EXHIBIT
10.8


SECOND AMENDED AND
RESTATED MASTER CREDIT FACILITY AGREEMENT 
(MAA II)


          THIS
SECOND 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”) and (b)
MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership (“OP”; the
REIT and OP being collectively referred to as the “Borrower”), and (ii)
PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”).  


RECITALS



          A.          Borrower
and Lender entered into that certain Master Credit Facility Agreement dated as
of August 22, 2002 (the “Original Agreement”), pursuant to which Lender
agreed to make credit available to Borrower under the terms and conditions set
forth in the Original Agreement.  


          B.          Pursuant
to various amendments to the Original Agreement, among other things 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. 



          C.          The
Borrower 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 December 10, 2003 (the “First
Amended and Restated Agreement”). 


          D.          The
Borrower has requested that various terms and conditions of the Original
Agreement be modified. The Borrower and the Lender now wish to amend and
restate the Original Agreement in its entirety.


          E.          The
REIT owns, directly and indirectly, 85% of the voting interests in OP.


          F.          The
Borrower owns Multifamily Residential Properties as more particularly described
in Exhibit A to this Agreement.


          G.          Pursuant
to the Original Agreement, the Lender established a $198,192,000 credit
facility, comprised of a $0 Fixed Facility Commitment and a $198,192,000
Variable Facility Commitment. 


          H.          Pursuant
to various amendments to the Original Agreement, the Lender has increased the
Credit Facility to $419,020,000.


          I.           Pursuant
to that certain First Amendment to Amended and Restated Master Credit Facility
Agreement dated as of December 11, 2003 the Lender increased the Credit
Facility to $436,608,000.






          J.
          Pursuant to the First Amended and Restated
Agreement, the Lender agreed that the Credit Facility may be increased to an
amount not to exceed $511,000,000. The Borrower 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. 



          K.          To
secure the obligations of the Borrower under this Agreement and the other Loan
Documents issued in connection with the Credit Facility, the Borrower has
created a Collateral Pool in favor of the Lender. The Collateral Pool also
secures the Borrower’s obligations under that certain Third Amended and
Restated Master Credit Facility Agreement between Lender, Borrower and
Mid-America Apartments of Texas, L.P. dated of even date herewith (the “Other
Credit Agreement”). The Collateral Pool is comprised of (i) Security
Instruments on certain Multifamily Residential Properties owned by the Borrower
and (ii) any other Security Documents executed by the Borrower pursuant to this
Agreement or any other Loan Documents. 


          L.          Each
of the Security Documents shall be cross-defaulted (i.e., a default under any
Security Document, under this Agreement or under the Other Credit 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’s obligations under this Agreement, the other Loan Documents
issued in connection with the Credit Facility and the Other Credit Agreement)
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.


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


          NOW,
THEREFORE, the Borrower 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 Original Agreement as follows:


ARTICLE I

DEFINITIONS


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


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          “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 Property” means each Multifamily Residential Property owned by
the Borrower (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.


          “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--

  
	
   

  	
   

  	
   

  
	
   

  	
  (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


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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
$413,374,000. Any portion of the Commitment above $413,374,000 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 $413,374,000.


          “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.


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


          “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.


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          “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 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 the OP or ceases to own, directly or indirectly, 100% of the sole
general partner or managing member of the OP, or (b) 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 then outstanding, or (c) 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 after the Initial
Closing Date on which the funding or other transaction requested in a Request
is required to take place.


          “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
the Borrower’s 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

  




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  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).


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


          “Compliance
Certificate” means a certificate of the Borrower 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,


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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, 2014. 


          “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

  
	
   

  	
   

  
	
  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

  



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  (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 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 

  



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  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:

  




	
   

  	
   

  	
   

  
	
   

  	
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 applicable Variable Facility Termination Date].


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          “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 $0, 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 Initial Closing Date.


          “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.


          “Geographical
Diversification Requirements” means (a) at all times that aggregate
Advances Outstanding are $100,000,000 or less, a requirement that the
Collateral Pool consist of at least five (5) Mortgaged Properties located in at
least four (4) states, (b) at all times that aggregate Advances Outstanding are
more than $100,000,000 and equal to or less than $200,000,000, a requirement
that the Collateral Pool consist of at least ten (10) Mortgaged Properties
located in at least six (6) states, (c) at all times that aggregate Advances
Outstanding are more than $200,000,000 and equal to or less than $300,000,000,
a requirement that the Collateral Pool consist of at least twenty (20)
Mortgaged Properties located in at least seven (7) states, and (c) at all times
that aggregate Advances Outstanding are more than $300,000,000, a requirement
that the Collateral Pool consist of at least twenty-five (25) Mortgaged
Properties located in at least seven (7) states.


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          “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.


          “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.


          “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


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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, 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


-12-






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 the Variable Advance Outstanding on the date hereof in the
principal amount of $436,608,000. 


          “Initial
Closing Date” means August 22, 2002.


          “Initial
Commitment” means the portion of the Commitment equal to or less than
$183,372,000. Any portion of the Commitment equal to or less than $183,372,000
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.


          “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


-13-






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 Security Documents, all documents
executed by the Borrower pursuant to the General Conditions set forth in
Article XI of this Agreement and any other documents executed by the Borrower
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 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 the
Borrower, (b) the present or future ability of the Borrower 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.


-14-






          “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 Additional Mortgaged Properties, 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 the
Borrower or an Affiliate of the Borrower 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 the Borrower
or an Affiliate of the Borrower 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).


