Apartment Communities, Inc., 

  a Tennessee corporation, its general partner





D-1






	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
 

	
          Simon
  R.C. Wadsworth

	
 


	
 

	
 

	
 

	
          Executive
  Vice President

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENTS OF TEXAS, L.P.,

  a Texas limited partnership


	
 

	
 

	
 

	
 

	
 


	
 

	
By:

	
MAC of
  Delaware, Inc., a Delaware corporation,
 its general partner


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
Name:

	
 

	
 

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
Its:

	
 

	
 

	
 


	
 

	
 

	
 

	 

	
 





D-2






EXHIBIT
E TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


SAMPLE
FACILITY DEBT SERVICE


	
 

	
 

	
 

	
 

	
 


	
For this example:

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
- Total Credit Facility Commitment amount
  is

	
 

	
$

	
120,000,000

	
 


	
- Variable Facility Commitment amount is

	
 

	
$

	
10,000,000

	
 


	
- Fixed Facility Commitment amount is

	
 

	
$

	
110,000,000

	
 


	
- Total Variable Facility Advances
  outstanding is

	
 

	
$

	
10,000,000

	
 


	
- Total Fixed Facility Advances outstanding
  is

	
 

	
$

	
110,000,000

	
 


	
- Unused Capacity is

	
 

	
 

	
0

	
 


	
 


	
- Variable Facility Coupon Rate is

	
 

	
 

	
3.0

	
%


	
- Fixed Facility Coupon Rate is

	
 

	
 

	
6.0

	
%


	
- Fixed Facility Amortization Period is

	
 

	
 

	
30 years

	
 


	
- Standby Fee is

	
 

	
 

	
15 bp/yr.

	
 


	
 

	
 

	
 

	
 

	
 


	
Then:

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Facility
  Debt Service allocable to Variable Facility Advances:

	
 

	
 

	
 

	
 


	
$110,000,000 @ 3.0%, 30 year amortization
=

	
 

	
$

	
TBD 

	
 


	
 

	
 

	
 

	
 

	
 


	
Facility
  Debt Service allocable to Fixed Facility Advances:

	
 

	
 

	
 

	
 


	
$10,000,000 @ 6% 30 year amortization =

	
 

	
$

	
TBD

	
 


	
 

	
 

	
 

	
 

	
 


	
Standby Fee:
  $0 X 15 bp =

	
 

	
$

	
0

	
 


	
 

	
 

	
 

	
 

	
 


	
Facility
  Debt Service =

	
 

	
$

	
TBD per month

	
 





E-1






EXHIBIT F-1 TO THIRD AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT


ORGANIZATIONAL CERTIFICATE
(REIT AND OP)


          I,
the undersigned, Simon R.C. Wadsworth, hereby certify as follows:


          Section
1.     Position.  I am the Executive Vice President of
Mid-America Apartment Communities, Inc., a Tennessee corporation (the “REIT”),
and I am authorized to deliver this Certificate on behalf of the REIT for
itself and as the sole general partner of Mid-America Apartments, L.P., a
Tennessee limited partnership (the “OP”).


          Section
2.     Master Agreement.
The REIT, OP and others (the “Borrower Parties”) entered into that
certain Third Amended and Restated Master Credit Facility Agreement, dated as
of March 30, 2004, by and among the Borrower Parties and  Prudential Multifamily Mortgage, Inc., a
Delaware corporation (the “Lender”) (as amended from time to time,
the “Master
Agreement”).  The rights
of the Lender under the Master Agreement have been assigned to Fannie Mae.  This Certificate is issued pursuant to the
terms of the Master Agreement.


          Section
3.     Due Authorization of Request.  I hereby certify that no action by the
shareholders of the REIT and no action of the partners of the OP is necessary
to duly authorize the execution and delivery of, and the consummation of the
transaction contemplated by, the Request with respect to which this Certificate
is delivered, or, if necessary, that attached as Exhibit A to this Certificate
is a true copy of resolutions duly adopted at a meeting of the board of
directors, partners or members, as the case may be, that authorize the
action.  Any such resolutions are in
full force and effect and are unmodified as of the date of this Certificate.


          Section
4.     No Changes.  Since the date of the most recent
Organizational Certificate delivered to the Lender, or, if there are none,
since the date of the Master Agreement, there have been no changes in any of
the Organizational Documents of the REIT or the OP, except as set forth in
Exhibit B to this Certificate, and the REIT and the OP remain in good standing
or are duly qualified in the jurisdictions in which it is required to be in
good standing or duly qualified under the terms of the Master Agreement.


          Section
5.     Incumbency Certificate.
One or more of the persons authorized to execute and deliver any documents
required to be delivered in connection with the Request are set forth on the
attached Schedule.


          Section
6.     Capitalized Terms.  All capitalized terms used but not defined
in this Certificate shall have the meanings ascribed to such terms in the
Master Agreement.


Dated:  __________________, ______ 


[The rest of this page has been intentionally left blank.]


F-1-1






	
 

	
 

	
 

	
 

	
 


	
 

	
MID-AMERICA
  APARTMENT COMMUNITIES, 

  INC., a Tennessee corporation


	
 

	
 

	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
Simon
  R.C. Wadsworth

	
 


	
 

	
 

	
Executive
  Vice President

	
 


	
 

	
 


	
 

	
MID-AMERICA
  APARTMENTS, L.P., 

  a Tennessee limited partnership


	
 

	
 

	
 

	
 


	
 

	
By:

	
Mid-America
  Apartment Communities, Inc., 

  a Tennessee corporation, its general partner


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	 

	
 


	
 

	
 

	
 

	
          Simon
  R.C. Wadsworth

	
 


	
 

	
 

	
 

	
          Executive
  Vice President

	
 





F-1-2










EXHIBIT A


(See Attached
Resolutions, if any)






EXHIBIT B


None






EXHIBIT
F-2 TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


ORGANIZATIONAL
CERTIFICATE

(GUARANTOR)


          I,
the undersigned, _____________________, hereby certify as follows:


          Section
1.         Position.  I am the ____________________ of MAC of
Delaware, Inc., a Delaware corporation (the “Corporation”) the sole
general partner of MID-AMERICA APARTMENTS OF TEXAS, L.P., a Texas limited
partnership (the “Partnership”, together with the
Corporation, the “Borrower Party”), and I am authorized
to deliver this Certificate on behalf of the Borrower Party.


          Section
2.         Master
Agreement.  The
Partnership is a guarantor under that certain Third Amended and Restated Master
Credit Facility Agreement, dated as of March 30, 2004, by and among Mid-America
Apartment Communities, Inc., a Tennessee corporation, and Mid-America
Apartments, L.P., a Tennessee limited partnership (together, the “Borrower”)
and Prudential Multifamily Mortgage, Inc., a Delaware corporation (the “Lender”)
(as amended from time to time, the “Master Agreement”).  The rights of the Lender under the Master
Agreement have been assigned to Fannie Mae.
This Certificate is issued pursuant to the terms of the Master
Agreement.


          Section
3.         Due
Authorization of Request.  I hereby certify that no action by the shareholders of the
Corporation and no action of the partners of the Partnership is necessary to
duly authorize the execution and delivery of, and the consummation of the
transaction contemplated by, the Expansion Request dated as of even date
herewith, and the Collateral Addition Request dated as of even date herewith
with respect to which this Certificate is delivered, or, if necessary, that attached
as Exhibit A to this Certificate is a true copy of resolutions duly
adopted at a meeting of the board of directors, partners or members, as the
case may be, that authorize the action.
Any such resolutions are in full force and effect and are unmodified as
of the date of this Certificate.


          Section
4.         No
Changes.  Since
the date of the most recent Organizational Certificate delivered to the Lender,
or, if there are none, since the date of the Master Agreement, there have been
no changes in any of the Organizational Documents of the Borrower Party, except
as set forth in Exhibit B to this Certificate, and the Borrower Party
remains in good standing or is duly qualified in the jurisdictions in which it
is required to be in good standing or duly qualified under the terms of the
Master Agreement.


          Section
5.         Incumbency
Certificate. One or more of the persons authorized to
execute and deliver any documents required to be delivered in connection with
the Requests are set forth in the resolutions attached hereto.


          Section
6.         Capitalized
Terms.  All
capitalized terms used but not defined in this Certificate shall have the
meanings ascribed to such terms in the Master Agreement.


F-2-1






Dated as of ____________________, ________


F-2-2






[SIGNATURE PAGE TO
ORGANIZATIONAL CERTIFICATE (GUARANTOR)]


	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
  a Texas limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MAC of Delaware, Inc.,

  
	
   

  	
   

  	
  a Delaware corporation, its general partner

  






	
   

  	
   

  	
   

  	  
	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	 


  	

 

	
   

  	
  Name:

  	
   

  	  
	
   

  	
   

  	 


  	 

	
   

  	
  Its:

  	
   

  	 

	
   

  	
   

  	 


  	 
 
	
   

  	
   

  	
   

  	 




F-2-3






EXHIBIT A


(See Attached
Resolutions, if any)






EXHIBIT B


None






EXHIBIT G TO THIRD AMENDED AND
RESTATED

MASTER CREDIT FACILITY AGREEMENT


INTENTIONALLY OMITTED






EXHIBIT
H TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


FUTURE
ADVANCE AND REVOLVING CREDIT ENDORSEMENT


Attached to and made a part of ____________________
Policy No.


Said policy is amended by adding the following:


	
   

  	
   

  	
   

  
	
  1.

  	
  The Company acknowledges that the insured mortgage
  identified in Schedule A of this Policy secures future advances of principal
  or a revolving credit line and provides for changes in the rate of interest
  calculated pursuant to a formula contained in the insured mortgage.  By this endorsement, the Company insures
  against loss or damage which the insured sustains as a result of:

  
	
   

  	
   

  
	
  a.

  	
   

  	
  The invalidity or unenforceability of the lien of
  the insured mortgage resulting from the provision in the insured mortgage
  providing for changes in the rate of interest.

  
	
   

  	
   

  	
   

  
	
  b.

  	
   

  	
  The loss of priority of the lien of the insured
  mortgage as security for the unpaid principal balance of the loan, together
  with interest as changed in accordance with the provisions of the insured
  mortgage, which loss of priority is caused by changes in the rate of interest
  as provided in the insured mortgage.

  
	
   

  	
   

  	
   

  
	
  c.

  	
   

  	
  The invalidity or unenforceability of the lien of
  the insured mortgage as security for future advances of principal
  indebtedness.

  
	
   

  	
   

  	
   

  
	
  d.

  	
   

  	
  The invalidity or unenforceability of the lien of
  the insured mortgage as a result of fluctuations of the unpaid balance of the
  principal indebtedness.

  
	
   

  	
   

  	
   

  
	
  e.

  	
   

  	
  The priority of any lien or encumbrance over the
  lien of the insured mortgage as security for the principal indebtedness and
  any future advances of principal indebtedness made after the date of the
  policy.

  
	
   

  	
   

  	
   

  
	
  2.

  	
  This endorsement is made a part of the Policy and
  the insurance affected by it is subject to:
  (i) the Exclusions from Coverage except Paragraph 3(d), (ii) the
  provisions of the Conditions and Stipulations except Paragraph 8(d) and (iii)
  the Exceptions contained in Schedule B of the Policy.  In addition, it does not insure against
  loss or damage resulting from:

  
	
   

  	
   

  
	
   

  	
  i.

  	
  Future advances of principal indebtedness made after
  Petition for Relief under the Bankruptcy Code (11 U.S.C.) by or on behalf of
  the mortgagor.

  
	
   

  	
   

  	
   

  
	
   

  	
  ii.

  	
  The loss of priority of future advances of principal
  indebtedness as a result of taxes, assessments, or notice of a federal tax
  lien filed against the mortgagor.

  



H-1






	
   

  	
   

  	
   

  
	
   

  	
  iii.

  	
  The loss of priority of future advances of principal
  indebtedness made after the vestee shown in Schedule A is divested as owner
  of the estate or interest covered by this Policy.

  
	
   

  	
   

  	
   

  
	
   

  	
  iv.

  	
  The loss of priority of future advances of principal
  indebtedness made during any period in which a declared default exists under
  the terms of the insured mortgage.

  
	
   

  	
   

  	
   

  
	
   

  	
  v.

  	
  The loss of priority of a future advance of
  principal indebtedness made after the insured has actual knowledge of the
  existence of liens, encumbrances or other matters affecting the insured
  premises described in Schedule A intervening between the date of the Policy
  and that future advance, as to such intervening lien, encumbrance or other
  matters.

  
	
   

  	
   

  	
   

  
	
   

  	
  vi.

  	
  The fact that the outstanding balance of the
  indebtedness secured by the mortgage is reduced to a zero balance at any
  time, unless the recorded mortgage provides that the reduction of the
  indebtedness to a zero balance shall not cause the mortgage to become
  extinguished by operation of law.

  



The total liability of the Company under said policy,
binder or commitment and under this and any prior endorsements thereto shall
not exceed, in the aggregate, the amount of liability stated on the face of
said policy, binder or commitment, as the same may be specifically amended in
dollar amount by this or any prior endorsements, and the costs which the
Company is obligated to pay under the Conditions and Stipulations of the
policy.


This endorsement is made a part of said policy, binder
or commitment and is subject to all the terms and provisions thereof, except as
modified by the provisions hereof.


Nothing herein contained shall be construed as
extending or changing the effective date of the aforesaid policy, binder or
commitment unless otherwise expressly stated.


[The rest of this
page has been left blank intentionally.]


H-2






          IN
WITNESS WHEREOF, the Company has caused this Endorsement to be signed and
sealed as of the ____ day of ____________, ______, to be valid when
countersigned by an authorized officer or agent of the Company, all in
accordance with its By-Laws.


	
   

  	
   

	
   

  	
  

  	
   

  
	
  Issued at  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	 


  	
   

  	 

  	
   

  






	
   

  	
   

  	
   

  	
   

  
	
  COUNTERSIGNED:

  	
   

  	
   

  	
  , President

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  
	
   

  	
   

  	
   

  
	 
   	
   

  	 
   	
  , Secretary

  
	
  Authorized Officer or Agent

  	
   

  	
   

  	
   

  





H-3






EXHIBIT
I TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


VARIABLE
FACILITY NOTE


	
  US $

  	
   

  	
   

  	
   

  
	
   

  	 


  	
   

  	 


  



          FOR
VALUE RECEIVED, the undersigned (collectively, the “Borrower”)
promise to pay to the order of Prudential Multifamily Mortgage, Inc., a
Delaware corporation (“Lender”), the principal sum of
______________(US $_________), with interest accruing on each Variable
Facility Advance from the date of disbursement until fully disbursed at an
annual rate as calculated in Section 3 hereof.


          This
Note is executed and delivered by Borrower pursuant to that certain Third
Amended and Restated Master Credit Facility Agreement, dated as of March 30,
2004, by and among Borrower, Lender and Mid-America Apartments of Texas, L.P.,
a Texas limited partnership (as amended from time to time, the “Master
Agreement”), to evidence the obligation of Borrower to repay
Variable Advances made by Lender to Borrower in accordance with the terms of
the Master Agreement.  This Note is
entitled to the benefit and security of the Loan Documents provided for in the
Master Agreement, to which reference is hereby made for a statement of all of
the terms and conditions under which the Variable Advances evidenced hereby is
made.  The Master Agreement requires
certain of the terms of each Variable Advance to be evidenced by an Advance
Confirmation Instrument, and reference is hereby made to each such Advance
Confirmation Instrument for such terms.


          This
Note is issued as part of a Variable Facility established in accordance with
the terms of the Master Agreement.
Subject to the terms, conditions and limitations of Article II of the
Master Agreement, Borrower may re-borrow any amounts under this Note which they
have previously borrowed and repaid under this Note.


          1.        Defined Terms.
As used in this Note, (i) the term “Lender”
means the holder of this Note, (ii) the term “Indebtedness” means the
principal of, interest on, or any other amounts due at any time under, this
Note, the Security Instruments or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances to protect the security
of the Security Instruments under Section 12 of the Security Instruments, and
(iii) a “Business
Day” means any day other than a Saturday, Sunday or any day on which
Lender is not open for business.  Event
of Default and other capitalized terms used but not defined in this Note shall
have the meanings given to such terms in the Master Agreement (or, if not
defined in the Master Agreement, as defined in the Security Instruments (as
defined in Paragraph 5).


          2.        Address for
Payment.  All payments
due under this Note shall be payable at 2200 Ross Avenue, Suite 4900E, Dallas,
Texas 75201, or such other place as may be designated by written notice to
Borrower from or on behalf of Lender.


I-1






          3.        Payment of
Principal and Interest.
Principal and interest shall be paid as follows:


          (a)     This Note shall
evidence Variable Advances made from time to time under the Master
Agreement.  Each Variable Advance shall
bear interest at a rate determined in accordance with Section 4.01 of the
Master Agreement.


          (b)     Borrower shall
pay imputed interest on each Variable Advance in advance in the form of a
Discount in accordance with Section 2.04(a) of the Master Agreement (except
that Borrower shall pay actual interest on the Variable Advance for the partial
month period, if any, described in Section 2.04(b) of the Master Agreement, in
accordance with the terms of such Section).
If not sooner paid, the entire principal amount of each Variable Advance
shall be due and payable on the maturity date of the applicable Variable
Advance (the “Maturity Date”) in accordance with Section 2.03 of the Master
Agreement.  In addition to payment of
principal and the Discount, the Borrower shall pay the Variable Facility Fee
due on each Variable Advance in accordance with Section 2.04(c) of the Master
Agreement.  No Variable Advance may have
a Maturity Date later than, and any then outstanding Variable Advance shall be
due and payable in full on, the related Variable Facility Termination Date.


          4.     Application
of Payments.  If at
any time Lender receives, from Borrower or otherwise, any amount applicable to
the Indebtedness that is less than all amounts due and payable at such time,
Lender may apply that payment to amounts then due and payable in any manner and
in any order determined by Lender, in Lender’s discretion.  Borrower agrees that neither Lender’s
acceptance of a payment from Borrower in an amount that is less than all amounts
then due and payable nor Lender’s application of such payment shall constitute
or be deemed to constitute either a waiver of the unpaid amounts or an accord
and satisfaction.


          5.        Security.  The
Indebtedness is
secured, among other things, by the Security Instruments described in the
Master Agreement and reference is made to the Security Instruments for other
rights of Lender concerning the collateral for the Indebtedness.


          6.        Acceleration.
If an Event of Default has
occurred and is continuing, the entire unpaid principal balance, any accrued
interest, the prepayment premium payable under Paragraph 10, if any, and all
other amounts payable under this Note and any other Loan Document shall at once
become due and payable, at the option of Lender, without any prior notice to
Borrower.  Lender may exercise this
option to accelerate regardless of any prior forbearance.


          7.        Late
Charge.  If any
monthly installment due hereunder is not received by Lender on or before the 10th
day of each month or if any other amount payable under this Note or under the
Security Instruments or any other Loan Document is not received by Lender
within 10 days after the date such amount is due, counting from and including
the date such amount is due, Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to 5 percent of such monthly
installment or other amount due.
Borrower acknowledges that its failure to make timely payments will
cause Lender to incur additional expenses in servicing and processing the loan
evidenced by this Note (the “Loan”), and that it is extremely difficult
and 


I-2










impractical to determine those additional expenses.  Borrower agrees that the late charge payable
pursuant to this Paragraph represents a fair and reasonable estimate, taking
into account all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late payment.  The late charge is payable in addition to,
and not in lieu of, any interest payable at the Default Rate pursuant to
Paragraph 8. 




          8.        Default
Rate.  So long as any
monthly installment or any other payment due under this Note remains past due
for 30 days or more, interest under this Note shall accrue on the unpaid
principal balance from the earlier of the due date of the first unpaid monthly
installment or other payment due, as applicable, at a rate (the “Default Rate”)
equal to the lesser of 4 percentage points above the rate stated in the first paragraph
of this Note or the maximum interest rate which may be collected from Borrower
under applicable law.  If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate.
Borrower also acknowledges that its failure to make timely payments will
cause Lender to incur additional expenses in servicing and processing the Loan,
that, during the time that any monthly installment or payment under this Note
is delinquent for more than 30 days, Lender will incur additional costs and
expenses arising from its loss of the use of the money due and from the adverse
impact on Lender’s ability to meet its other obligations and to take advantage
of other investment opportunities, and that it is extremely difficult and
impractical to determine those additional costs and expenses.  Borrower also acknowledges that, during the
time that any monthly installment or other payment due under this Note is
delinquent for more than 30 days, Lender’s risk of nonpayment of this Note will
be materially increased and Lender is entitled to be compensated for such
increased risk.  Borrower agrees that
the increase in the rate of interest payable under this Note to the Default
Rate represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional costs and
expenses Lender will incur by reason of the Borrower’s delinquent payment and
the additional compensation Lender is entitled to receive for the increased
risks of nonpayment associated with a delinquent loan.


          9.        Limits on
Personal Liability.


          The
provisions of Article 22.01 of the Master Agreement (entitled “Limits on
Personal Liability”) are hereby incorporated into this Note by this
reference to the fullest extent as if the text of such Article were set forth
in its entirety herein.


          10.     Voluntary
and Involuntary Prepayments.


                   Pursuant
to the terms of the Master Agreement, the Borrower shall pay the entire amount
of the Discount on any Variable Advance in advance.  Accordingly, any Variable Advance may be prepaid in whole or in
part and at any time without penalty.
Borrower shall give Lender five Business Days’ advance notice of any
prepayment.


          11.     Costs
and Expenses.  Borrower
shall pay on demand all expenses and costs, including fees and out-of-pocket
expenses of attorneys and expert witnesses and costs of investigation, incurred
by Lender as a result of any default under this Note or in connection with



I-3






efforts to collect any amount due under this Note, or to enforce the provisions
of any of the other Loan Documents, including those incurred in post-judgment
collection efforts and in any bankruptcy proceeding (including any action for
relief from the automatic stay of any bankruptcy proceeding) or judicial or
non-judicial foreclosure proceeding.




          12.     Forbearance.  Any
forbearance by Lender in exercising any
right or remedy under this Note, the Security Instrument, or any other Loan
Document or otherwise afforded by applicable law, shall not be a waiver of or
preclude the exercise of that or any other right or remedy.  The acceptance by Lender of any payment
after the due date of such payment, or in an amount which is less than the
required payment, shall not be a waiver of Lender’s right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment.
Enforcement by Lender of any security for Borrower’s obligations under
this Note shall not constitute an election by Lender of remedies so as to
preclude the exercise of any other right or remedy available to Lender.


          13.     Waivers.  Except
as expressly
provided in the Master Agreement, presentment, demand, notice of dishonor,
protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness are waived by Borrower and all
endorsers and guarantors of this Note and all other third party obligors.


          14.     Loan
Charges.  Borrower
agrees to pay an effective rate of interest equal to the sum of the interest
rate provided for in this Note and any additional rate of interest resulting
from any other charges of interest or in the nature of interest paid or to be
paid in connection with the loan evidenced by this Note and any other fees or
amounts to be paid by Borrower pursuant to any of the other Loan
Documents.  Neither this Note nor any of
the other Loan Documents shall be construed to create a contract for the use,
forbearance or detention of money requiring payment of interest at a rate
greater than the maximum interest rate permitted to be charged under applicable
law.  If any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower in
connection with the Loan is interpreted so that any interest or other charge
provided for in any Loan Document, whether considered separately or together
with other charges provided for in any other Loan Document, violates that law,
and Borrower is entitled to the benefit of that law, that interest or charge is
hereby reduced to the extent necessary to eliminate that violation.  The amounts, if any, previously paid to
Lender in excess of the permitted amounts shall be applied by Lender to reduce
the unpaid principal balance of this Note.
For the purpose of determining whether any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower has
been violated, all Indebtedness that constitutes interest, as well as all other
charges made in connection with the Indebtedness that constitute interest,
shall be deemed to be allocated and spread ratably over the stated term of the
Note.  Unless otherwise required by
applicable law, such allocation and spreading shall be effected in such a
manner that the rate of interest so computed is uniform throughout the stated
term of the Note.


          15.     Commercial
Purpose.  Borrower
represents that the Indebtedness is being incurred by Borrower solely for the
purpose of carrying on a business or commercial enterprise, and not for
personal, family or household purposes.


I-4






          16.     Counting
of Days.  Except where
otherwise specifically provided, any reference in this Note to a period of
“days” means calendar days, not Business Days.


          17.     Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  The provisions of Section 23.06 of the Master
Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury
Trial”) are hereby incorporated into this Note by this reference to the fullest
extent as if the text of such Section were set forth in its entirety herein.


          18.     Captions.  The
captions of the
paragraphs of this Note are for convenience only and shall be disregarded in
construing this Note.


          19.     Notices.  All
notices, demands and other
communications required or permitted to be given by Lender to Borrower pursuant
to this Note shall be given in accordance with Section 23.08 of the Master
Agreement.


          20.     Cross-Default
with Master Agreement.
The occurrence of an Event of Default under the Master Agreement shall
constitute an “Event of Default” under this Note, and, accordingly, upon the
occurrence of an Event of Default under the Master Agreement, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.


          21.     Advance
Confirmation Instruments; Accounting for Variable Advances.  The terms of the Master Agreement and this
Note govern the repayment, and all other terms relating to each Variable
Advance.  However, Borrower shall
execute an Advance Confirmation Instrument to create a physical instrument
evidencing the Variable Advance.  The
Advance Confirmation Instrument for a Variable Advance executed by Borrower in
accordance with Section 4.02 of the Master Agreement shall set forth the
amount, term, Discount, Closing Date and certain other terms of the Variable
Advance.  The Advance Confirmation
Instrument shall conclusively establish each of the terms described in the
preceding sentence, absent manifest error.
The Variable Advance evidenced by the Advance Confirmation Instrument
does not represent a separate indebtedness from that evidenced by this Note.  In making proof of this Note, no other
documents other than this Note shall be required.  In making proof of the amount and terms of the outstanding
Variable Advances under this Note, this Note, the Advance Confirmation
Instruments for the Variable Advances, and Lender’s records concerning payments
made by Borrower under this Note, shall be conclusive evidence of the terms and
outstanding amounts of each Variable Advance, absent manifest error.


          23.     Priority
of Advances.  Each
Variable Advance under this Note shall be evidenced by an Advance Confirmation
Instrument, and the lien of each Security Document executed by Borrower from
time to time to secure this Note, shall secure each separate Advance (and the
lien of each Security Instrument and other Security Document executed by the
Borrower to secure its obligations under the Loan Documents) to the same extent
and with the same effect as if the Advance had been made (and any guaranty
obligation had been incurred) on the date on which (i) with respect to each
other Security Instrument, the Security Instrument is recorded in the land
records of the jurisdiction in which the real property covered by the Security
Instrument 


I-5






is located, or (ii) with respect to each other
Security Document, the date on which the Security Document is executed and
delivered to Lender.


          ATTACHED
SCHEDULES.  The following Schedules are
attached to this Note:


          

o      Schedule
A Prepayment Premium


           o      Schedule
B Modifications to Multifamily Note


I-6






          IN
WITNESS WHEREOF, Borrower has signed and delivered this Note
under seal or has caused this Note to be signed and delivered under seal by its
duly authorized representative.
Borrower intends that this Note shall be deemed to be signed and delivered
as a sealed instrument.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,
 INC.,
  a Tennessee corporation

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS, L.P., 

  a Tennessee limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mid-America Apartment
  Communities, Inc., 

  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
          By:

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive Vice
  President

  



I-7






          Pay
to the order of _________________ without recourse.


	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., 

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  



I-8











EXHIBIT
J TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


TIE-IN
ENDORSEMENT


To be annexed to and form a part of Policy No.
________________.


The said policy is hereby amended in the following
manner:


The Company acknowledges that the land described in
Schedule A of this policy is part of the security for an indebtedness in the
amount of $____________________ which indebtedness is also secured by mortgages
or deeds of trust which are insured concurrently by the following policies:


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
Policy No.  

  	
   

  	
County  

  	
   

  	
State  

  	
   

  	
Amount  

  	
   

  
	
 

  	
 

  	
 

  	
 

  	
 

  	
 

  	
 

  	
 

  







K-1






Anything to the contrary notwithstanding in Paragraph
6(a)(ii) of the Conditions and Stipulations of the Policy, the insurance
coverage afforded in this Policy is aggregated with the insurance coverage in
all of the other policies identified in this endorsement so the effective
insurance coverage is $___________________.
The total liability of the Company under this and all policies
identified in this endorsement shall not exceed such amount, but its liability
in this Policy for the land described in Schedule A remains limited by the
provisions of Paragraph 6(a)(i) and 6(a)(iii) of the Conditions and
Stipulations of this Policy.  Any
payment by the Company on this or any of the Policies listed in this
Endorsement shall reduce pro tanto the liability of the Company under all
policies, and the amount so paid shall be deemed a payment under all policies.


The total liability of the Company under said Policy
and any prior endorsements attached thereto shall not exceed, in the aggregate,
the face amount of said Policy, as the same may be specifically amended in
dollar amount by this or any prior endorsements, and the costs which the
Company is obligated under the provisions of said Policy to pay.


Nothing herein contained shall be construed as
extending or changing the effective date of said commitment or policy unless
otherwise expressly stated.


This endorsement is made a part of said Policy and is
subject to the exclusions, schedules, endorsements, conditions, stipulations
and terms thereof, except as modified by the provisions hereof.


Executed this ____ day of ____________, ______


                        _________________________________


	
   

  	
   

  
	
  COUNTERSIGNED:

  	
  ________________________,
  

  
	
  President

  
	
  ___________________

  	
   

  
	
   

  	
   

  
	
  ______________________________

  	
  Attest:___________________,
  Secretary

  
	
  Authorized Signatory

  	
   

  



K-2






EXHIBIT
K TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT




CONVERSION
REQUEST


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THERE TO
OCCUR AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE
SELECTED BY YOU, AND OCCURRING WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF
THE CONVERSION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE), AS LONG
AS NONE OF THE LIMITATIONS CONTAINED IN SECTION 3.08 OF THE MASTER AGREEMENT IS
VIOLATED, AND ALL CONDITIONS CONTAINED IN SECTION 3.09 OF THE MASTER AGREEMENT
ARE SATISFIED.


____________________, ______


VIA: _______________________


Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas  75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  CONVERSION REQUEST issued pursuant to the Third
  Amended and Restated Master Credit Facility Agreement, dated as of March 30,
  2004, by and among the undersigned (the “Borrower”), Mid-America
  Apartments of Texas, L.P., a Texas limited partnership, and the Lender (as
  amended from time to time, the “Master Agreement”).

  



Ladies and Gentlemen:


This constitutes a Conversion Request pursuant to the
terms of the above-referenced Master Agreement.


          Section
1.          Request.  The Borrower hereby requests that
there
occur a conversion of all or a portion of the Variable Advance to the Fixed
Facility Commitment in accordance with the terms of the Master Agreement.  Following is the information required
by the
Master Agreement with respect to this Request:


	
   

  	
   

  
	
   

  	
            (a)          Designation
  of Amount of Conversion.  The
  amount of the conversion shall be $_________________________.

  
	
   

  	
   

  
	
   

  	
            (b)          Prepayment
  of Variable Advances.  (If
  necessary) The Variable Advances Outstanding which will be prepaid on the
  Closing Date for the conversion are as follows:

  






	
   

  	
   

  
	
  Closing Date of Variable Advance:

  	
  ___________________________________________

  
	
   

  	
   

  
	
  Maturity Date of Variable Advance:  

  	
  ___________________________________________

  



K-3






	
   

  	
   

  
	
  Amount of Advance:

  	
  ________________________________

  






	
   

  	
   

  
	
   

  	
  (Note: Any Fixed Facility Advances made in
  conjunction with a conversion of all or a portion of the Variable Advance to
  the Fixed Facility Commitment must be accompanied by a Future Advance Request
  and shall be reviewed in accordance with the terms of the Master Agreement.)

  
	
   

  	
   

  
	
   

  	
            (c)          Accompanying
  Documents.  All documents,
  instruments and certificates required to be delivered pursuant to the
  conditions contained in Section 3.09 of the Master Agreement, including (i)
  the Conversion Documents, as well as (ii) a Compliance Certificate and (iii) an
  Organizational Certificate will be delivered on or before the Closing Date.