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


          “Obligations”
means the aggregate of the obligations of the Borrower 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


-15-






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 the Borrower 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 $183,372,000
but less than $413,374,000. Any portion of the Commitment in excess of
$183,372,000 but less than $413,374,000 shall be deemed to be part of the
Original Expansion Commitment.


          “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.


          “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 the Borrower’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


-16-






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 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.


-17-






          “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 $163,392,000 unless Borrower elects in writing a lesser
amount not to exceed $600,000,000 minus the amount of the Commitment in effect
at any time, but in no event greater than $163,392,000. 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 Secuirty Agreement,
the Replacement Reserve Agreements and any other documents executed by the
Borrower from time to time to secure the Borrower’s 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 the Borrower to or for the benefit of the
Lender to secure the obligations of the Borrower under the Loan Documents. With
respect to each Mortgaged Property owned by the Borrower, the Security
Instrument shall be substantially in the form published by Fannie Mae for use
in the state 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:


-18-







	
   

  	
   

  	
   

  
	
   

  	
  (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;

  
	
   

  	
   

  	
   

  
	
   

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

  



-19-







	
   

  	
   

  	
   

  
	
   

  	
  (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) 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
the Borrower (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 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.


-20-






          
“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.


          “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.


-21-






          “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 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 the
Borrower, or (iii) the issuance or other creation of new ownership interests in
the Borrower other than (a) sales of the stock of the REIT on the New York
Stock Exchange or (b) private placements of ownership interests in the Borrower
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 the Borrower, or (iv) a merger or consolidation
of the Borrower into another entity or of another entity into the Borrower, or
(v) the reconstitution of the Borrower 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
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


-22-






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 under the Variable
Facility Commitment.


          “Variable
Facility” means the agreement of the Lender to make Advances to the
Borrower 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 $436,608,000, 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, and 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 to the Lender to
evidence the Borrower’s 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).


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.


-23-






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 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


-24-






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: 


	
   

  	
   

  	
   

  
	
   

  	
  (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 CC 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 

  



-25-







	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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; 

  
	
   

  	
   

  	
   

  
	
   

  	
  (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.

  



-26-






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 (A) in the case of a Fixed Facility Advance drawn from
the Initial Commitment, 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
November 10, 2014, and (B) in the case of a Fixed Facility Advance drawn from
the Original Expansion Commitment, 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, 2014. 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 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


-27-






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:


          (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.


-28-






          (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.


SECTION 3.10 Defeasance. At such time as the
Borrower elects to convert all or a portion of the Variable Facility Commitment
to a Fixed Facility Commitment pursuant to Section 3.07 of this Agreement, or
elects that any expansion of the Commitment shall be a Fixed Facility
Commitment, the Borrower shall select defeasance or yield maintenance with
respect to prepayments of Fixed Facility Advances on the Conversion Request or
Credit Facility Expansion Request for the first Fixed Facility Commitment. If
defeasance is selected, this Section 3.10 shall apply. The election of the
Borrower as to defeasance or yield maintenance in the first Conversion Request
or Credit Facility Expansion Request relating to a Fixed Facility Commitment
shall apply to all Fixed Facility Advances during the term of this Agreement.
Fixed Facility Advances are not prepayable at any time, provided that,
notwithstanding the foregoing, the Borrower may prepay any Fixed Facility
Advance during the last ninety (90) days of the term of such Fixed Facility
Advance and provided that Fixed Facility Advances may be defeased pursuant to
the terms and conditions of this Section.




               (a)          Conditions.
  Subject to Section 3.10(d), the Borrower shall have the right to obtain the
  release of Mortgaged Properties from the lien of the related Security
  Instruments (and all collateral derived from such Mortgage Properties,
  including assignment of leases, fixture filings and other documents and
  instruments evidencing a


-29-







	
   

  	
   

  	
   

  
	
   

  	
   

  	
   lien or security interest in the Borrower’s assets
  [except the Substitute Collateral] shall be released) upon the satisfaction
  of all of the following conditions:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  
          (1)          Defeasance
Notice. The Borrower shall give Lender a notice (the “Defeasance
Notice”), in the manner specified in Section 3.10(g)(4), on a form
provided by Lender, specifying a Business Day (the “Defeasance Closing
Date”) which the Borrower desires to consummate the Defeasance. The
Defeasance Closing Date specified by the Borrower may not be more than 45
calendar days, nor less than 30 calendar days, after the date on which the
Defeasance Notice is received by Lender. The Borrower shall also specify in
the Defeasance Notice the name, address and telephone number of the Borrower
for notices pursuant to Section 3.10(g)(4). The form Defeasance Notice
provided by Lender specifies: (i) which Mortgaged Properties the Borrower
proposes to be released, provided that any Mortgaged Property securing only
Fixed Facility Advances must be among the Mortgaged Properties proposed to be
released; (ii) the name, address and telephone number of Lender for notices
pursuant to Section 3.10(g)(4); (iii) the account(s) to which payments to
Lender are to be made; (iv) whether a Fannie Mae Investment Security will be
offered for use as the Substitute Collateral and, if not, that U.S. Treasury
Securities will be the Substitute Collateral; (v) whether the Successor
Borrower will be designated by Lender or the Borrower; and (vi) if a Fannie
Mae Investment Security is offered for use as the Substitute Collateral, the
Defeasance Notice shall also include the amount of the Defeasance Commitment
Fee.  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any applicable Defeasance Commitment fee must be
  paid by the Borrower and received by Lender no later than the date and time
  when Lender receives the Defeasance Notice from the Borrower.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (2)          Confirmation.
  After Lender has confirmed that the Defeasance is then permitted as provided
  in Section 3.10(d), and has confirmed that the terms of the Defeasance Notice
  are reasonably acceptable to Lender, Lender shall, with reasonable
  promptness, notify the Borrower of such confirmation by signing the
  Defeasance Notice, attaching the Annual Yields for the Mortgage Payments
  beginning on the first day of the second calendar month after the Defeasance
  Closing Date and ending on the Stated Maturity Date (if a Fannie Mae
  Investment Security is offered as Substitute Collateral) and transmitting the
  signed Defeasance Notice to the Borrower pursuant to Section 3.10(g)(4). If,
  after Lender has notified the Borrower of its confirmation in accordance with
  the foregoing, Lender does not receive the Defeasance Commitment Fee within
  five (5) Business Days after the Defeasance Notice Effective Date, then the
  Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice
  shall terminate.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (3)          Substitute
  Collateral. On or before the Defeasance Closing Date, the Borrower shall
  deliver to Lender a pledge and security agreement, in form and substance
  satisfactory to Lender in its sole discretion (the “Pledge Agreement”), creating a first
  priority perfected security interest in favor of