  



          Section
2.          Capitalized
Terms.  All capitalized terms used
but not defined in this Request shall have the meanings ascribed to such terms
in the Master Agreement.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
    MID-AMERICA APARTMENT COMMUNITIES,

    INC., a Tennessee corporation

  
	
   

  	
   

  
	
   

  	
    By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
     Simon R.C. Wadsworth

  
	
   

  	
   

  	
     Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
     MID-AMERICA APARTMENTS, L.P.,

  
	
   

  	
     a Tennessee limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
    By: 

  	
     Mid-America Apartment Communities,
  Inc.,

  
	
   

  	
   

  	
     a Tennessee corporation, its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     By: 

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
     Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
     Executive Vice President

  



K-4






EXHIBIT
L TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT
TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


          THIS
____ AMENDMENT TO THIRD AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT
(the “Amendment”) is made as of the ____ day of _______________, _____,
by and among (i) MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee
corporation (the “REIT”), MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership (“OP”) (collectively, the REIT and OP are referred
to hereafter as the “Borrower”), MID-AMERICA APARTMENTS OF TEXAS, L.P.,
a Texas limited partnership (“MAC of Texas” or the “Guarantor”;
the Borrower and the Guarantor being collectively referred to herein as the “Borrower
Parties”); and (ii) PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware
corporation (“Lender”).


RECITALS


          A.          The
Borrower Parties and the Lender are parties to that certain Third Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 (as
amended from time to time, the “Master Agreement”).


          B.          All
of the Lender’s right, title and interest in the Master Agreement and the Loan
Documents executed in connection with the Master Agreement or the transactions
contemplated by the Master Agreement have been assigned to Fannie Mae pursuant
to that certain Assignment of Collateral Agreements and Other Loan Documents,
dated as of August 22, 2002, that certain Assignment of Collateral Agreements
and Other Loan Documents, dated as of December 10, 2003, and that Assignment of
Collateral Agreements and Other Loan Documents dated as of March 31, 2004
(collectively, the “Assignment”).
Fannie Mae has not assumed any of the obligations of the Lender under
the Master Agreement or the Loan Documents as a result of the Assignment.  Fannie Mae has designated the Lender
as the
servicer of the Advances contemplated by the Master Agreement.


          C.          The
parties are executing this Amendment pursuant to the Master Agreement to
reflect a conversion of all or a portion of a Variable Advance to the Fixed
Facility Commitment.


          NOW,
THEREFORE, the parties hereto, in consideration of the mutual promises and
agreements contained in this Amendment and the Master Agreement, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agree as follows:


          Section
1.          Conversion.  The Variable Advance shall
be reduced by,
and the Fixed Facility Commitment shall be increased by, $____________________,
and the definitions of “Variable Facility Commitment” and “Fixed Facility
Commitment” are hereby replaced in their entirety by the following new
definitions:


L-1






	
   

  	
   

  
	
   

  	
            “Fixed
  Facility Commitment” means $________________, plus such amount as the
  Borrower may elect to add to the Fixed Facility Commitment in accordance with
  Articles III or VIII.

  
	
   

  	
   

  
	
   

  	
            “Variable
  Facility Commitment” means an aggregate amount of $_______________, which
  shall be evidenced by the Variable Facility Note in the form attached hereto
  as Exhibit I, plus such amount as the Borrower may elect to add to the
  Variable Facility Commitment in accordance with Article VIII, and plus such
  amount as the Borrower may elect to reborrow in accordance with Section 2.08,
  less such amount as the Borrower may elect to convert from the Variable
  Facility Commitment to the Fixed Facility Commitment in accordance with
  Article III and less such amount by which the Borrower may elect to reduce
  the Variable Facility Commitment in accordance with Article IX.

  



          Section
2.          Capitalized
Terms.  All capitalized terms used
in this Amendment which are not specifically defined herein shall have the
respective meanings set forth in the Master Agreement.


          Section
3.          Full Force and
Effect.  Except as expressly
modified by this Amendment, all terms and conditions of the Master Agreement
shall continue in full force and effect.


          Section
4.          Counterparts.  This Amendment may be
executed in
counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.


[The rest of this page has been
intentionally left blank.]


L-2






          IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as an
instrument under seal as of the day and year first above written.


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  
	
   

  	
  INC., a Tennessee corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
     Simon R.C. Wadsworth

  
	
   

  	
   

  	
     Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS, L.P.,

  
	
   

  	
  a Tennessee limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     Mid-America Apartment Communities,
  Inc.,

  
	
   

  	
   

  	
     a Tennessee corporation, its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
     By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
      Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
      Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
  a Texas limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     MAC of Delaware, Inc., a Delaware
  corporation,

  
	
   

  	
   

  	
     its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
     Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
     Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  



L-3






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware
  corporation 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  



L-4






EXHIBIT
M TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


RATE
SETTING FORM


          Pursuant
to Section 4.01(b) of that certain Third Amended and Restated Master Credit Facility
Agreement, dated as of March 30, 2004 (as amended from time to time, the “Master
Agreement”) by and among Prudential Multifamily Mortgage, Inc., a Delaware
corporation (the “Lender”), the undersigned (the “Borrower”), and
Mid-America Apartments of Texas, L.P., a Texas limited partnership, the
Borrower hereby requests that the Lender issue to it an advance [for the
purposes of refinancing the existing Indebtedness under the Note (applies to
Variable Advance only)] with the following terms:


	
   

  	
   

  	
   

  
	
   

  	
  Designation of Advance

  	
  _____ Fixed Facility Advance

  
	
   

  	
  (Check One)

  	
  _____ Variable Advance

  



          FOR
VARIABLE ADVANCE ONLY:


	
   

  	
   

  	
   

  
	
   

  	
  Proposed MBS Imputed Interest Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Advance Amount

  	
  $______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Term

  	
  _______ months

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Issue Date

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  Variable Advance Fee

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Maximum Annual Coupon Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Discount

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Price

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Closing Date no later than

  	
  _______________, _______

  



M-1






          FOR
FIXED FACILITY ADVANCE ONLY:


	
   

  	
   

  	
   

  
	
   

  	
  Proposed Pass-Through Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Advance Amount

  	
  $______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Term

  	
  _______ months

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Issue Date

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  Fixed Facility Fee

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Maximum Annual Coupon Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Amortization Period

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Closing Date no later than

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  30/360 or Actual/360

  	
  _______________________

  



          The
Lender will provide the Borrower with written confirmation when and if it has
obtained a commitment for the purchase of a Fannie Mae MBS having the
characteristics described above at a price between 99-1⁄2  and 100-1⁄2
or better.  In the event that the
lowest available Coupon Rate is greater than that specified above, the Lender
will not proceed without the prior written authorization of the Borrower.


          The
Borrower certifies that all conditions contained in Article V of the Master
Agreement  that are required to be
satisfied will be satisfied on or before the Closing Date.


          Defined
terms used herein shall have the same meaning as set forth in the Master
Agreement.


[Signatures
on the following page]


M-2






Dated: ____________________, ____


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  
	
   

  	
  INC., a Tennessee corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
     Simon R.C. Wadsworth

  
	
   

  	
   

  	
     Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS, L.P.,

  
	
   

  	
  a Tennessee limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     Mid-America Apartment Communities,
  Inc.,

  
	
   

  	
   

  	
     a Tennessee corporation, its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
     By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
      Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
      Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  



M-3






EXHIBIT
N TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


RATE
CONFIRMATION FORM


          Pursuant
to Section 4.01(c) of that certain Third Amended and Restated Master Credit
Facility Agreement, dated as of March 30, 2004 (as amended from time to time,
the “Master Agreement”) by and among (a) Prudential Multifamily
Mortgage, Inc., a Delaware corporation (the “Lender”), (b) Mid-America
Apartment Communities, Inc., a Tennessee corporation (the “REIT”), (c)
Mid-America Apartments, L.P., a Tennessee limited partnership (“OP”;
REIT and OP, collectively, the “Borrower”), and (d) Mid-America
Apartments of Texas, L.P., a Texas limited partnership; and the Rate Setting
Form dated
                              
, from the Borrower to the Lender, the Lender hereby confirms that it has
obtained a commitment [for the purchase of a Fannie Mae MBS] / [for the
purposes of refinancing the existing Indebtedness under the Note (applies to
Variable Advance only)] with the following terms:


	
   

  	
   

  	
   

  
	
   

  	
  Designation of Advance

  	
  _____ Fixed Facility Advance

  
	
   

  	
  (Check One)

  	
  _____ Variable Advance

  



          FOR
VARIABLE ADVANCE ONLY:


	
   

  	
   

  	
   

  
	
   

  	
  Advance Amount

  	
  $______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Term

  	
  _______ months

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Issue Date

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Imputed Interest Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Variable Advance Fee

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Maximum Annual Coupon Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Discount

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Price

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Closing Date no later than

  	
  _______________, _______

  



N-1






          FOR
FIXED FACILITY ADVANCE ONLY:


	
   

  	
   

  	
   

  
	
   

  	
  Advance Amount

  	
  $______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Term

  	
  _______ months

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Issue Date

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  MBS Pass-Through Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Fixed Facility Fee

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Maximum Annual Coupon Rate

  	
  ________%

  
	
   

  	
   

  	
   

  
	
   

  	
  Price

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Yield Maintenance Period

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Yield Rate Security

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Amortization Period

  	
  _______________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Closing Date no later than

  	
  _______________, _______

  
	
   

  	
   

  	
   

  
	
   

  	
  30/360 or Actual/360

  	
  _______________________

  



Dated: ____________________, ______


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE,
INC., a Delaware
  corporation 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	 


  



Rate Setting Date:
      ____________________,
______,        ___:___ AM/PM
Eastern Time


N-2












EXHIBIT
O TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


ADVANCE
CONFIRMATION INSTRUMENT


THIS ADVANCE CONFIRMATION INSTRUMENT (the “Advance
Confirmation Instrument”) is made as of the ____ day of
_______________, _____, by (a) Mid-America Apartment Communities, Inc., a
Tennessee corporation (the “REIT”), (b) Mid-America Apartments,
L.P., a Tennessee limited partnership (“OP”; the REIT and OP, collectively, the
“Borrower”)for
the benefit of Prudential Multifamily Mortgage, Inc., a Delaware corporation
(the “Lender”).


RECITALS


          A.          
The Borrower, Mid-America Apartments of Texas, L.P., a Texas limited partnership,
 and the Lender are parties to that certain Third Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 (as
amended from time to time, the “Master Agreement”).


          B.  
        
All of the Lender’s right, title and interest in the Master Agreement and the
Loan Documents executed in connection with the Master Agreement or the
transactions contemplated by the Master Agreement have been assigned to Fannie
Mae pursuant to that certain Assignment of Collateral Agreements and Other Loan
Documents, dated as of August 22, 2002, that  certain  Assignment of
Collateral Agreements and Other Loan Documents, dated as of December 10, 2003,
and that Assignment of Collateral Agreements and Other Loan Documents
dated as of March 31, 2004 (collectively, the “Assignment”). Fannie Mae has not assumed any of the
obligations of the Lender under the Master Agreement or the Loan Documents as a
result of the Assignment. Fannie Mae has designated the Lender as the servicer
of the Advances contemplated by the Master Agreement.


          C.          
In accordance with this Advance Confirmation Instrument and the Master
Agreement, the Lender is making a Variable Advance to the Borrower.


          D.          
The Borrower is executing this Advance Confirmation Instrument pursuant to the
Master Agreement to confirm certain terms of the Master Agreement and that
certain _____________ Amended and Restated Renewal Variable Facility Note dated as of
__________________ in the original principal amount of $____________ (as
amended from time to time, the “Variable Advance Note”) relating to the
Variable Advance, and the Borrower’s obligation to repay the Advance in
accordance with the terms of the Variable Advance Note and this Advance
Confirmation Instrument.


          NOW,
THEREFORE, the Borrower, in consideration of the Lender’s making of the
Variable Advance, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, hereby agree as follows:


          Section
1.          Confirmation of Advance and Terms of Advance. The
Borrower hereby confirms the following terms of the Variable Advance, and
confirms and agrees that it 


O-1






shall repay the Advance to the Lender in accordance
with the terms of the Variable Advance Note and the Master Agreement:


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Advance Amount

  	
   

  	
  $_______________________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Term

  	
   

  	
  _______ months

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MBS Issue Date

  	
   

  	
  _________________, ______

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MBS Imputed Interest Rate

  	
   

  	
  _______%

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Variable Advance Fee

  	
   

  	
  $_______________________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Coupon Rate

  	
   

  	
  _______%

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Discount

  	
   

  	
  _______%

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Price

  	
   

  	
  ________________________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Closing Date

  	
   

  	
  _______________, ________

  



          Section
2.          Beneficiaries. This Advance Confirmation Instrument
is made for the express benefit of the Lender.


          Section
3.          Purpose. The terms of the Master Agreement and the
Variable Advance Note govern the repayment, and all other terms relating to the
Variable Advance. However, this Advance Confirmation Instrument has been
executed to create a physical instrument evidencing the above-described Advance
under the Variable Advance Note. The Variable Advance evidenced by this Advance
Confirmation Instrument does not represent a separate indebtedness from that
evidenced by the Variable Advance Note.


          Section
4.          Effectiveness of Advance Confirmation Instrument. 
This Advance Confirmation Instrument will not be effective until the Lender
funds the Variable Advance, at which time the Lender shall note the date of
such funding by completing the date block at the foot of this Advance
Confirmation Instrument, and executing this Advance Confirmation Instrument
below such date block, and such completion shall be binding on the Borrower,
absent manifest error.


          Section
5.          Capitalized Terms. All capitalized terms used in
this Advance Confirmation Instrument which are not specifically defined herein
shall have the respective meanings set forth in the Master Agreement.


          Section
6.          Counterparts. This Advance Confirmation Instrument
may be executed in counterparts by the parties hereto, and each such
counterpart shall be considered an original and all such counterparts shall
constitute one and the same instrument.


O-2






          IN
WITNESS WHEREOF, the Borrower has executed this Advance Confirmation Instrument
as an instrument under seal as of the day and year first above written.


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES,

  
	
   

  	
   

  	
  INC., a
  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  _____________________________________

  
	
   

  	
   

  	
   

  	
  Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  
	
   

  	
   

  	
  a Tennessee
  limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
   

  	
  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  _________________________________

  
	
   

  	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  	
   

  	
   

  



O-3







	
   

  	
   

  
	
    Date
  of Funding:

  	
  ____________________,_____________

  	
   

  






	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a 

  
	
   

  	
   

  	
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:________________________________________________

  
	
   

  	
   

  	
  Name:_____________________________________________________

  
	
   

  	
   

  	
  Title:_______________________________________________

  



O-4









EXHIBIT
P TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


FUTURE
ADVANCE REQUEST


THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO
MAKE THE REQUESTED FUTURE ADVANCE, IF ALL CONDITIONS CONTAINED IN SECTION 5.03
OF THE MASTER AGREEMENT ARE SATISFIED, AT A CLOSING TO BE HELD AT OFFICES
DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING ON A DATE
SELECTED BY US, WHICH DATE SHALL BE NOT MORE THAN THREE (3) BUSINESS DAYS AFTER
YOUR RECEIPT OF THE FUTURE ADVANCE REQUEST AND THE OUR RECEIPT OF THE RATE
CONFIRMATION FORM (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE). THE
LENDER  RESERVES THE RIGHT TO REQUIRE
THAT WE POST A DEPOSIT AT THE TIME THE MBS COMMITMENT IS OBTAINED AS AN
ADDITIONAL CONDITION TO YOUR OBLIGATION TO MAKE THE FUTURE ADVANCE.


____________________, ________


	
   

  	
   

  
	
  VIA:

  
	
   

  	 

  




Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas  75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  FUTURE ADVANCE REQUEST issued pursuant to the Third
  Amended and Restated Master Credit Facility Agreement, dated as of March 30,
  2004, by and among the undersigned (the “Borrower”),
  Mid-America Apartments of Texas, L.P., a Texas limited partnership, and the
  Lender (as amended from time to time, the “Master Agreement”)

  



Ladies and Gentlemen:


This constitutes a Future Advance Request pursuant to
the terms of the above-referenced Master Agreement.


          Section
1.          Request.  The
Borrower hereby requests that the Lender make an Advance in accordance
with the terms of the Master Agreement.
Following is the information required by the Master Agreement with
respect to this Request:


	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Amount.  The amount of the Future Advance shall be $_______________.