  



-30-







	
   

  	
   

  	
   

  
	
   

  	
   

  	
   Lender in substitute collateral constituting an
Investment Security (the “Substitute Collateral”). The Pledge
Agreement shall provide the Borrower’s authorization and direction that all
interest on, principal of and other amounts payable with respect to the
Substitute Collateral shall be paid directly to Lender to be applied to
Mortgage Payments due under the Fixed Facility Note subject to Defeasance. If
the Substitute Collateral is issued in a certificated form and the Borrower
has possession of the certificate, the certificate shall be endorsed (either
on the certificate or on a separate writing attached thereto) by the Borrower
as directed by Lender and delivered to Lender. If the Substitute Collateral
is issued in an uncertificated form, or in a certificated form but the Borrower
does not have possession of the certificate, the Borrower shall execute and
deliver to Lender all documents and instruments required by Lender to create
in Lender’s favor a first priority perfected security interest in such
Substitute Collateral, including a securities account control agreement or
any other instrument or document required to perfect a security interest in
each Substitute Collateral. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (4)          Closing
  Documents. The Borrower shall deliver to Lender on or before the
  Defeasance Closing Date the documents described in Section 3.10(b).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (5)          Amounts
  Payable by the Borrower. On or before the Defeasance Closing Date, the
  Borrower shall pay to Lender an amount equal to the sum of:

  






	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (A)

  	
  the Next Scheduled P&I Payment;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (B)

  	
  all other sums then due and payable under the Fixed
  Facility Note subject to Defeasance, the Security Instruments related to the
  Mortgaged Properties to be released; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (C)

  	
  all reasonable costs and expenses incurred by Lender
  or Servicer in connection with the Defeasance, including the fees and
  disbursements of Lender’s or Servicer’s legal counsel.

  






	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (6)          Defeasance
  Deposit. If a Fannie Mae Investment Security will be the Substitute Collateral,
  then, on or before 3:00 p.m., Eastern Standard Time, on the Defeasance
  Closing Date, the Borrower shall pay the Defeasance Deposit (reduced by the
  Defeasance Commitment Fee) to Lender to be used by Lender to purchase the
  Fannie Mae Investment Security as the Borrower’s agent.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            
  (7)          Covenants,
  Representations and Warranties. On the Defeasance Closing Date, all of
  the covenants of the Borrower set forth in Articles XIII, XIV and XV of this
  Agreement and all of the representations and warranties of the Borrower set
  forth in Article XII of this Agreement are true and correct in all material
  respects.

  



-31-







	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (8)          Geographical
  Diversification. If, as a result of the Defeasance, Lender determines
  that the geographical diversification of the Collateral Pool is compromised
  (whether or not the Geographical Diversification Requirement is met), Lender
  may require that the Borrower add or substitute Multifamily Residential
  Properties to the Collateral Pool in a number and having a valuation required
  to restore the Geographical Diversification of the Collateral Pool to a level
  at least as diverse as before the Defeasance.

  
	
   

  	
   

  	
   

  
	
   

  	
            (b)          Closing
  Documents. The documents required to be delivered to Lender on or before
  the Defeasance Closing Date pursuant to Section 3.10(a)(4) are:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (1)          an
  opinion of counsel for the Borrower, in form and substance satisfactory to
  Lender, to the effect that Lender has a valid and perfected lien and security
  interest of first priority in the Substitute Collateral and the principal and
  interest payable thereunder;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (2)          an
  opinion of counsel for the Borrower, in form and substance satisfactory to
  Lender, that the Defeasance, including both Borrowers granting to Lender of a
  lien and security interest in the Substitute Collateral and the assignment
  and assumption by Successor Borrower, and each of them, when considered in
  combination and separately, are not subject to avoidance under any applicable
  federal or state laws, including Sections 547 and 548 of the U.S. Bankruptcy
  Code;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (3)          if
  a Fannie Mae Investment Security is not used as Substitute Collateral, and
  unless waived by Lender, a certificate in form and substance satisfactory to
  Lender, issued by an independent certified public accountant, or financial
  institution, approved by Lender, to the effect that the Substitute Collateral
  will generate the Scheduled Defeasance Payments;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (4)          unless
  waived by Lender, an opinion of counsel for the Borrower in form and
  substance satisfactory to Lender, that the Defeasance will not result in a
  “sale or exchange” of any Fixed Facility Note within the meaning of Section
  1001(c) of the Internal Revenue Code and the temporary and final regulations
  promulgated thereunder;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (5)          such
  other opinions, certificates, documents or instruments as Lender may
  reasonably request; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (6)          three
  counterparts of the executed Assignment and Assumption Agreement described in
  Section 3.10(e).