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Designation of Facility.  The Future Advance is a: [Check one]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  _____ Fixed Facility Advance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  _____ Variable Advance

  



P-1






	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Maturity Date.  The Maturity Date of the Future Advance is
  as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  _________________, ______.

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Amortization Period.  [For Fixed Facility Advance only]  The principal of this Fixed Facility
  Advance shall be amortized over a period of 30 years.

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Accompanying Documents.  All documents, instruments and
  certificates required to be delivered pursuant to the conditions contained in
  Section 5.03 of the Master Agreement, including (i)  a Rate Setting Form, (ii) an Advance Confirmation Instrument
  (for Variable Advances only), (iii) a Fixed Facility Note (for Fixed Facility
  Advances only) as well as (iv) a Compliance Certificate, and (v) an
  Organizational Certificate, will be delivered on or before the Closing Date.

  



          Section
2.          Available
Commitment.  The
information contained in the following table is true, correct and complete, to
the undersigned’s knowledge.  The
undersigned acknowledges and agrees that the final determination of the
information shall be made by the Lender, in accordance with the terms of the
Master Agreement.


	
   

  	
   

  
	
  Currently Available Fixed Facility Credit Commitment



  	
   

  
	
  Currently Available Variable Advance Credit Commitment



  	
   

  
	
  Proposed Amount Drawn on Fixed Facility Credit Commitment



  	
   

  
	
  Remaining Fixed Facility Credit Commitment after Proposed Draw



  	
   

  
	
  Proposed Amount Drawn on Variable Advance Credit Commitment



  	
   

  
	
  Remaining Variable Advance Credit Commitment after the Proposed Draw



  	
   

  



          For
these purposes, the terms


	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  “Available Fixed Facility Credit Commitment”
  means, at any time, the maximum amount of Fixed Facility Advances which could
  be issued and outstanding without causing: (i) the Aggregate Debt Service
  Coverage Ratio for the Trailing 12 Month Period to be less than 1.40:1.0;
  (ii) the Aggregate Loan to Value Ratio for the Trailing 12 Month Period to be
  greater than 65%; or (iii) a breach of any of the Financial Covenants set
  forth in Article XV of the Master Agreement; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  “Available Variable Advance Credit Commitment”
  means, at any time, the maximum amount of Variable Advances which could be
  issued and outstanding without causing: (i) the Aggregate Debt Service
  Coverage Ratio for the Trailing 12 Month Period to be less than 1.40:1.0;
  (ii) the Aggregate Loan to Value Ratio 

  



P-2






	
   

  	
   

  	
   

  
	
   

  	
   

  	
  for the Trailing 12 Month Period to be greater than
  65% or (iii) a breach of any of the Financial Covenants set forth in Article
  XV of the Master Agreement.

  



          Section
3.          Capitalized
Terms.  All
capitalized terms used but not defined in this Request shall have the meanings
ascribed to such terms in the Master Agreement.


                                                       Sincerely,


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  	
   

  
	
   

  	
  INC., a Tennessee corporation

  	
   

  
	
   

  	
  
By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
       Executive Vice
  President

  	
   

  
	
   

  	
  
MID-AMERICA APARTMENTS, L.P.,

  	
   

  
	
   

  	
  a Tennessee limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       Mid-America Apartment
  Communities, Inc., 

  	
   

  
	
   

  	
   

  	
       a Tennessee
  corporation, its general partner

  	
   

  






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
   

  	
       Executive Vice
  President

  	
   

  



P-3






EXHIBIT
Q TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


REBORROWING
REQUEST 


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THERE TO
OCCUR AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON THE MATURITY DATE
OF THE FIXED FACILITY ADVANCE TO WHICH THIS REQUEST RELATES (OR ON SUCH OTHER
DATE TO WHICH WE MAY AGREE), AS LONG AS NONE OF THE LIMITATIONS CONTAINED IN
SECTION 2.09 OF THE MASTER AGREEMENT IS VIOLATED, AND ALL CONDITIONS CONTAINED
IN SECTION 2.10 OF THE MASTER AGREEMENT ARE SATISFIED.


____________________, ________


	
   

  	
   

  
	
  VIA:

  
	
   

  	 

  




Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue

Suite 4900 E

Dallas, Texas  75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  REBORROWING REQUEST issued pursuant to the Third
Amended and Restated Master Credit Facility Agreement, dated as of March 30,
2004, by and among the undersigned (the “Borrower”)
and the Lender (as amended from time to time, the “Master Agreement”). 

  



Ladies and Gentlemen:


This constitutes a Reborrowing Request pursuant to the
terms of the above-referenced Master Agreement.


          Section
1.          Request.  The Borrower hereby requests that there
occur a reborrowing of all or a portion of a maturing Fixed Facility Advance as
a Variable Advance in accordance with the terms of the Master Agreement.  Following is the information required by the
Master Agreement with respect to this Request:


	
   

  	
   

  	
   

  
	
   

  	
                  (a)          Designation of Amount of Reborrowing.  The amount of the reborrowing shall be
  $_________________________.

  
	
   

  	
   

  	
   

  
	
   

  	
                  (b)         Repayment of Fixed Facility Advances.  The Fixed Facility Advance Outstanding
  which will be repaid on the Closing Date for the reborrowing is as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
  Closing Date of Fixed Facility Advance:   ____________________________________

  




Q-1






	
   

  	
   

  
	
   

  	
  Maturity Date of Fixed Facility
  Advance:     ________________________________

  
	
   

  	
   

  
	
   

  	
  Amount of
  Advance:     ________________________________

  
	
   

  	
   

  
	
   

  	
  (Note: Any Variable Facility Advances made in
  conjunction with a reborrowing of all or a portion of a maturing Fixed
  Facility Advance must be accompanied by a Future Advance Request and shall be
  reviewed in accordance with the terms of the Master Agreement.)

  
	
   

  	
   

  
	
   

  	
            (c)          Accompanying
  Documents.  All documents,
  instruments and certificates required to be delivered pursuant to the
  conditions contained in Section 2.10 of the Master Agreement, including (i)
  the Reborrowing Documents, as well as (ii) a Compliance Certificate and (iii)
  an Organizational Certificate will be delivered on or before the Closing
  Date.

  
	
   

  	
   

  



          Section
2.          Capitalized
Terms.  All
capitalized terms used but not defined in this Request shall have the meanings
ascribed to such terms in the Master Agreement.


                                                    Sincerely,


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  	
   

  
	
   

  	
  INC., a Tennessee corporation

  	
   

  
	
   

  	
  
By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
       Executive Vice
  President

  	
   

  
	
   

  	
  
MID-AMERICA APARTMENTS, L.P.,

  	
   

  
	
   

  	
  a Tennessee limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       Mid-America Apartment
  Communities, Inc., 

  	
   

  
	
   

  	
   

  	
       a Tennessee
  corporation, its general partner

  	
   

  






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
   

  	
       Executive Vice
  President

  	
   

  



Q-2






Q-3






EXHIBIT
R TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT
TO MASTER CREDIT FACILITY AGREEMENT


          THIS
____ AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the ____ day
of _______________, _____, by and among (i) (a) MID-AMERICA APARTMENT
COMMUNITIES, INC., a Tennessee corporation (the “REIT”), (b) MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership (“OP”)
(the REIT and OP being collectively referred to as “Borrower”); (ii) MID-AMERICA APARTMENTS
OF TEXAS, L.P., a Texas limited partnership (“MAA of Texas”; MAA of Texas and Borrower being
collectively referred to as  “Borrower Parties”); and (iii)
PRUDENTIAL MULTIFAMILY MORTGAGE INC., formerly known as WMF Washington Mortgage
Corp., a Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower Parties and the Lender are parties to that certain Third Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 (as
amended from time to time, the “Master Agreement”).



          B.          All
of the Lender’s right, title and interest in the Master Agreement and the Loan
Documents executed in connection with the Master Agreement or the transactions
contemplated by the Master Agreement have been assigned to Fannie Mae pursuant
to that certain Assignment of Collateral Agreements and Other Loan Documents,
dated as of August 22, 2002, that certain Assignment of Collateral Agreements
and Other Loan Documents, dated as of December 10, 2003, and that Assignment of
Collateral Agreements and Other Loan Documents dated as of March 31, 2004
(collectively, the “Assignment”).
Fannie Mae has not assumed any of the obligations of the Lender under
the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the
servicer of the Advances contemplated by the Master Agreement. 


          C.          The
parties are executing this Amendment pursuant to the Master Agreement to
reflect a conversion of all or a portion of a Fixed Facility Advance to a
Variable Advance.


          NOW,
THEREFORE, the parties hereto, in consideration of the mutual promises and
agreements contained in this Amendment and the Master Agreement, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agree as follows:


          Section
1.          Reborrowing.
The Variable Facility Commitment shall be increased by $____________________,
and the definition of “Variable Facility Commitment” is hereby replaced in its
entirety by the following new definition:


R-1






          “Variable
Facility Commitment” means an aggregate amount of $_______________, which
shall be evidenced by the Variable Facility Note in the form attached hereto as
Exhibit I, plus such amount as the Borrower may elect to add to the
Variable Facility Commitment in accordance with Article VIII, and plus such
amount as the Borrower may elect to reborrow in accordance with Section 2.08,
less such amount as the Borrower may elect to convert from the Variable
Facility Commitment to the Fixed Facility Commitment in accordance with Article
III and less such amount by which the Borrower may elect to reduce the Variable
Facility Commitment in accordance with Article IX.


          Section
2.          Capitalized
Terms.  All capitalized
terms used in this Amendment which are not specifically defined herein shall
have the respective meanings set forth in the Master Agreement.


          Section
3.          Full Force and
Effect. Except as expressly modified by this Amendment,
all terms and conditions of the Master Agreement shall continue in full force
and effect.


          Section
4.          Counterparts.
This Amendment may be executed in counterparts by the parties hereto, and each
such counterpart shall be considered an original and all such counterparts
shall constitute one and the same instrument.


[The rest of this page has been
intentionally left blank.]


R-2






          IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as an
instrument under seal as of the day and year first above written.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  	
   

  
	
   

  	
  INC., a Tennessee corporation

  	
   

  
	
   

  	
  
By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
       Executive Vice
  President

  	
   

  
	
   

  	
  
MID-AMERICA APARTMENTS, L.P.,

  	
   

  
	
   

  	
  a Tennessee limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       Mid-America Apartment
  Communities, Inc., 

  	
   

  
	
   

  	
   

  	
       a Tennessee
  corporation, its general partner

  	
   

  






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
   

  	
       Executive Vice
  President

  	
   

  



[Signatures follow on next page]


R-3






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GUARANTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
  a Texas limited partnership



  	
   

  
	
   

  	
  By:

  	
       MAC of Delaware, Inc.,
  a Delaware corporation,

       its general partner

  





	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  





	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  





	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  



[Signatures follow on next page]


R-4






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE INC., a 

  Delaware corporation

  





	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  
By: 

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
      Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  




	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    Title:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  



[Signatures follow on next page]


R-5






EXHIBIT
S TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL
ADDITION REQUEST


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THAT IF
(1) YOU CONSENT TO THE ADDITION OF THE PROPOSED ADDITIONAL MORTGAGED PROPERTY
TO THE COLLATERAL POOL, (2) WE ELECT TO CAUSE THE PROPOSED ADDITIONAL MORTGAGED
PROPERTY TO BE ADDED TO THE COLLATERAL POOL AND (3) ALL CONDITIONS CONTAINED IN
SECTION 6.03 OF THE MASTER AGREEMENT ARE SATISFIED, THEN YOU SHALL PERMIT THE
PROPOSED ADDITIONAL MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL POOL, AT A
CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY
YOU, AND OCCURRING WITHIN THIRTY (30) BUSINESS DAYS AFTER YOUR RECEIPT OF OUR
ELECTION (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE).


________, 20__


Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue

Suite 4900E

Dallas, Texas  75201


	
   

  	
   

  
	
  Re:

  	
  COLLATERAL ADDITION REQUEST issued pursuant to the
  Third Amended and Restated Master Credit Facility Agreement, dated as of
  March 30, 2004, by and among the undersigned (the “Borrower”), Guarantor and Lender (as
  amended from time to time, the “Master
  Agreement”)

  



Ladies and Gentlemen:


This constitutes a Collateral Addition Request
pursuant to the terms of the above-referenced Master Agreement.


          Section
1.          Request.  The
Borrower hereby requests that the Multifamily Residential Properties
described in this Request be added to the Collateral Pool in accordance with
the terms of the Master Agreement.
Following is the information required by the Master Agreement with
respect to this Request:


	
   

  	
   

  
	
   

  	
            (a)          Collateral
  Addition Description Package.
  Attached to this Request is the Collateral Addition Description
  Package and attached thereto are all information and documents relating to
  the Additional Collateral required by the Collateral Addition Description
  Package;

  



S-1






	
   

  	
   

  
	
   

  	
            (b)          Due
  Diligence Fees.  Enclosed with
  this Request is a check in payment of all Additional Collateral Due Diligence
  Fees required to be submitted with this Request pursuant to Section 16.03(b)
  of the Master Agreement; and

  
	
   

  	
   

  
	
   

  	
            (c)          Accompanying
  Documents.  All reports,
  certificates and documents required to be delivered pursuant to the
  conditions contained in Section 6.03 of the Master Agreement will be
  delivered on or before the Closing Date.

  



          Section
2.          Collateral
Addition Fee.  If
the Lender consents to the addition of the Additional Collateral to the
Collateral Pool, and the Borrower Parties elect to add the Additional
Collateral to the Collateral Pool, Mid-America Apartment Communities, Inc., a
Tennessee corporation, and Mid-America Apartments, L.P., a Tennessee limited
partnership, shall pay the Collateral Addition Fee for the Additional
Collateral to the Lender as one of the conditions to the closing of the
addition of the Additional Collateral to the Collateral Pool.


          Section
3.          Capitalized
Terms.  All
capitalized terms used but not defined in this Request shall have the meanings
ascribed to such terms in the Master Agreement.


Sincerely,


MID-AMERICA APARTMENT COMMUNITIES,

INC., a Tennessee corporation


	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	 


  	
   

  
	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
       Executive Vice
  President

  	
   

  



MID-AMERICA APARTMENTS, L.P.,
a Tennessee limited partnership


	
   

  	
   

  	
   

  
	
  By:

  	
  Mid-America Apartment Communities, Inc., 

  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
       Executive Vice
  President

  	
   

  



S-2






EXHIBIT
T TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL
RELEASE REQUEST 


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES FOR THERE
TO OCCUR AT A CLOSING WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS
REQUEST, SUBJECT TO SATISFACTION OF ALL CONDITIONS CONTAINED IN SECTION 7.03 OF
THE MASTER AGREEMENT.  REFERENCE IS MADE
TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT
TO THIS REQUEST.


____________________, ______


VIA: _______________________


Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Vienna, Virginia 22812


[Note: Subject to change in the event Lender or its
address changes]


	
   

  	
   

  
	
  Re:

  	
  COLLATERAL RELEASE REQUEST  issued pursuant to the Third Amended and Restated Master Credit
  Facility Agreement, dated as of March 30, 2004, by and among the undersigned
  (the “Borrower”) and
  others (as amended from time to time, the “Master Agreement”)

  



Ladies and Gentlemen:


This constitutes a Collateral Release Request pursuant
to the terms of the above-referenced Master Agreement.


          Section
1.          Request.  The
Borrower hereby requests that the Collateral Release Property described
in this Request be released from the Collateral Pool in accordance with the
terms of the Master Agreement.
Following is the information required by the Master Agreement with
respect to this Request:


	
   

  	
   

  
	
   

  	
            (a)          Description
  of Collateral Release Property. The name, address and location (county
  and state) of the Mortgaged Property, or other designation of the Collateral,
  to be released from the Collateral Pool is as follows:

  






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:  

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  



T-1






	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
  
Location:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  






	
   

  	
   

  
	
   

  	
            (b)          Accompanying
  Documents.  All documents,
  instruments and certificates required to be delivered pursuant to the
  conditions contained in Section 7.03 of the Master Agreement will be
  delivered on or before the Closing Date.

  



          Section
2.          Release Price
and Release Fee. The Borrower shall pay the Release Price
and the Release Fee as two of the conditions to the closing of the release of
the Collateral Release Property from the Collateral Pool.


          Section
3.         Capitalized
Terms.  All
capitalized terms used but not defined in this Request shall have the meanings
ascribed to such terms in the Master Agreement.


	
   

  	
   

  	
   

  	
   

  
	
                                                     Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  	
   

  
	
   

  	
  INC., a Tennessee corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
       Executive Vice
  President

  	
   

  
	
   

  	
  
MID-AMERICA APARTMENTS, L.P.,

  	
   

  
	
   

  	
  a Tennessee limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       Mid-America Apartment
  Communities, Inc., 

  	
   

  
	
   

  	
   

  	
       a Tennessee
  corporation, its general partner

  	
   

  






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
       Simon R.C. Wadsworth

  	
   

  
	
   

  	
   

  	
   

  	
       Executive Vice
  President

  	
   

  



T-2








EXHIBIT
U TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


CONFIRMATION
OF OBLIGATIONS 


          THIS
CONFIRMATION OF OBLIGATIONS (the “Confirmation
of Obligations”) is made as of the ____ day of __________, ____,
by and among (a) MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee
corporation, (the “REIT”),
(b) MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership (“OP”; the REIT and OP being
collectively referred to as the “Borrower”), (c) MID-AMERICA APARTMENTS
OF TEXAS, L.P., a Texas limited partnership (“MAC of Texas” or the “Guarantor”;
Borrower and the Guarantor being collectively referred to as the “Borrower Parties”) for the benefit of
Prudential Multifamily Mortgage, Inc., a Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower Parties and the Lender are parties to that certain Third Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 (as
amended from time to time, the “Master
Agreement”).


          B.          All
of the Lender’s right, title and interest in the Master Agreement and the Loan
Documents executed in connection with the Master Agreement or the transactions
contemplated by the Master Agreement have been assigned to Fannie Mae pursuant
to that certain Assignment of Collateral Agreements and Other Loan Documents,
dated as of August 22, 2002, that certain Assignment of Collateral Agreements
and Other Loan Documents, dated as of December 10, 2003, and that Assignment of
Collateral Agreements and Other Loan Documents dated as of March 31, 2004
(collectively, the “Assignment”).  Fannie Mae has not assumed any of the
obligations of the Lender under the Master Agreement or the Loan Documents as a
result of the Assignment.  Fannie Mae
has designated the Lender as the servicer of the Advances contemplated by the
Master Agreement.


          C.          The
Borrower has delivered to the Lender a Collateral Release Request pursuant to
the Master Agreement to release a Collateral Release Property from the
Collateral Pool.


          D.          The
Lender has consented to the Collateral Release Request.


          E.          The
parties are executing this Confirmation of Obligations pursuant to the Master
Agreement to confirm that each remains liable for all of its obligations under
the Master Agreement and the other Loan Documents notwithstanding the release
of the Collateral Release Property from the Collateral Pool.


          NOW,
THEREFORE, the Borrower Parties, in consideration of the Lender’s consent to
the release of the Collateral Release Property from the Collateral Pool and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, hereby agree as follows:


U-1






          Section
1.          Confirmation of Obligations. The Borrower Parties
confirm that none of
their respective obligations under the Master Agreement and the Loan Documents
is affected by the release of the Collateral Release Property from the
Collateral, and each of their respective obligations under the Master Agreement
and the Loan Documents shall remain in full force and effect, and each shall be
fully liable for the observance of all such obligations, notwithstanding the
release of the Collateral Release Property from the Collateral Pool. The Borrower Parties confirm that, except
with respect to the Collateral Release Property, none of their respective
obligations under the Master Agreement and the Loan Documents are affected by
the release of the Collateral Release Property, and their obligations under the
Master Agreement and the Loan Documents shall remain in full force and effect,
and they shall be fully liable for the observance of all such obligations,
notwithstanding the release of the Collateral Release Property from the
Collateral Pool. 


          Section
2.          Beneficiaries. This Confirmation of Obligations is made
for
the express benefit of both the Lender and Fannie Mae. 


          Section
3.          Capitalized Terms. All capitalized terms used in this
Confirmation of Obligations which are not specifically defined herein shall
have the respective meanings set forth in the Master Agreement. 


          Section
4.          Counterparts. This Confirmation of Obligations may be
executed in counterparts
by the parties hereto, and each such counterpart shall be considered an
original and all such counterparts shall constitute one and the same
instrument. 


          IN
WITNESS WHEREOF, the parties hereto have executed this Confirmation of
Obligations as an instrument under seal as of the day and year first above
written.


[Signatures on the
following pages]


U-2






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENT COMMUNITIES,

  
	
   

  	
  INC., a Tennessee corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
            Simon
  R.C. Wadsworth

  
	
   

  	
   

  	
            Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS, L.P.,

  
	
   

  	
  a Tennessee limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
   

  
	
   

  	
   

  	
   

  	 
  	
   

  
	
   

  	
   

  	
   

  	
            Simon
  R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
            Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
  a Texas limited partnership

  






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
  MAC of Delaware, Inc., a Delaware corporation,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
   

  



U-3






	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a 

  
	
   

  	
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	 


  



U-4






EXHIBIT
V TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


CREDIT
FACILITY EXPANSION REQUEST 


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO PERMIT
THE REQUESTED INCREASE IN THE COMMITMENT, AT A CLOSING TO BE HELD AT OFFICES
DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING WITHIN
FIFTEEN (15) BUSINESS DAYS AFTER THE YOUR RECEIPT OF THE CREDIT FACILITY
EXPANSION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE), AS LONG AS ALL
CONDITIONS CONTAINED IN SECTION 8.03 OF THE MASTER AGREEMENT ARE
SATISFIED.  REFERENCE IS MADE TO THE
MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT TO THIS
REQUEST.


____________________, ______


VIA: _______________________


Prudential Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas  75201
[Note: Subject to change in the event
Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  CREDIT FACILITY EXPANSION REQUEST issued pursuant to
  the Third Amended and Restated Master Credit Facility Agreement, dated as of
  March 30, 2004, by and among the undersigned (the “Borrower”), the Lender and
  Mid-America Apartments of Texas, a Texas limited partnership (as amended from
  time to time, the “Master Agreement”)

  



Ladies and Gentlemen:


This constitutes a Credit Facility Expansion Request
pursuant to the terms of the above-referenced Master Agreement.


          Section
1.          Request.  The  Borrower hereby
requests an increase in the maximum credit commitment in accordance with the
terms of the Master Agreement.
Following is the information required by the Master Agreement with
respect to this Request:


	
   

  	
   

  	
   

  
	
   

  	
            (a)          Amount
  of Increase.  The amount of the
  increase in the maximum credit commitment and the amount of the increases in
  the Fixed Facility Commitment or the Variable Facility Commitment are as
  follows:

  



V-1






	
   

  	
   

  	
   

  	
   

  	
 
 	
   

  
	
   

  	
  NAME

  	
   

  	
  INCREASE

  	 	
  RESULTING AMOUNT OF
COMMITMENT

  
	
   

  	
   

  	
   

  	
   

  	 	
   

  



	
   

  	
   

  	
   

  
	
  MAXIMUM CREDIT

  	
   

  	
   

  
	
  COMMITMENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FIXED FACILITY

  	
   

  	
   

  
	
  COMMITMENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  VARIABLE FACILITY

  	
   

  	
   

  
	
  COMMITMENT:

  	
   

  	
   

  



[Note: Section 8.01 of the Master Agreement limits the
maximum credit commitment to $250,000,000 and the increase in the Maximum
Credit Commitment must be in the minimum amount of $3,000,000.]


	
   

  	
   

  	
   

  
	
   

  	
             (b)          Accompanying
  Documents.  All documents,
  instruments and certificates required to be delivered pursuant to the
  conditions contained in Section 8.03 of the Master Agreement will be
  delivered on or before the Closing Date.

  



          Section
2.          Capitalized Terms.  All capitalized terms used but
not defined
in this Request shall have the meanings ascribed to such terms in the Master
Agreement.


Sincerely,


MID-AMERICA APARTMENT COMMUNITIES,

INC., a Tennessee corporation


	
   

  	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	 


  	
   

  
	
   

  	
            Simon
  R.C. Wadsworth

  
	
   

  	
            Executive
  Vice President

  



V-2






MID-AMERICA APARTMENTS, L.P.,

a Tennessee limited partnership


	
   

  	
   

  	
   

  
	
  By:

  	
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
  a Tennessee corporation, its general partner

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	 


  	
   

  
	
   

  	
            Simon
  R.C. Wadsworth

  
	
   

  	
            Executive
  Vice President

  



V-3












EXHIBIT W TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


VARIABLE FACILITY TERMINATION REQUEST


          THE
MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO
PERMIT THE VARIABLE FACILITY COMMITMENT TO BE REDUCED TO THE AMOUNT DESIGNATED
BY US, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE
SELECTED BY YOU, WITHIN FIFTEEN (15) BUSINESS DAYS AFTER THE YOUR RECEIPT OF
THE VARIABLE FACILITY TERMINATION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE
MAY AGREE), IF ALL CONDITIONS CONTAINED IN SECTION 9.03 ARE SATISFIED.
REFERENCE IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S
OBLIGATIONS WITH RESPECT TO THIS REQUEST.


____________________,
______


VIA:
_______________________


Prudential Multifamily
Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas 75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  VARIABLE
  FACILITY TERMINATION REQUEST issued pursuant to the Third Amended and
  Restated Master Credit Facility Agreement, dated as of March 30, 2004, by and
  among the undersigned (the “Borrower”),
  the Lender and Mid-America Apartments of Texas, L.P., a Texas limited
  partnership (as amended from time to time, the “Master Agreement”)

  



Ladies and
Gentlemen:


This
constitutes a Variable Facility Termination Request pursuant to the terms of
the above-referenced Master Agreement.


          Section
1.          Request. The Borrower hereby requests a
permanent reduction in the amount of the Variable Facility in accordance with
the terms of the Master Agreement. Following is the information required by the
Master Agreement with respect to this Request:


	
   

  	
   

  
	
   

  	
            (a)          Amount
  of Reduction. The amount of the permanent reduction in the Variable
  Facility is as follows:

  
	
   

  	
   

  
	
   

  	
  Amount of
  Reduction:          $________________________________

  



W-1






	
   

  	
   

  	
   

  
	
   

  	
  Resulting
  Amount of

  
	
   

  	
  Variable
 Facility:               $____________________________________

  
	
   

  	
   

  
	
   

  	
            (b)     Required
  Prepayments. Following are any Variable Facilities that shall be prepaid
  in connection with the permanent reduction in the Variable Facility:

  
	
   

  	
   

  
	
   

  	
  Closing Date
  of Advance: 

  	
  __________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Maturity
  Date of Advance:

  	
  __________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
  Amount of
  Advance:

  	
  __________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
            (c)          Accompanying
  Documents. All documents, instruments and certificates required to be
  delivered pursuant to the conditions contained in Section 9.03 of the Master
  Agreement will be delivered on or before the Closing Date.

  



          Section
2.          Prepayments and Termination Fee. The
Borrower shall pay the required amount of the prepayment for any Variable
Facility Advances required to be prepaid, and the required amount of the
Termination Fee, pursuant to the terms of Section 9.03 of the Master Agreement,
as two of the conditions to the permanent reduction in the Variable Facility.


          Section
3.          Capitalized Terms. All capitalized
terms used but not defined in this Request shall have the meanings ascribed to
such terms in the Master Agreement.


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES,

  
	
   

  	
   

  	
  INC., a
  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  
	
   

  	
   

  	
  a Tennessee
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
   

  	
  a Tennessee
  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  



W-2






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  



W-3






EXHIBIT X TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


          THIS
____ AMENDMENT TO THIRD AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT
(the “Amendment”) is made
as of the ____ day of _______________, _____, by and among (i) (a) MID-AMERICA
APARTMENT COMMUNITIES, INC., a Tennessee corporation (the “REIT”), (b) MID-AMERICA APARTMENTS,
L.P., a Tennessee limited partnership (“OP”; the REIT and OP being
collectively referred to as the “Borrower”),
(c) MID-AMERICA APARTMENTS OF TEXAS, L.P., a Texas limited partnership (“MAA of Texas” or the
“Guarantor”; Borrower and the Guarantor
being collectively referred to as the “Borrower
Parties”) and (ii) PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a
Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower Parties and the Lender are parties to that certain Third Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 (as
amended from time to time, the “Master
Agreement”).


          B.          All
of the Lender’s right, title and interest in the Master Agreement and the Loan
Documents executed in connection with the Master Agreement or the transactions
contemplated by the Master Agreement have been assigned to Fannie Mae pursuant
to that certain Assignment of Collateral Agreements and Other Loan Documents,
dated as of August 22, 2002, that certain Assignment of Collateral Agreements
and Other Loan Documents, dated as of December 10, 2003, and that Assignment of
Collateral Agreements and Other Loan Documents dated as of March 31, 2004
(collectively, the “Assignment”). Fannie Mae has not assumed any of the
obligations of the Lender under the Master Agreement or the Loan Documents as a
result of the Assignment. Fannie Mae has designated the Lender as the servicer
of the Advances contemplated by the Master Agreement.


          C.          The
parties are executing this Amendment pursuant to the Master Agreement to
reflect a permanent reduction of all or a portion of the Variable Facility.


          NOW,
THEREFORE, the parties hereto, in consideration of the mutual promises and
agreements contained in this Amendment and the Master Agreement, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby agree as follows:


          Section
1.     Reduction of Variable Facility Commitment.
The Variable Facility Commitment shall be reduced by $____________________, and
the definition of “Variable Facility Commitment” is hereby replaced in its
entirety by the following new definition:


X-1






          “Variable
Facility Commitment” means an aggregate amount of $_______________,which shall be evidenced by the
Variable Facility Note in the form attached hereto as Exhibit I, plus
such amount as the Borrower may elect to add to the Variable Facility
Commitment in accordance with Article VIII, and plus such amount as the
Borrower may elect to reborrow in accordance with Section 2.08, less such
amount as the Borrower may elect to convert from the Variable Facility
Commitment to the Fixed Facility Commitment in accordance with Article III and
less such amount by which the Borrower may elect to reduce the Variable Facility
Commitment in accordance with Article IX.


          Section
2.          Capitalized Terms. All capitalized
terms used in this Amendment which are not specifically defined herein shall
have the respective meanings set forth in the Master Agreement.


          Section
3.          Full Force and Effect. Except as
expressly modified by this Amendment, all terms and conditions of the Master
Agreement shall continue in full force and effect.


          Section
4.          Counterparts. This Amendment may be
executed in counterparts by the parties hereto, and each such counterpart shall
be considered an original and all such counterparts shall constitute one and
the same instrument.


[Signatures on the following pages]


X-2






          IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as an
instrument under seal as of the day and year first above written.


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES,

  
	
   

  	
   

  	
  INC., a
  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  
	
   

  	
   

  	
  a Tennessee
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
   

  	
  a Tennessee
  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
   

  	
  a Texas
  limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MAC of
  Delaware, Inc., a Delaware corporation,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



X-3





	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRUDENTIAL
  MULTIFAMILY MORTGAGE, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



X-4






EXHIBIT Y TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


CREDIT FACILITY TERMINATION REQUEST


          THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS
DELIVERED REQUIRES THAT THIS AGREEMENT SHALL TERMINATE, AND YOU SHALL CAUSE ALL
OF THE COLLATERAL TO BE RELEASED FROM THE COLLATERAL POOL, AT A CLOSING TO BE
HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, WITHIN 30
BUSINESS DAYS AFTER THE YOUR RECEIPT OF THE CREDIT FACILITY TERMINATION REQUEST
(OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE), AS LONG AS ALL CONDITIONS
CONTAINED IN SECTION 10.03 OF THE MASTER AGREEMENT ARE SATISFIED. REFERENCE IS
MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH
RESPECT TO THIS REQUEST.


____________________,
_____


VIA:
______________________


Prudential
Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas 75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  CREDIT
  FACILITY TERMINATION REQUEST issued pursuant to the Third Amended and
  Restated Master Credit Facility Agreement, dated as of March 30, 2004, by and
  among the undersigned (the “Borrower”),
  the Lender and Mid-America Apartments of Texas, L.P., a Texas limited
  partnership (the “Guarantor”;
  collectively, the Borrower and the Guarantor are referred to as the “Borrower Parties”) (as amended from
  time to time, the “Master Agreement”)

  



Ladies and
Gentlemen:


This
constitutes a Credit Facility Termination Request pursuant to the terms of the
above-referenced Master Agreement.