  
	
   

  	
   

  	
   

  
	
   

  	
            (c)          Release.
  Upon the Borrower’s compliance with the requirements of Sections 3.10(a)(1)
  through (6), the Mortgaged Properties shall be released from the lien of the
  Security Instruments (and all collateral derived from such Mortgaged
  Properties, including assignments of leases, fixture filings and other
  documents and instruments evidencing a lien or security interest in the
  Borrower’s assets [except the Substitute Collateral] shall be released).
  Lender shall, with reasonable promptness, execute and 

  



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  deliver to the Borrower, at the Borrower’s cost and
  expense, any additional documents reasonably requested by the Borrower in
  order to evidence or confirm the release of Lender’s liens and security
  interests described in the immediately preceding sentence.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
            (d)          Defeasance
  Not Allowed. The Borrower shall not have the right to obtain Defeasance
  at any of the following times:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (1)          before
  the third anniversary of the date of the relevant Fixed Facility Note;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (2)          after
  the expiration of the Defeasance Period; or

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (3)          after
  Lender has accelerated the maturity of the unpaid principal balance of,
  accrued interest on, and other amounts payable under, any Note pursuant to
  Paragraph 6 of such Note.

  
	
   

  	
   

  	
   

  
	
   

  	
  
          (e)          Assignment
and Assumption. Upon the Borrower’s compliance with the requirements of
Section 3.10(a), the Borrower shall assign all its obligations and rights
under the relevant Fixed Facility Note, together with the Substitute
Collateral, to a successor entity (the “Successor Borrower”)
designated by Lender or, if not so designated by Lender, designated by the
Borrower and acceptable to Lender in its sole discretion. The Borrower and
Successor Borrower shall execute and deliver to Lender an assignment and
assumption agreement on a form provided by Lender (the “Assignment and
Assumption Agreement”). The Assignment and Assumption Agreement shall
provide for (i) the transfer and assignment by the Borrower to Successor
Borrower of the Substitute Collateral, subject to the lien and security
interest in favor of Lender, (ii) the assumption by Successor Borrower of all
liabilities and obligations of the Borrower under the relevant Fixed Facility
Note, and (iii) the release by Lender of the Borrower from all liabilities
and obligations under the relevant Fixed Facility Note and all Obligations related
thereto. Lender shall, at the Borrower’s request and expense, execute and
deliver releases, reconveyances and security interest terminations with
respect to the released Mortgage Properties and all other collateral held by
Lender (except the Defeasance Deposit). The Assignment and Assumption
Agreement shall be executed by Lender with a counterpart to be returned by
Lender to the Borrower and Successor Borrower thereafter; provided, however,
in all events that it shall not be a condition of Defeasance that the
Assignment and Assumption Agreement be executed by Lender, or any Successor
Borrower that is designated by Lender.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
            (f)          Agent.
  If the Defeasance Notice provides that Lender will make available a Fannie
  Mae Investment Security for purchase by the Borrower for use as the
  Substitute Collateral, the Borrower hereby authorizes Lender to use, and
  appoints Lender as its agent and attorney-in-fact for the purpose of using,
  the Defeasance Deposit (including any portion thereof that constitutes the
  Defeasance Commitment Fee) to purchase a Fannie Mae Investment Security.

  
	
   

  	
   

  	
   

  
	
   

  	
            (g)          Administrative
  Provisions.

  



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            (1)          Fannie
  Mae Security Liquidated Damages. If the Borrower timely pays the
  Defeasance Commitment Fee, and Lender and the Borrower timely transmits a
  signed facsimile copy of the Defeasance Notice pursuant to Section
  3.10(a)(2), but the Borrower fails to perform its other obligations under
  Sections 3.10(a) and Section 3.10(e), Lender shall have the right to retain
  the Defeasance Commitment Fee as liquidated damages for the Borrower’s
  default, as Lender’s sole and exclusive remedy, and, except as provided in
  Section 3.10(g)(2), the Borrower shall be released from all further obligations
  under this Section 3.10. The Borrower acknowledges that, from and after the
  date on which Lender has executed the Defeasance Notice under Section
  3.10(a)(2) and the Borrower has delivered the Defeasance Commitment Fee,
  Lender will incur financing costs in arranging and preparing for the purchase
  of the Substitute Collateral and in arranging and preparing for the release
  of the Mortgaged Properties from the lien of the Security Instruments in
  reliance on the executed Defeasance Notice. The Borrower agrees that the
  Defeasance Commitment Fee represents a fair and reasonable estimate, taking
  into account all circumstances existing on the date of this Agreement, of the
  damages Lender will incur by reason of the Borrower’s default.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (2)          Third
  Party Costs. In the event that the Defeasance is not consummated on the
  Defeasance Closing Date for any reason, the Borrower agrees to reimburse
  Lender and Servicer for all reasonable third party costs and expenses (other
  than financing costs covered by Section 4.0l(g)(1) above), including
  attorneys’ fees and expenses, incurred by Lender in reliance on the executed
  Defeasance Notice, within 10 Business Days after the Borrower receives a
  written demand for payment, accompanied by a statement, in reasonable detail,
  of Lender’s and Servicer’s third party costs and expenses.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (3)          Payments.
  All payments required to be made by the Borrower to Lender or Servicer
  pursuant to this Section 3.10 shall be made by wire transfer of immediately
  available finds to the account(s) designated by Lender or Servicer, as the
  case may be, in the Defeasance Notice.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (4)          Notice.
  The Defeasance Notice delivered pursuant to this Section 4.0l(g)(4) shall be
  in writing and shall be 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 (or shall be sent
  by any distribution media, whether currently existing or hereafter developed,
  including electronic mail and internet distribution, as approved by Lender).
  Any notice so sent addressed to the parties at their respective addresses designated
  in the Defeasance Notice pursuant to Section 3.10(a), shall be deemed to have
  been received on the date and time indicated on the transmission report of
  recipient. To be effective, the Borrower must send the Defeasance Notice (as
  described above) so that Lender receives the Defeasance Notice no earlier
  than 11:00 a.m. and no later than 3:00 p.m. Eastern Standard Time on a
  Business Day.

  



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            (h)          Definitions.
  For purposes of this Section 3.10, the following terms shall have the
  following meanings:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (1)          The
  term “Annual Yield” means the yield for the theoretical zero coupon
  U.S. Treasury Security as calculated from the current “on-the-run” U.S.
  Treasury yield curve with a term to maturity that most closely matches the
  Applicable Defeasance Term for the Mortgage Payment, as published by Fannie
  Mae on MORNET® (or in an alternative electronic format) at 2:00 p.m. Eastern
  Standard Time on the Business Day that Lender receives the Defeasance Notice
  in accordance with Section 3.10(g)(4). If the publication of yields on
  MORNET® is unavailable, Lender shall determine yields from another source
  reasonably determined by Lender.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (2)          The
  term “Applicable Defeasance Term” means, in the case of each Mortgage
  Payment, the number of calendar months, based on a year containing 12
  calendar months with 30 days each, in the period beginning on the first day
  of the first calendar month after the Defeasance Closing Date to the date on
  which such Mortgage Payment is due and payable.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (3)          The
  term “Defeasance” means the transaction in which all (but not less
  than all) of the Mortgaged Properties are released from the lien of the
  Security Instruments and Lender receives, as substitute collateral, a valid
  and perfected lien and security interest of first priority in the Substitute
  Collateral and the principal and interest payable thereunder.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (4)          The
  term “Defeasance Commitment Fee” means the amount specified in the
  Defeasance Notice as the Borrower’s good faith deposit to ensure performance
  of its obligations under this Section, which shall equal two percent (2%) of
  the aggregate unpaid principal balance of the Fixed Facility Note subject to
  Defeasance as of the Defeasance Notice Effective Date, if the Successor
  Borrower is designated by the Borrower under Section 3.10(e), or one percent
  (1%) of the aggregate unpaid principal balance of the Fixed Facility Note
  subject to Defeasance as of the Defeasance Notice Effective Date if the
  Successor Borrower is designated by Lender under Section 3.10(e). No
  Defeasance Commitment Fee will be applicable if U.S. Treasury Securities are
  specified in the Defeasance Notice as the applicable Investment Security.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (5)          The
  term “Defeasance Deposit” means an amount equal to the sum of the present
  value of each Mortgage Payment that becomes due and payable during the period
  beginning on the first day of the second calendar month after the Defeasance
  Closing Date and ending on the Stated Maturity Date, where the present value
  of each Mortgage Payment is determined using the following formula:

  



the amount of the
Mortgage Payment

(1 + (the Annual Yield/12))n


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  For this purpose, the
  last Mortgage Payment due and payable on the Stated Maturity Date shall
  include the amounts that would constitute the unpaid principal balance of the
  Fixed Facility Note subject to Defeasance on the Stated Maturity Date if all
  prior Mortgage Payments were paid on their due dates and “n” shall equal the
  Applicable Defeasance Term.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (6)          The
  term “Defeasance Period” means the period beginning on the earliest
  permitted date determined under Section 3.10(d)(l) and ending on the 90th day
  before the Stated Maturity Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (7)          The
  term “Defeasance Notice Effective Date” means the date on which Lender
  provides confirmation of the Defeasance Notice pursuant to Section
  3.10(a)(2).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (8)          The
  term “Fannie Mae Investment Security” means any bond, debenture, note,
  participation certificate or other similar obligation issued by Fannie Mae in
  connection with the Defeasance which provides for Scheduled Defeasance
  Payments beginning in the second calendar month after the Defeasance Closing
  Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (9)          The
  term “Investment Security” means:

  






	
   

  	
   

  	
   

  
	
   

  	
                                (A)          If
  offered by Lender pursuant to the Defeasance Notice, a Fannie Mae Investment
  Security purchased in the manner described in Sections 3.10(a)(6) and
  3.10(f), and

  
	
   

  	
   

  	
   

  
	
   

  	
                                (B)          If
  no Fannie Mae Investment Security is offered by Lender pursuant to the
  Defeasance Notice, U.S. Treasury Securities.