          Section
1.          Request. The Borrower hereby requests a
termination of the Master Agreement and the Credit Facility in accordance with
the terms of the Master Agreement. All documents, instruments and certificates
required to be delivered pursuant to the conditions contained in Section 10.03
of the Master Agreement will be delivered on or before the Closing Date.


Y-1






          Section
2.          Prepayments, Release Fees and Termination Fee.
The Borrower shall pay in full all Notes Outstanding, and the required amount
of the Release Fees and the required Credit Facility Termination Fee as a
condition to the termination of the Master Agreement and the Credit Facility.


          Section
3.          Capitalized Terms. All capitalized
terms used but not defined in this Request shall have the meanings ascribed to
such terms in the Master Agreement.


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES,

  
	
   

  	
   

  	
  INC., a
  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  
	
   

  	
   

  	
  a Tennessee
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
   

  	
  a Tennessee
  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS OF TEXAS, L.P.,

  
	
   

  	
   

  	
  a Texas
  limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  MAC of
  Delaware, Inc., a Delaware corporation,

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



Y-2






Y-3






EXHIBIT Z TO THIRD AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL SUBSTITUTION REQUEST


          THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS
DELIVERED REQUIRES THAT (1) IF YOU CONSENT TO THE SUBSTITUTION OF THE PROPOSED
SUBSTITUTED MORTGAGED PROPERTY FOR THE COLLATERAL RELEASE PROPERTY, (2) WE
ELECT TO CAUSE THE PROPOSED SUBSTITUTED MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL
POOL AND THE PROPOSED COLLATERAL RELEASE PROPERTY TO BE RELEASED FROM THE
COLLATERAL POOL, AND (3) ALL CONDITIONS CONTAINED IN SECTION 7.04(c) OF THE
MASTER AGREEMENT ARE SATISFIED, THEN YOU SHALL PERMIT THE PROPOSED SUBSTITUTED
MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL POOL AND THE PROPOSED
COLLATERAL RELEASE PROPERTY TO BE RELEASED FROM THE COLLATERAL POOL AT A
CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY
YOU, AND OCCURRING WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF OUR ELECTION
(OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE).


____________________,
______


VIA:
_______________________


Prudential
Multifamily Mortgage, Inc.

c/o Prudential Asset Resources

2200 Ross Avenue, Suite 4900E

Dallas, Texas 75201

[Note: Subject to change in the event Lender or its address changes]


	
   

  	
   

  
	
  Re:

  	
  COLLATERAL
  SUBSTITUTION REQUEST issued pursuant to the Third Amended and Restated Master
  Credit Facility Agreement, dated as of March 30, 2004, by and among the
  undersigned (collectively, the “Borrower”),
  Mid-America Apartments of Texas, L.P., a Texas limited partnership, and
  Prudential Multifamily Mortgage, Inc., a Delaware corporation (the “Lender”) (as amended from time to
  time, the “Master Agreement”)

  



Ladies and
Gentlemen:


This constitutes
a Collateral Substitution Request pursuant to the terms of the above-referenced
Master Agreement.


          Section
1.          Request. The Borrower hereby requests
that the Multifamily Residential Property described in this Request be added to
the Collateral Pool in accordance with the terms


Z-1






of the Master
Agreement and that the Collateral Release Property described in this Request be
released from the Collateral Pool in accordance with the terms of the Master
Agreement. Following is the information required by the Master Agreement with
respect to this Request:


	
   

  	
   

  	
   

  
	
   

  	
            (a)          Collateral
  Substitution Description Package. Attached to this Request is the
  Collateral Substitution Description Package and attached thereto are all
  information and documents relating to the proposed Substituted Mortgaged
  Property required by the Collateral Addition Description Package.

  
	
   

  	
   

  	
   

  
	
   

  	
            (b)          Description
  of Proposed Collateral Release Property. The name, owner, address and
  location (county and state) of the Proposed Collateral Release Property to be
  released from the Collateral Pool is as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:          _______________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Record
  Owner:          ________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Beneficial
  Owner:         ______________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:          _____________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
                  _________________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Location:           ____________________________________________

  
	
   

  	
   

  	
   

  
	
   

  	
            (c)          Accompanying
  Documents. All reports, certificates and documents required to be
  delivered pursuant to the conditions contained in Section 6.03 of the Master
  Agreement will be delivered on or before the Closing Date.

  	
   

  



          Section
2.          Collateral Substitution Fee. If the
Lender consents to the addition of the Substitution to the Collateral Pool and
the release of the proposed Collateral Release Property from the Collateral
Pool, and the Borrower elects to add the Substituted Mortgaged Property to the
Collateral Pool and release the proposed Collateral Release Property from the
Collateral Pool, the Borrower shall pay the Collateral Substitution Fee and all
legal fees and expenses payable by the Borrower pursuant to Section 16.04 as
one of the conditions to the closing of the addition of the Substituted
Mortgaged Property to the Collateral Pool and the release of the proposed
Collateral Release Property from the Collateral Pool.


Z-2






          Section
3.          Capitalized Terms. All capitalized
terms used but not defined in this Request shall have the meanings ascribed to
such terms in the Master Agreement.


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES,

  
	
   

  	
   

  	
  INC., a
  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  
	
   

  	
   

  	
  a Tennessee
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  
  Mid-America Apartment Communities, Inc., 

  
	
   

  	
   

  	
   

  	
  a Tennessee
  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Simon R.C.
  Wadsworth

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  



Z-3






 






EXHIBIT
AA TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


SCHEDULE
OF APPROVED

PROPERTY MANAGEMENT AGREEMENTS


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
Property Name

	
 

	
 

	
 

	
Manager

	
 


	
 

	 

	
 

	
 

	
 

	 

	
 


	
1.

	
Paddock Club Brandon Phase I & II

	
 

	
Mid-America Apartment Communities, Inc.

  (Phase II:  Owned and managed by MAAC.

  No separate management agreement.)


	
2.

	
Paddock Park Ocala Phase II

	
 

	
Mid-America Apartment Communities, Inc.


	
3.

	
Paddock Club Tallahassee Phase I

	
 

	
Mid-America Apartment Communities, Inc.


	
4.

	
Woodbridge at the Lake

	
 

	
Mid-America Apartment Communities, Inc.


	
5.

	
Courtyards at Campbell Apartments

	
 

	
Mid-America Apartment Communities, Inc.


	
6.

	
Deer Run Apartments

	
 

	
Mid-America Apartment Communities, Inc.


	
7.

	
Paddock Club Gainesville

	
 

	
Mid-America Apartment Communities, Inc.


	
8.

	
Kenwood Club

	
 

	
Mid-America Apartment Communities, Inc.


	
9.

	
Balcones Woods

	
 

	
Mid-America Apartment Communities, Inc.


	
10.

	
Paddock Club Panama City Apartments

	
 

	
Mid-America Apartment Communities, Inc.


	
11.

	
Paddock Club Tallahassee II Apartments

	
 

	
Mid-America Apartment Communities, Inc.


	
12.

	
Paddock Club Mandarin

	
 

	
Mid-America Apartment Communities, Inc.

  (Owned and managed by MAAC.  No

  separate management agreement.)


	
13.

	
The Corners

	
 

	
Mid-America Apartments, L.P

  (Owned and managed by MAALP.  No

  separate management agreement.)


	
14.

	
Jefferson Pines

	
 

	
Mid-America Apartments, L.P.


	
15.

	
Los Rios

	
 

	
Mid-America Apartments, L.P.





AA-1






EXHIBIT BB TO THIRD AMENDED AND
RESTATED

MASTER CREDIT FACILITY AGREEMENT


INDEPENDENT UNIT ENCUMBRANCES


None


BB-1






EXHIBIT
CC TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL
ADDITION DESCRIPTION PACKAGE


	
 

	
 

	
 

	
 


	
Property Name:

	
__________________________________________________


	
 

	
 


	
Address:

	
__________________________________________________


	
 

	
 


	
City/County/State:

	
__________________________________________________


	
 

	
 


	
General Description, including number of units and
  amenities:


	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
Year Built:

	
__________


	
 

	
 


	
Year Acquired:

	
__________


	
 

	
 


	
Fee Owner:

	
__________________________________________________


	
 

	
 


	
Valuation:

	
________________________________________________________


	
 

	
 


	
Existing Third Party Reports:


	
 


	
 

	
______________________________________________________________


	
 

	
 


	
 

	
______________________________________________________________


	
 

	
 


	
Property Contact:

	
__________________________________________________


	
 

	
 


	
Other Pertinent Information:


	
 


	
 

	
______________________________________________________________


	
 

	
 


	
 

	
______________________________________________________________


	
 

	
 


	
 

	
______________________________________________________________


	
 

	
 


	
 

	
______________________________________________________________





CC-1






EXHIBIT
DD TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL
SUBSTITUTION DESCRIPTION PACKAGE


	
 

	
 

	
 

	
 


	
Property Name:

	
__________________________________________________


	
 

	
 


	
Owner:

	
 

	
__________________________________________________


	
 

	
 

	
 


	
Address:

	
__________________________________________________


	
 

	
 


	
City/County/State:

	
__________________________________________________


	
 

	
 


	
General Description, including number of units and
  amenities:


	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
Year Built:

	
__________


	
 

	
 


	
Year Acquired:

	
__________


	
 

	
 


	
Fee Owner:

	
__________________________________________________


	
 

	
 


	
Valuation:

	
__________________________________________________


	
 

	
 


	
Existing Third Party Reports:


	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
Property Contact:

	
__________________________________________________


	
 

	
 


	
Other Pertinent Information:


	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________


	
 

	
 


	
 

	
__________________________________________________





DD-1






EXHIBIT
EE TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


ADDITIONS
TO COLLATERAL


DUS
APPLICATION CHECKLIST


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	 	
I.

	
PROPERTY
  DATA


	
 

	
 

	
 

	 	
 

	
 


	
REC’D

	
 

	
OUT

	 	
 

	
 


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*A.

	
Current month’s rent roll, dated and certified by
  Borrower; must include apartment number, unit type, tenant name, monthly
  rent, market rent, move-in date, lease expiration date, and whether furnished
  or unfurnished.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*B.

	
Certification of Current Project Rent Roll (Schedule
  H).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*C.

	
Borrower’s Concession Statement (Schedule H-1 and
  H-2).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*D.

	
Commercial leases (if applicable).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*E.

	
Current certified year-to-date operating statement
  and prior three years’ statements. YTD statement must end with the same month
  as the certified rent roll.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  F.

	
Monthly operating statements for the last six
  months.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  G.

	
Vacancy/turnover information for prior 24 months;
  month-by-month breakdown of collections including vacancy, bad debt and
  concessions (may be provided in operating statements).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  H.

	
Delinquency information for 30, 60, 90+ days. Lender
  will take this information in whatever form the Borrower has.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  I.

	
Operating Budget (Schedule I, provides
  instructions).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  J.

	
Copies of existing major service contracts
  (landscaping, trash, pool, laundry, pest and elevator).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  K.

	
Copy of most recent and prior year tax bills and
  most recent assessment.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  L.

	
Copy of complete insurance policies including all
  endorsements, declarations, and premiums.
  Required only if not on blanket policy; Certificate of Insurance
  required for all additions.





EE-1







	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	 	
  M.

	
Major improvements during the last two years and
  projected for the next twelve months.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  N.

	
Existing title report including all easements,
  restrictions, judgments and liens.
  (Lender requirements enclosed).  Will need
  to be updated prior to Closing.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*O.

	
Two copies of the existing as-built survey or site
  plan (Lender requirements enclosed).  Will need
  to be updated prior to Closing.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*P.

	
Legal Description.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  Q.

	
Occupancy Certificates. If not available, please
  provide a letter from the City stating that they are not available, and why.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*R.

	
Ground Lease; please advise if not applicable.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*S.

	
Reciprocal Use Agreement; please advise if not
  applicable.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  T.

	
Operating Licenses.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  U.

	
Termite inspection.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  V.

	
Copy of one bill from each utility for the property.


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
*W.

	
Existing reports, if available (e.g., appraisal,
  market study, engineering, environmental).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  X.

	
Plans, specifications and soil reports (recently
  completed properties only).


	
 

	
 

	
 

	 	
 

	
 


	
_____

	
 

	
_____

	 	
  Y.

	
Copies of any deed or rent restrictions in place;
  please advise if not applicable.





* STARRED ITEMS ARE REQUIRED AS SOON AS POSSIBLE SO THAT
THIRD PARTY REPORTS CAN BE ORDERED.


EE-2






	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
II.

	
Management
  Company


	
 

	
 

	
 

	
 

	
 

	
 


	
REC’D

	
 

	
OUT

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
A.

	
Copy of current or proposed Management Agreement, if
  applicable.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
B.

	
Sample tenant lease.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
C.

	
Management Resume, if other than Borrower-related
  management company.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
D.

	
Accounts payable schedule for 30, 60 and 90+ days;
  list should include vendor name, invoice date, invoice number, description of
  item and amount.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
E.

	
Market survey done by resident manager; to be
  provided to Lender underwriter at site inspection.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
F.

	
Leasing brochure and floor plans.


	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
G.

	
Property Payroll and Benefits (Schedule L).


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
Any
  other information deemed necessary by Lender to complete the underwriting of
  the addition to collateral.





EE-3










EXHIBIT
FF TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


SECOND
AMENDED AND RESTATED GUARANTY


          This
Second Amended and Restated Guaranty (the “Guaranty”) is made and
entered into as of the ___ day of ____________, ____, by MID-AMERICA APARTMENTS
OF TEXAS, L.P., a Texas limited partnership (the “Guarantor”), for the
benefit of PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”),
whose address is 2200 Ross Avenue, Suite 4900E, Dallas, Texas 75201.  


RECITALS


          A.  Lender
has agreed to execute that certain Third Amended and Restated Master Credit
Facility Agreement, dated as of March 30, 2004 (as amended from time to time,
the “Master Agreement”),
pursuant to which, inter alia, Lender has agreed, subject to the terms,
conditions and limitations of the Master Agreement, to loan to Mid-America
Apartment Communities, Inc., a Tennessee corporation (the “REIT”) and Mid-America Apartments,
L.P., a Tennessee limited partnership (“OP”;
the REIT and OP, individually and collectively, the “Borrower”) from time to time Variable
Facility Advances and Fixed Facility Advances (each a “Loan” and, collectively, the
“Loans”) to be evidenced by the Variable
Facility Note and the Fixed Facility Notes, respectively.


          B.  This
Guaranty amends and restates in its entirety that certain Amended and Restated
Guaranty dated as of August 22, 2002 (the “Original
Guaranty”) relating to the Loans.  Guarantor became a party to the Original Guaranty pursuant to
that certain Amended and Restated Master Credit Facility Agreement dated as of
August 22, 2002.


          C.  The
repayment of the Variable Facility Advances and the Fixed Facility Advances,
and all of the other obligations of any Borrower Parties under the Master
Agreement or the other Loan Documents are guaranteed by this Guaranty.


          D.  Guarantor
will receive a direct and material benefit from the Loans to Borrower.


          E.  Lender
is willing to make the Loans to Borrower only if Guarantor agrees to guaranty
all obligations of Borrower Parties under the Loan Documents.


          NOW,
THEREFORE, in order to induce Lender to make the Loans to Borrower, and in
consideration thereof, Guarantor hereby agrees as follows:


          Section
1.     Definitions.  All capitalized terms used but not defined in this Guaranty,
including, without limitation, the term the “Loan Documents” shall have the meanings ascribed to such
terms in the Master Agreement.  The term
“Notes” shall mean, 


FF-1






collectively, the Fixed Facility Notes and the
Variable Facility Note, as amended from time to time.