  






	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (10)          The
  term “Mortgage Payment” means the amount of each regularly scheduled
  monthly payment of principal and interest due and payable under the Fixed
  Facility Note subject to Defeasance during the period beginning on the first
  day of the second calendar month after the Defeasance Closing Date and ending
  on the Stated Maturity Date, and the amount that would constitute the
  aggregate unpaid principal balance of the Fixed Facility Note subject to
  Defeasance on the Stated Maturity Date if all prior Mortgage Payments were
  paid on their due dates.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (11)          The
  term “Next Scheduled P&I Payment” means an amount equal to the
  monthly installment of principal and interest due under the Fixed Facility
  Note subject to Defeasance on the first day of the first calendar month after
  the Defeasance Closing Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (12)          The
  term “Scheduled Defeasance Payments” means payments prior and as close
  as possible to (but in no event later than) the successive scheduled dates on
  which Mortgage Payments are required to be paid under the Fixed Facility Note
  subject to Defeasance and in amounts equal to or greater than 

  



-36-







	
   

  	
   

  	
   

  
	
   

  	
   

  	
  the scheduled
  Mortgage Payments due and payable on such dates under the Fixed Facility Note
  subject to Defeasance.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (13)          The
  term “Stated Maturity Date” means the Maturity Date specified in the
  Fixed Facility Note subject to Defeasance determined without regard to
  Lender’s exercise of any right of acceleration of the Fixed Facility Note
  subject to Defeasance.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (14)          The
  term “U.S. Treasury Securities” means direct, non-callable and
  non-redeemable obligations of the United States of America which provided for
  Scheduled Defeasance Payments beginning in the second calendar month after
  the Defeasance Closing Date.

  



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 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


-37-






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 executes and delivers 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 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.


-38-






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;


               (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


-39-






               (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. The Lender shall
determine the Allocable Facility Amount and Valuation for each Initial
Mortgaged Property on the Initial Closing Date. 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 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 Multifamily Residential
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.


-40-







               (a)          Request.
The Borrower may, not more than eight (8) times per Calendar Year, deliver a
written request (“Collateral Addition Request”) to the Lender, in the
form attached as Exhibit Q 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 proposed Additional Mortgaged Property
required by the form attached as Exhibit R to this Agreement (“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 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 proposed 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


-41-






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 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.



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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
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 


-43-






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. 


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


-44-






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; 


               (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, in the form attached as Exhibit U to this
Agreement, pursuant to which the Borrower confirms that its 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; and


               (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 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


-45-






Pool in accordance with the provisions of this Section
7.04 (“Substituted Mortgaged Property”). 


               (b)          Procedure
for Substituting Collateral.


	
   

  	
   

  	
   

  
	
   

  	
  
          (i)          Request.
The Borrower 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 shall specify the proposed date on which
  the 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 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 whether or not the proposed Substituted Mortgaged

  



-46-







	
   

  	
   

  
	
   

  	
  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 shall notify the Lender whether or not they elect to cause such
  substitution to occur. If the Borrower fails 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
  replacement of the proposed Collateral Release Property, the Borrower timely
  elects 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’s election (or on such other date to which the Borrower 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 shall have waived its
  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 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 

  


-47-






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  immediately
  due and payable by the Borrower 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;

  
	
   

  	
   

  	
   

  
	
   

  	
            (iii)          With
  respect to the release of the proposed Collateral Release Property, the
  Borrower 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 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, 

  



-48-







	
   

  	
   

  	
   

  
	
   

  	
  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 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 the addition of Collateral to the
Collateral Pool and/or increases in the value of the Mortgaged Properties. The
Borrower’s right to increase the Commitment 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


-49-






Properties identified on Exhibit HH (the “DUS
Properties”), to increase the Commitment by an additional $163,392,000 (to
a maximum Commitment of $600,000,000). Borrower acknowledges 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 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)          [Intentionally
  Deleted]; 

  
	
   

  	
   

  
	
   

  	
            (v)          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).


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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;


                    (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:


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                      (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 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.



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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 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 from its 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)          If
applicable, Defeasance by the Borrower, in accordance with the provisions of
Section 3.10 of this Agreement, with respect to all Fixed Facility Notes
Outstanding on the Closing Date;


                    (c)          Payment
of the Facility Termination Fee; and


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                    (d)          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 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 the Lender that the Borrower is not 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 the Borrower 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


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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)          [Intentionally
Deleted]


                    (i)          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.

  



                    (j)          Covenants.
Except in connection with a Credit Facility Termination Request, the Borrower
is 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.


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, a 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:


                    (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, as to the due organization and
qualification of the Borrower, 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, as the case may be, in form and substance
satisfactory to the Lender in all respects:


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                    (a)          A
favorable opinion of local counsel to the Borrower 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’s 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 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. The Borrower hereby
represents and warrants to the Lender 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 is qualified to transact business and is in good
  standing in the State in which it is 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 to
  perform the Obligations under this Agreement and the 

  



-56-






	
   

  	
   

  
	
   

  	
  other Loan
  Documents. The Borrower is qualified to transact business and is in good standing
  in each State in which it owns a Mortgaged Property.

  
	
   

  	
   

  
	
   

  	
                      (2)          The
  Borrower’s principal place of business, principal office and office where it
  keeps its books and records as to the Collateral is located at the address set
  out in Section 23.08.

  



                    (b)          Power
and Authority. The Borrower has the requisite power and authority (i) to
own its properties and to carry on its 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, 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 as a condition to the
valid execution, delivery and performance by the Borrower 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 and constitute the
legal, valid and binding obligations of the Borrower, enforceable against the
Borrower 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.


                    (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, any of the Mortgaged Properties or any other
  portion of the Collateral or other assets of the Borrower, or any judgment or
  order applicable to the Borrower or to which the Borrower, any of the
  Mortgaged Properties or other assets of the Borrower is 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’s Organizational Documents, any indenture, existing agreement or
  other instrument to which the Borrower is a party or to which the Borrower,
  any of the Mortgaged Properties or any other portion of the Collateral or
  other assets of the Borrower is subject;

  



-57-






	
   

  	
   

  
	
   

  	
                      (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, 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, 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, which, if decided adversely to the Borrower, would have, or may
reasonably be expected to have, a Material Adverse Effect. The Borrower is not
in default with respect to any order of any Governmental Authority.


                    (g)          Solvency.
The Borrower 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 will not be left with an
unreasonably small amount of capital with which to engage in its business or
undertakings, nor will the Borrower has incurred, have intended to incur, or
believe that it has incurred, debts beyond its ability to pay such debts as
they mature. The Borrower 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’s knowledge, threatened
bankruptcy, reorganization, receivership, insolvency or like proceeding,
whether voluntary or involuntary, affecting the Borrower or any of the
Mortgaged Properties and (ii) has been no assertion or exercise of
jurisdiction over the Borrower or any of the Mortgaged Properties by any court
empowered to exercise bankruptcy powers.


                    (h)          No
Contractual Defaults. There are no defaults by the Borrower or, to the
knowledge of the Borrower, by any other Person under any contract to which the
Borrower 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 nor, to the knowledge of the
Borrower, 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 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 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.



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          1.          The
Borrower is not an “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 Borrower 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.          The
Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA.


          3.          The
Borrower and transactions with the Borrower 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.


                    (k)          Financial
Information. The financial projections relating to the Borrower 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, in good faith at the time
of preparation, to be reasonable and the Borrower 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 which
have been furnished to the Lender are complete and accurate in all material
respects and present fairly the financial condition of the Borrower, 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
other than transactions in the ordinary course of business. The Borrower 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 in connection with this Agreement or any other Loan


-59-






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 and the statements, information
and descriptions contained in the Borrower’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 delivered as of the Closing Date
are reasonable and based on the best information available to the Borrower.


                    (m)          No
Conflicts of Interest. To the best knowledge of the Borrower, 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 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.


                    (o)          Governmental
Orders. The Borrower 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.


                    (p)          No
Reliance. The Borrower 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 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.


-60-






                    (r)          Contracts
with Affiliates. Except as otherwise approved in writing by the Lender, the
Borrower has not entered into and is not a party to any contract, lease or
other agreement with any Affiliate of the Borrower 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 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. The Borrower hereby
represents and warrants to the Lender as follows with respect to each of the
Mortgaged Properties:


                    (a)          Title.
The Borrower 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 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 has 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 contests 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 has no knowledge
of any new proposed Tax, levy or other governmental or private assessment


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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 nor, to the knowledge of the Borrower, 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 is the Borrower
otherwise aware of any such pending actions or proceedings.


                    (d)          Leases.
The Borrower has 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 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 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 has 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 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 Borrower
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 and, to the knowledge of the Borrower, 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 which
remains uncured has been sent by any tenant under any such Lease, other than


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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 has 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 any Lease or other agreement
affecting such Mortgaged Property. The Borrower, 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 the Borrower’s Mortgaged
Property is added to the Collateral Pool, or otherwise disclosed in writing by
the Borrower to the


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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 Borrower, latent or otherwise)
and the Borrower 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 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.


ARTICLE XIII

AFFIRMATIVE COVENANTS OF THE BORROWER


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


SECTION 13.01 Compliance
with Agreements. The Borrower 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’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 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 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.


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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 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’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 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.


                    (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.


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                    (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 the Borrower, 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
the Borrower, or any of its Affiliates, with the Securities and Exchange
Commission or other Governmental Authorities, and (c) all statements made
available generally by the Borrower, 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 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 shall only be
required to deliver such reports and management letters to the extent that they
relate to the Borrower 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


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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 the
Borrower’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 pursuant to the Loan
Documents or requested by the Lender with respect to the Borrower’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.


SECTION 13.05 Certificate
of Compliance. The Borrower 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 the
Borrower 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 Borrower 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 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 shall permit the Lender:


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


                    (b)          to
discuss the Borrower’s affairs, finances and accounts with the Borrower’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;


                    (d)          to
discuss the Borrower’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.


SECTION 13.08 Inform
the Lender of Material Events. The Borrower 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 has actual knowledge:


                    (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 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
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 that (A) the Borrower is being
placed under regulatory supervision, (B) any license, Permit, charter,
membership or registration material to the conduct of the Borrower’s business
or the Mortgaged Properties is to be suspended or revoked or (C) the Borrower
is to cease and desist any practice, procedure or


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policy
employed by the Borrower, 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 the
Borrower;


                    (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 delivered to the Lender pursuant
to Section 13.04;


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


                    (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 the Borrower; 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 the Borrower to pay when due or within any applicable grace
period any Indebtedness of the Borrower, or (iii) any Indebtedness of the
Borrower 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 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.


SECTION 13.11 Compliance
with Applicable Laws. The Borrower 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


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any Mortgaged
Property. The Borrower 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 Borrower 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 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 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 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 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
upon the Borrower and without releasing the Borrower 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 or an assignment by the Borrower for the benefit of
their respective creditors, the Borrower 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 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


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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
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 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 as part of the
Borrower’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 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
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 from paying the Loan Document Taxes to or for
the Lender, the Borrower shall enter into such further instruments as may be
permitted by law to obligate the Borrower to pay such Loan Document Taxes.