          Section
2.     Guaranty of Payment. Guarantor irrevocably, absolutely and
unconditionally guarantees to Lender all of the following (collectively, the “Guaranteed
Obligations”):


          (a)     The
due and punctual payment of all principal of, interest on and other amounts
which become due and payable by Borrower under, the Fixed Facility Notes, and
all renewals, extensions, modifications, amendments and restatements of the
Fixed Facility Notes, including, without limitation, all Fixed Facility
Advances made from time to time to Borrower and the interest accruing on such
Fixed Facility Advances;


          (b)     The
due and punctual payment of all principal of, interest on and other amounts
which become due and payable by Borrower under, the Variable Facility Note (and
all Advance Confirmation Instruments issued in connection therewith) and all
renewals, extensions, modifications, amendments and restatements of the
Variable Facility Note (and all Advance Confirmation Instruments issued in
connection therewith), including, without limitation, all Variable Facility
Advances made from time to time to Borrower and the imputed interest accruing
on such Variable Facility Advances;


          (c)     The
due and punctual payment of all amounts which become due and payable by the
Borrower under the Master Agreement or any other Loan Documents from time to
time executed by the Borrower; and


          (d)     The
due and punctual performance of all the obligations of the Borrower under the
Master Agreement, and all of the obligations of the Borrower under any other
Loan Documents from time to time executed by the Borrower.


This Guaranty shall be an unconditional guaranty of
payment and performance and not of collection, and is in no way conditioned
upon any attempt by Lender to pursue or exhaust any remedy against
Borrower.  This Guaranty is a continuing
guaranty which shall remain in full force and effect until all of the
Guaranteed Obligations have been paid and performed in full; and Guarantor
shall not be released from any obligations to Lender under this Guaranty as
long as any amount payable by the Borrower to Lender, or any obligation by the
Borrower, under the Loan Documents is not performed, satisfied, settled or paid
in full.


          Section
3.     Form of Payment.
All payments under this Guaranty shall be made to Lender in immediately
available funds, without reduction by any recoupment, set-off, counterclaim or
cross-claim against Lender.


          Section
4.     Guarantor’s Obligations are Absolute.  The obligations of Guarantor under this
Guaranty shall be absolute and unconditional, shall not be subject to any
counterclaim, set-off, recoupment, deduction or defense based upon any claim
Guarantor may have against Lender or Borrower and shall remain in full force
and effect without regard to, and shall not be released, discharged or
terminated or in any other way 


FF-2






affected by, any circumstance or condition (whether or
not Guarantor shall have any knowledge or notice thereof), including, without
limitation:


          (a)     any
amendment or modification of, or extension of time for payment of any of the
principal of, interest on or other amounts payable under, the Loan Documents
(except that liability of Guarantor hereunder shall be deemed to apply to the
Loan Documents as so amended or modified or to the payment of all amounts so
extended);


          (b)     any
exercise or non-exercise by Lender of any right, power or remedy under or in
respect of the Loan Documents, or any waiver, consent, forbearance, indulgence
or other action, inaction or omission by Lender under or in respect of the Loan
Documents;


          (c)     any
assignment, sale or other transfer of Borrower’s interest in all or any part of
the real or personal property which at any time constitutes collateral for the
payment of the Guaranteed Obligations, including, without limitation, a
conveyance of such property by Borrower to Lender by deed in lieu of foreclosure;


          (d)     any
bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or
other like proceeding involving or affecting Borrower or Lender or their respective
properties or creditors, or any action taken with respect to the Loan Documents
by any trustee or receiver of Borrower or Lender, or by any court, in any such
proceeding;


          (e)     any
invalidity or unenforceability, in whole or in part, of any term or provision
of the Loan Documents or Borrower’s incapacity or lack of authority to enter
into the Loan Documents;


          (f)     any
release, compromise, settlement or discharge with respect to all or any portion
of Borrower’s obligations under the Loan Documents;


          (g)     any
acceptance of additional or substituted collateral for payment of the
Guaranteed Obligations or any release or subordination of any collateral held
at any time by Lender as security for the payment of the Guaranteed
Obligations; or


          (h)     any
resort to Guarantor for payment of all or any portion of the Guaranteed
Obligations, whether or not Lender shall have resorted to any collateral
securing the Guaranteed Obligations or shall have proceeded to pursue or
exhaust its remedies against Borrower (or any other Person) primarily or
secondarily liable for the Guaranteed Obligations.


No exercise, delay in exercise or non-exercise by
Lender of any right hereby given it, no dealing by Lender with Borrower,
Guarantor or any other Person, no change, impairment or suspension of any right
or remedy of Lender, and no act or thing which, but for this provision, could
act as a release or exoneration of the liabilities of Guarantor hereunder,
shall in any way affect, decrease, diminish or impair any of the obligations of
Guarantor hereunder or give Guarantor or any other Person any recourse or
defense against Lender.


FF-3






          Section
5.     Waiver.  Guarantor
unconditionally waives the following:


          (a)     notice
of acceptance of this Guaranty and notice of any of the matters referred to in
Section 4 hereof;


          (b)     all
notices which may be required by statute, rule of law or otherwise to preserve
intact any rights which Lender may have against Guarantor under this Guaranty,
including, without limitation, any demand, proof or notice of non-payment of
any of the principal of, interest on or other amounts payable under the Loan
Documents, and notice of any failure on the part of Borrower to perform and
comply with any covenant, agreement, term or condition of the Loan Documents;


          (c)     any
right to the enforcement, assertion or exercise of any right, power or remedy
conferred upon Lender in the Loan Documents or otherwise;


          (d)     any
requirement that Lender act with diligence in enforcing its rights under the
Loan Documents or this Guaranty;


          (e)     any
right to require Lender to proceed against or exhaust its recourse against
Borrower or any security or collateral held by Lender at any time for the
payment of the Guaranteed Obligations or to pursue any other remedy in its
power before being entitled to payment from Guarantor under this Guaranty or
before proceeding against Guarantor;


          (f)     any
failure by Lender to file or enforce a claim against the estate (either in
administration, bankruptcy or any other proceeding) of Borrower or any other
Person;


          (g)     any
defense based upon an election of remedies by Lender which destroys or
otherwise impairs the subrogation rights of Guarantor or the right of Guarantor
(after payment of the Guaranteed Obligations) to proceed against Borrower for
reimbursement, or both;


          (h)     any
defense based upon any taking, modification or release of any collateral for
the Guaranteed Obligations, or any failure to perfect any security interest in,
or the taking of, or failure to take any other action with respect to, any
collateral securing payment of the Guaranteed Obligations;


          (i)     any
defense based upon the addition, substitution or release, in whole or in part,
of any Person(s), including, without limitation, another guarantor, primarily
or secondarily liable for or in respect of the Guaranteed Obligations;


          (j)     any
rights or defenses based upon an offset by Guarantor against any obligation now
or hereafter owed to Guarantor by Borrower;


          (k)     any
defense of the statute of limitations in any action against Guarantor under
this Guaranty; and


          (l)     all
other notices which may or might be lawfully waived by Guarantor;


FF-4






it being the intention hereof that Guarantor shall
remain liable as principal, to the extent set forth in this Guaranty, until the
payment and performance in full of the Guaranteed Obligations, notwithstanding
any act, omission or thing which might otherwise operate as a legal or
equitable discharge of Guarantor other than the payment and performance in full
of the Guaranteed Obligations.  No delay
by Lender in exercising any rights and/or powers hereunder or in taking any
action to enforce Borrower’s obligations under the Loan Documents shall operate
as a waiver as to such rights or powers or in any manner prejudice any and all
of Lender’s rights and powers hereunder against Guarantor.  The intention of Guarantor under this
Guaranty is that, so long as any of the Guaranteed Obligations remains
unsatisfied, the obligations of Guarantor hereunder shall not be discharged
except by performance and then only to the extent of such performance.  Guarantor agrees that Guarantor’s
obligations hereunder shall not be affected by any circumstances, whether or
not referred to in this Guaranty, which might constitute a legal or equitable
discharge of a surety or guarantor.


          Section
6.     Election of Remedies.  This Guaranty may be enforced from time to
time, as often as occasion therefor may arise, and without any requirement that
Lender must first pursue or exhaust any remedies available to it against
Borrower under the Loan Documents or against any other Person or resort to any
collateral at any time held by it for performance of the Guaranteed Obligations
or any other source or means of obtaining payment of any of the Guaranteed
Obligations.


          Section
7.     Expenses.
Guarantor agrees to pay all costs and out-of-pocket expenses, including
court costs and expenses and the reasonable fees and disbursements of legal
counsel, incurred by or on behalf of Lender in connection with the enforcement
of Guarantor’s obligations under this Guaranty or the protection of Lender’s
rights under this Guaranty.  The
covenants contained in this Section shall survive the payment of the Guaranteed
Obligations.


          Section
8.     Condition of Borrower.
Guarantor is fully aware of the financial condition of Borrower and is
executing and delivering this Guaranty based solely upon Guarantor’s own
independent investigation of all matters pertinent hereto and is not relying in
any manner upon any representation or statement made by Lender.  Guarantor represents and warrants that
Guarantor is in a position to obtain, and Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning Borrower’s
financial condition and any other matters pertinent hereto as Guarantor may
desire and Guarantor is not relying upon or expecting Lender to furnish to
Guarantor any information now or hereafter in Lender’s possession concerning
the same or any other matter.  By
executing this Guaranty, Guarantor knowingly accepts the full range of risks
encompassed within a contract of this type, which risks Guarantor acknowledges.


          Section
9.     Further Assurances.
Guarantor agrees at any time and from time to time upon request by
Lender to take, or cause to be taken, any action and to execute and deliver any
additional documents which, in the opinion of Lender, may be necessary in order
to assure to Lender the full benefits of this Guaranty.


FF-5






          Section
10.     Subordination. Guarantor hereby
irrevocably and unconditionally agrees that any claims, direct or indirect,
Guarantor may have by subrogation or other form of reimbursement, against
Borrower or to any security or any interest therein, by virtue of this Guaranty
or as a consequence of any payment made by Guarantor pursuant to this Guaranty,
shall be fully subordinated in time and right of payment to the payment in full
of the Guaranteed Obligations and all other obligations of Guarantor to Lender
under this Guaranty.


          Section
11.     No Subrogation.  Except as expressly provided in Section 10
above, Guarantor shall not have any right of subrogation against Borrower (or
any other Borrower Party) by reason of any payment by Guarantor under this
Guaranty until such time as all of the Obligations have been satisfied in
full.  Nothing in the foregoing shall
affect any claim which any Guarantor has against Borrower under the terms of
the Contribution Agreement.


          Section
12.     Insolvency and Liability of Borrower (and any other
Borrower Party).  So long
as any of the Guaranteed Obligations is unpaid and this Guaranty is in effect,
and to the extent not prohibited by the applicable bankruptcy court, Guarantor
agrees to file all claims against Borrower in any bankruptcy or other
proceeding in which the filing of claims is required by law in connection with
indebtedness owed by Borrower to Guarantor and to assign to Lender all rights
of Guarantor thereunder up to the lesser of (i) the amount of such indebtedness
or (ii) the amount of the Guaranteed Obligations guaranteed by Guarantor.  In all such cases the Person or Persons
authorized to pay such claims shall pay to Lender the full amount thereof to
the full extent necessary to pay the Guaranteed Obligations, and Guarantor
hereby assigns to Lender all of Guarantor’s rights to all such payments to
which Guarantor would otherwise be entitled.
Notwithstanding the foregoing, and except to the extent that any sums
owed by Borrower to Lender under the Loan Documents shall have been fully
satisfied thereby, the liability of Guarantor hereunder shall in no way be
affected by


          (a)     the
release or discharge of Borrower in any creditors’, receivership, bankruptcy or
other proceedings; or


          (b)     the
impairment, limitation or modification of the liability of Borrower or the
estate of Borrower in bankruptcy resulting from the operation of any present or
future provisions of the Bankruptcy Code or other statute or from the decision
in any court.


          Section
13.     Preferences, Fraudulent Conveyances, Etc.  If Lender is required to refund, or
voluntarily refunds, any payment received from Borrower because such payment is
or may be avoided, invalidated, declared fraudulent, set aside or determined to
be void or voidable as a preference, fraudulent conveyance, impermissible
setoff or a diversion of trust funds under the bankruptcy laws or for any
similar reason, including, without limitation, any judgment, order or decree of
any court or administrative body having jurisdiction over Lender or any of its
property, or any settlement or compromise of any claim effected by Lender with
Borrower or other claimant (a “Rescinded
Payment”), then Guarantor’s liability to Lender shall continue
in full force and effect, or Guarantor’s liability to Lender shall be
reinstated, as the case may 


FF-6






be, with the same effect and to the same extent as if
the Rescinded Payment had not been received by Lender, notwithstanding the
cancellation or termination of any Note or any of the other Loan
Documents.  In addition, Guarantor shall
pay, or reimburse Lender for, all expenses (including all reasonable attorneys’
fees, court costs and related disbursements) incurred by Lender in the defense
of any claim that a payment received by Lender in respect of all or any part of
the Guaranteed Obligations must be refunded.
The provisions of this Section shall survive the termination of this
Guaranty and any satisfaction and discharge of Borrower by virtue of any
payment, court order or any federal or state law.


          Section
14.     Waiver.  Neither this Guaranty nor any term hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by Lender
and Guarantor expressly referring to this Guaranty and to the provisions so
changed or limited.  No such 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 Lender in exercising any right
under this Guaranty shall operate as a waiver thereof or otherwise by prejudice
thereto.


          Section
15.     Cross-Default with Master Agreement.  The occurrence of an Event of Default under
the Master Agreement shall constitute a default under this Guaranty.  Upon the occurrence of an Event of Default
under the Master Agreement, Lender, at Lender’s option, may exercise any or all
of the remedies to which it may be entitled under this Guaranty or other Loan
Documents upon the breach of any covenant or agreement by Guarantor under this
Guaranty.


          Section
16.     Security for the Guaranty.  Guarantor’s obligations under this Guaranty
are secured by the Security Documents, if any,
executed by Guarantor from time to time to secure the Guaranty, and
reference to the Master Agreement and such documents is made for Lender’s
rights upon the occurrence of a default under this Guaranty.  Each Security Document shall be released as
security for the Guaranty and this Guaranty shall be released in accordance
with the provisions of the Master Agreement and the Security Document.


          Section
17.     Limitations on Liability.  The provisions of Article XXII of the Master
Agreement (entitled “Limits on Personal Liability”) are hereby incorporated
into this Guaranty by this reference as if the text of such Article were set
forth in its entirety herein.


          Section
18.     Notices.  All notices or other communications hereunder shall be
sufficiently given and shall be deemed given when sent in the manner prescribed
by the Master Agreement.


          Section
19.     Assignability by Lender.  Lender may, without notice to Guarantor,
assign or transfer the Loans and the Loan Documents, in whole or in part.  In such event, each and every immediate and
successive assignee, transferee or holder of all or any part of the Loans and
the Loan Documents shall have the right to enforce this Guaranty, by legal
action or otherwise, as fully as if such assignee, transferee, or holder were
by name specifically given such right and power in this Guaranty.  Lender shall 


FF-7






have an unimpaired right to enforce this Guaranty for
its benefit as to so much of the Loans and the Loan Documents as Lender has not
sold, assigned or transferred.


          Section
20.     Guarantor Bound by Judgment Against Borrower.  Guarantor shall be conclusively
bound, in
any jurisdiction, by the judgment in any action by Lender against Borrower in
connection with the Loan Documents (wherever instituted) as if Guarantor were a
party to such action even if not so joined as a party.


          Section
21.     Governing Law.  The provisions of Section 23.06 of the
Master Agreement (entitled Choice of Law; Consent to Jurisdiction; Waiver of
Jury Trial) are hereby incorporated into this Agreement by this reference to
the fullest extent as if the text of such Section were set forth in its
entirety herein.


          Section
22.     Invalid Provisions.  If any provision of this Guaranty or the
application thereof to Guarantor or any circumstance in any jurisdiction whose
laws govern this Guaranty shall, to any extent, be invalid or unenforceable
under any applicable statute, regulation or rule of law, then such provision
shall be deemed inoperative to the extent of such invalidity or
unenforceability and shall be deemed modified to conform to such statute,
regulation or rule or law.  The
remainder of this Guaranty and the application of any such invalid or
unenforceable provision to parties, jurisdictions or circumstances other than
those to whom or to which it is held invalid or unenforceable, shall not be
affected by such invalidity or unenforceability nor shall such invalidity or
unenforceability affect the validity or enforceability of any other provision
of this Guaranty.


          Section
23.     General Provisions.  This Guaranty shall be binding upon the
respective successors and assigns of Guarantor, and shall inure to the benefit
of Lender and its successors and assigns, including, without limitation, each
successive holder of the Notes.  The
descriptive headings of the Sections of the Guaranty have been inserted herein
for convenience of reference only and shall not define or limit the provisions
hereof.


          Section
24.     Obligations Joint and Several.  All obligations of the Guarantors shall be
joint and several.


(Remainder of this
page deliberately left blank)


FF-8






          IN
WITNESS WHEREOF, Guarantor has signed this Guaranty under seal as of the day
and year first above written.


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA APARTMENTS OF TEXAS, L.P., 
a Texas
  limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  MAC of Delaware, Inc., a Delaware corporation,
 its
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
   

  	
  Its: 

  	
   

  



FF-9






EXHIBIT
GG TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


INTEREST
RATE HEDGE SECURITY,

PLEDGE AND ASSIGNMENT AGREEMENT


          This
INTEREST RATE HEDGE SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT (this “Agreement”) is made as of the ____ day
of _______________, _____, by and among (i) (a) MID-AMERICA APARTMENT
COMMUNITIES, INC., a Tennessee corporation (the “REIT”), (b) MID-AMERICA APARTMENTS, L.P., a Tennessee
limited partnership (“OP”; the REIT and OP being collectively referred
to as the “Borrower”), (c) MID-AMERICA APARTMENTS OF TEXAS, L.P., a
Texas limited partnership (“MAA of Texas”
or the “Guarantor”;
Borrower and the Guarantor being collectively referred to as the “Grantor”) and (ii) PRUDENTIAL
MULTIFAMILY MORTGAGE, INC. (“Lender”).
[ADD
SWAP PROVIDER]  


RECITALS:


          A.          Grantor
and the Lender are parties to that certain Third Amended and Restated Master
Credit Facility Agreement, dated as of March 30, 2004 (as amended from time to
time, the “Master Agreement”),
pursuant to which Lender has agreed to provide certain advances in accordance
with and subject to the terms of the Master Agreement.  As set forth in Section 1.2 of this
Agreement, all capitalized terms not otherwise defined herein shall have their
respective meanings set forth in the Master Agreement.



          B.          As
required by the Master Agreement, the Grantor has made arrangements for the
acquisition of a Hedge or Hedges pursuant to certain documents attached as Exhibit A to this Agreement (the
“Hedge Documents”). 


          C.          As
security for the Grantor’s obligations under the Master Agreement and the Note,
the Grantor and the Lender are entering into this Agreement.


          NOW,
THEREFORE, in consideration of the mutual covenants and undertakings set forth
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor and the Lender agree
as follows:


          1.          Incorporation
of Recitals; Definitions; Interpretation; Reference Materials.



                    1.1          Incorporation
of Recitals. The recitals set forth in this Agreement
are, by this reference, incorporated into and deemed a part of this Agreement. 



                    1.2          Definitions.
Capitalized terms used in this Agreement shall have the meanings
given to those terms in this Agreement.
Capitalized terms used in this Agreement and not defined in this
Agreement, but defined in the Master Agreement, shall have the meanings given
to those terms in the Master Agreement.  



                    1.3          Interpretation.
Words importing any gender include all
genders. The singular form of any word
used in this Agreement shall include the plural, and vice versa, unless  


GG-1






the context otherwise requires.  Words importing persons include natural
persons, firms, associations, partnerships and corporations.  The parties hereto acknowledge that each party
and their respective counsel have participated in the drafting and revision of
this Agreement. Accordingly, the parties agree that any rule of construction
which disfavors the drafting party shall not apply in the interpretation of
this Agreement or any statement or supplement or exhibit hereto.



                    1.4          Reference
Materials. Sections mentioned by number only are the
respective sections of this Agreement so numbered. Reference to “this section” or “this subsection” shall refer
to
the particular section or subsection in which such reference appears. Any
captions, titles or headings preceding the text of any section and any table of
contents or index attached to this Agreement are solely for convenience of
reference and shall not constitute part of this Agreement or affect its
meaning, construction or effect. 



          2.          Collateral
and Obligations; Further Assurances. 



                    2.1          Security
Interest in Collateral. To secure the Grantor’s obligations under
the Master Agreement, the Note and the other Loan Documents (the “Obligations”), the Grantor hereby
assigns, pledges and grants a security interest to the Lender in and to all of
the Grantor’s right, title and interest in and to the following (collectively,
the “Collateral”): 


                         (i)           the
Hedge and the Hedge Documents;


                         (ii)         any
and all moneys (collectively, “Payments”)
payable to the Grantor, from time to time, pursuant to the Hedge Documents by
the counterparty under the Hedge Documents (the “Counterparty”);


                         (iii)         all
rights of the Grantor under any of the foregoing, including all rights of the
Grantor to the Payments, contract rights and general intangibles now existing
or hereafter arising with respect to any or all of the foregoing;


                         (iv)         all
rights, liens and security interests or guarantees now existing or hereafter
granted by the Counterparty or any other person to secure or guaranty payment
of the Payments due pursuant to the Hedge Documents;


                         (v)          all
documents, writings, books, files, records and other documents arising from or
relating to any of the foregoing, whether now existing or hereafter arising;


                         (vi)         all
extensions, renewals and replacements of the foregoing; and


                         (vii)        all
cash and non-cash proceeds and products of any of the foregoing, including,
without limitation, interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the other
Collateral.



                      [(viii)         ADD
SWAP PAYMENTS]  



          3.          Delivery
of Hedge Documents. 


GG-2







                    3.1          Acquisition
of Hedge; Delivery of Hedge Documents.
The Grantor has, on or before the date of this Agreement, executed and
delivered the Hedge Documents to the Counterparty and has delivered to the
Lender fully executed originals of such Hedge Documents. True, complete and correct copies of the
Hedge Documents and all amendments thereto, fully executed by all parties, are
attached as Exhibit A hereto. The Grantor hereby represents and warrants
to the Lender that there is no additional security for or any other
arrangements or agreements relating to the Hedge Documents.  



                    3.2          Obligations
Remain Absolute. Nothing
contained herein shall relieve the Grantor of its primary obligation to pay all
amounts due in respect of its obligations under the Master Agreement, the Note
or the Other Loan Documents. 



          4.          Representations
and Warranties. 



                    4.1          Representations
and Warranties of the Grantor. The Grantor represents and warrants to the
Lender on the Closing Date that: 


                         (i)          it
has all requisite power and authority to enter into this Agreement and to carry
out its obligations under this Agreement; the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary
action on the part of the Grantor; this Agreement has been duly executed and delivered
by it and is the valid and binding obligation of the Grantor, enforceable
against it in accordance with its terms; and


                         (ii)          it
is the legal and beneficial owner of, and has good and marketable title to (and
full right and authority to assign), the Collateral, free and clear of all
Liens.



          5.          Maintenance,
Administration of Hedge. 



                    5.1          Compliance
with Reimbursement Agreement. The Grantor agrees to comply with the
provisions of the Master Agreement related to obtaining and maintaining at all
applicable times a Hedge which satisfies the requirements of the Master
Agreement. 



                    5.2          Event
of Default. Upon the occurrence and during the
continuance of any “Event of Default”
under the Master Agreement, the Lender shall have and may exercise the same
rights, powers, and remedies with respect to the Collateral that the Grantor
may exercise, which rights, powers, and remedies are incorporated herein by
this reference for all purposes. In furtherance and not in limitation of the
foregoing, the Lender shall have all rights, remedies and recourses with
respect to the Collateral granted in the Master Agreement and any other
instrument executed in connection therewith, or existing at common law or
equity (including specifically those granted by the Uniform Commercial Code as
adopted in the District of Columbia, the right of offset, the right to sell the
Collateral at public or private sale, and the right to receive distributions to
Grantor, and such rights and remedies (i) shall be cumulative and concurrent,
(ii) may be pursued separately, successively or concurrently against the
Grantor and any other party obligated under the Obligations, or against the
Collateral, or any other security for the Obligations, at the sole discretion
of the Lender, (iii) may be exercised as often as occasion therefor shall
arise, it being agreed by Grantor that the exercise or failure to exercise 


GG-3












any of same
shall in no event be construed as a waiver or release thereof or of any other
right, remedy or recourse, and (iv) are intended to be and shall be,
non-exclusive.


          If
the proceeds of sale, collection or other realization of or upon the Collateral
are insufficient to cover the costs and expenses of such realization and the
payment in full of the Obligations, the Grantor shall remain liable for any
deficiency (subject to the applicable non-recourse provisions of the Master
Agreement).


          Upon
the occurrence and continuance of an “Event of Default” under the Master
Agreement, in case of any sale by the Lender of any of the Collateral, which
may be elected at the option and in the complete discretion of the Lender, the
Collateral so sold may be retained by the Lender until the selling price is
paid by the purchaser, but the Lender shall not incur any liability in case of
failure of the purchaser to take up and pay for the Collateral so sold. In case
of any such failure, such Collateral so sold may be again similarly sold.  After deducting all costs or expenses of
every kind (including, without limitation, the reasonable attorneys’ fees and
legal expenses incurred by the Lender), the Lender shall apply the residue of
the proceeds of any sale or sales in such manner as the Lender may deem
advisable.


          6.     Miscellaneous
Provisions.


                  6.1     Termination.
 This Agreement shall terminate upon the date
which is ninety-one (91) days after the date on which all amounts due under the
Master Agreement, the Note and the other Loan Documents have been paid in full,
provided that during such ninety-one (91) day period no Act of Bankruptcy (as
defined below) shall have occurred. “Act of Bankruptcy” means the filing of a
petition in bankruptcy or other commencement of a bankruptcy or similar
proceeding by or against the Grantor under any applicable bankruptcy,
insolvency, reorganization or similar law now in effect or any such proceeding
by or against the Grantor under any applicable bankruptcy, insolvency,
reorganization or similar law in effect after the date of this Agreement. Upon
termination of this Agreement, all Collateral shall be reassigned to the
Grantor without recourse, representation or warranty.


                  6.2     Attorney-In-Fact.
 Without limiting any rights or powers
granted by this Agreement to the Lender, upon the occurrence and during the
continuance of any “Event of Default” under the Master Agreement, the Lender is
hereby appointed the attorney-in-fact of the Grantor for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instruments which the Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Lender shall have the right and power to receive, endorse
and collect all checks made payable to the order of the Grantor representing
any dividend, payment or other distribution in respect of the Collateral or any
part thereof and to give full discharge for the same.


                  6.3     Further
Assurances.  At any time and from
time to time, at the expense of the Grantor, the Grantor shall promptly execute
and deliver to Lender all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Lender may request,
in order to carry out the intent and purposes of this Agreement or to enable
Lender to 


GG-4






exercise and
enforce its rights and remedies under this Agreement all at the sole expense of
the Grantor.


                  6.4     Expenses.
 The Grantor agrees to pay to Lender all
reasonable out-of-pocket expenses (including reasonable expenses for legal services
of every kind) of, or incident to, the preservation of rights under or
enforcement of any of the provisions of this Agreement or performance by Lender
of any obligations of the Grantor in respect of the Collateral which Grantor
has failed or refused to perform, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in Collateral and
defending or asserting rights and claims of Lender in respect thereof, by
litigation or otherwise, including expenses of insurance, and all such expenses
shall be Obligations hereby secured.


                  6.5     No
Deemed Waiver.  No failure on the
part of Lender or any of its agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
Lender or any of its agents of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies herein are cumulative and are not exclusive of any
remedies provided by law.


                  6.6     Entire
Agreement.  This Agreement and the
Master Agreement constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, between the parties to this
Agreement with respect to the subject matter of this Agreement. This Agreement
may not be amended, changed, waived or modified except by a writing executed by
each party hereto.


                  6.6.     Successors
and Assigns.  This Agreement shall
inure to the benefit of, and be enforceable by, the Grantor and Lender and
their respective successors and permitted assigns, and nothing herein expressed
or implied shall be construed to give any other person any legal or equitable
rights under this Agreement.


                  6.7.     Notices.
 The provisions of Section 17.08 of the
Master Agreement (entitled “Notices”) are hereby incorporated into this
Agreement by this reference to the fullest extent as if the text of such
provisions were set forth in their entirety herein.


                  6.8.     Governing
Law.  The provisions of Section
17.06 of the Master Agreement (entitled “Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this
Agreement by this reference to the fullest extent as if the text of such
provisions were set forth in their entirety herein.


                  6.9.     Severability.
 If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.


                  6.10.     Multiple
Counterparts. This Agreement may be simultaneously executed in multiple
counterparts, all of which shall constitute one and the same instrument and
each of which shall be, and shall be deemed to be, an original.


GG-5






                  6.11.     Limits
on Personal Liability.  The
provisions of Article 15 of the Master Agreement (entitled “Limits on Personal
Liability”) are hereby incorporated into this Agreement by this reference to
the fullest extent as if the text of such Article were set forth in its
entirety herein.


          The
Grantor and Lender have caused this Agreement to be signed as an instrument
under seal, on the date first written above, by their respective officers duly
authorized.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GRANTOR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA
  APARTMENT COMMUNITIES, INC.,

  a Tennessee corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
  Simon R.C. Wadsworth

  
	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA
  APARTMENTS, L.P.,

  a Tennessee limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mid-America Apartment Communities, Inc.,

  a Tennessee corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
  Simon R.C. Wadsworth

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MID-AMERICA
  APARTMENTS OF TEXAS, L.P.,

  a Texas limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MAC of Delaware, Inc., a Delaware corporation, 

  its general partner

  
	
   

  	
   

  	
   

  






	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	 


  



[Signatures continued on following page]


GG-6






	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LENDER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PRUDENTIAL
  MULTIFAMILY MORTGAGE, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ADD SWAP PROVIDER]

  



GG-7






EXHIBIT A


Hedge Documents


(See Attached)












EXHIBIT HH TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


DUS PROPERTIES


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Property Name

  	
   
  	
   
  	
  Location

  	
   
  
	
   

  	 


  	
   

  	
   

  	 


  	
   

  
	
  Lane at Towne Crossing

  	
  Mesquite, Texas

  
	
  Northwood Place

  	
  Arlington, Texas

  
	
  The Woods

  	
  Austin, Texas

  
	
  Walden Run

  	
  McDonough, Georgia

  
	
  Lakeshore Landing

  	
  Jackson, Mississippi

  
	
  Woodstream

  	
  Greensboro, North Carolina

  
	
  Colony at South Park

  	
  Aiken, South Carolina

  
	
  Hamilton Pointe

  	
  Chattanooga, Tennessee

  
	
  Hidden Creek

  	
  Chattanooga, Tennessee

  
	
  Cedar Mill

  	
  Memphis, Tennessee

  
	
  East View

  	
  Memphis, Tennessee

  


HH-1






EXHIBIT II TO THIRD AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


APPROVED SWAPS


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notional Amount

  	
   

  	
  Maturity

  	
   

  	
  Rate

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   25,000,000.00

  	
   

  	
  9/1/2005

  	
   

  	
  6.813

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  9/1/2006

  	
   

  	
  6.790

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  12/1/2005

  	
   

  	
  5.595

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  6/1/2007

  	
   

  	
  5.730

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  4/1/2007

  	
   

  	
  5.010

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  50,000,000.00

  	
   

  	
  6/1/2008

  	
   

  	
  5.268

  	
  %

  	
  1st TN

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  50,000,000.00

  	
   

  	
  6/1/2010

  	
   

  	
  4.825

  	
  %

  	
  Sun Trust

  	
   

  	
  Fannie Enhanced

  
	
  $

  	
  25,000,000.00

  	
   

  	
  9/1/2007

  	
   

  	
  6.220

  	
  %

  	
  AmSouth

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  3/3/2005

  	
   

  	
  5.430

  	
  %

  	
  1st TN

  	
   

  	
  Fannie Accepted

  
	
  $

  	
  25,000,000.00

  	
   

  	
  3/1/2009

  	
   

  	
  3.910

  	
  %

  	
  1st TN

  	
   

  	
  Fannie Accepted

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  300,000,000.00

  	
   

  	
   

  	
   

  	
  5.474

  	
  %

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Fannie Accepted - Forward

  
	
  $

  	
  40,000,000.00

  	
   

  	
  3/31/2010

  	
   

  	
  4.850

  	
  %

  	
  AmSouth

  	
   

  	
  Swap for 4/1/04

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  340,000,000.00

  	
   

  	
   

  	
   

  	
  5.400

  	
  %

  	
   

  	
   

  	
   

  






  (1) Excludes swaps and caps
  purchased for the MAA Tax-Exempt Bond Facility, which requires acceptable
  hedges on all debt.


1