SECTION 13.17 Further
Assurances. The Borrower, 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 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.


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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.


                    (a)          Prohibition
on Transfers. Subject to paragraph (b) of this Section 13.21, the Borrower
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 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.

  
	
   

  	
   

  
	
   

  	
                      (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
  causes 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 pays to
  Lender, on demand, all reasonable costs and expenses incurred by Lender in
  connection with reviewing Borrower’s 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; 

  



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  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,
  including, without limitation, the conversion or exchange of limited
  partnership interests in Borrower 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 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.

  
	
   

  	
   

  
	
   

  	
                      (ix)          A
  merger with or acquisition of another entity by Borrower, provided that (A)
  Borrower is 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 has 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 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,
  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;

  



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            (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 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 shall give the Lender notice of any change in the identity of Senior
Management.


                    (b)          Within
30 Business Days after receipt of the Borrower’s 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. 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’s
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 first receives the Lender’s termination notice.


                    (c)          If
the Lender exercises its termination right pursuant to subsection (b), the
Borrower shall have a period of 120 days, commencing with the date on which the
Borrower receives the Lender’s termination notice, to request that the Lender
rescind its termination notice. The Borrower may include in its request any
undertakings which it is willing to make in order to obtain such a rescission.
The Lender shall give the Borrower notice of its acceptance or rejection of the
Borrower’s request within 30 Business Days after the Borrower makes the
request. If the Lender accepts the request, the Lender shall give the Borrower
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 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
satisfies the Geographical Diversification Requirement..


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


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ARTICLE XIV

NEGATIVE COVENANTS OF THE BORROWER


The Borrower,
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. The Borrower shall not:


                    (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 shall not take any action
which could reasonably be expected to have any Material Adverse Effect.


SECTION 14.03 Zoning. The Borrower 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 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 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 Southland Station, Phase II and located in Houston
County, Georgia is part of the Collateral Pool, the Borrower shall not sell or
otherwise transfer any Ownership Interest in the entity owning all or any part
of the property commonly known as Southland Station, Phase I and located in
Houston County, Georgia (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


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Agreement. For
so long as either of the Mortgaged Properties commonly known as Three Oaks I or
Three Oaks II each located in Valdosta, Georgia, 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). For so long as either of the Mortgaged Properties commonly known as
Wildwood I or Wildwood II each located in Thomasville, Georgia, 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).


SECTION 14.06 Indebtedness. The Borrower 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 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 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 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 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 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 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


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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.


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


The Borrower
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 and its 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

  



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  (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--

  
	
   

  	
   

  
	
   

  	
                                (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 and
its 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 and its 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 the Borrower and its Subsidiaries as of such
date (including the Total Indebtedness of the Borrower as of such date and the
portion of any indebtedness of any joint venture in which the Borrower or any
Subsidiary thereof is a venturer attributable to the Borrower or its
Subsidiary).


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                    “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;


                    (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 or its
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 and its Subsidiaries; and


                    (b)          the
portion of the up-front costs and expenses for Rate Contracts entered into by
the Borrower and its 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 and its 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 or its Subsidiaries to
any Subsidiary, and incurred or assumed for the purpose of capitalizing a
Subsidiary of the Borrower.


                    “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


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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.


                    “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
or its Subsidiaries to other lenders, as indicated in the line item for
“restricted cash” in the Borrower’s 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.


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                    “Unconsolidated
Partnership” means any partnership or joint venture (a) in which the
Borrower or any Subsidiary of the Borrower 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 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
Borrower; 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 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 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 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 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.


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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).


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 to no longer pay the Rate
Preservation Fee, which election shall be irrevocably terminated by at least 30
days’ written notice of such termination by Borrower to Lender. 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%. 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. The Borrower shall pay the Expansion
Origination Fee on or before the Closing Date for the Credit Facility Expansion
Request.


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


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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.


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 Addition Fee, pursuant to Section 6.03(b), in connection with the
addition of an Additional Mortgaged Property to the Collateral Pool pursuant to
Article VI; 


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                    (b)      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;


                    (c)      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;


                    (d)      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;


                    (e)      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


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


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


                    (c)      the
failure by the Borrower 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, 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 the
Borrower 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, including but not limited to Indebtedness related to the
Other Credit Agreement, in an aggregate amount of $1,000,000 of either Borrower
or


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assumed by
either Borrower (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


                    (f)      (i)
The Borrower 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 the Borrower 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 the Borrower 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, or of all or a substantial
part of the property, domestic or foreign, of the Borrower 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 (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 the Borrower, 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 the Borrower seeking to establish the invalidity
or unenforceability hereof or thereof, or the Borrower shall deny that it has
any further liability or obligation hereunder or thereunder; or


                    (h)     (i)
the execution by the Borrower 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 free from encumbrances, or (iii) if the
Borrower does 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 claims title to such materials, fixtures, or articles; or


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


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


                    (k)     any
judgment against either Borrower, any attachment or other levy against any
portion of either Borrower’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 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 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 the Borrower 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):


                    (a)          by
written notice to the Borrower, 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 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 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.


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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. 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.


SECTION 18.03 The
Lender’s Right to Protect Collateral and Perform Covenants and Other
Obligations. If the Borrower 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 and the curing of any default of the Borrower 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 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 the Borrower under the Loan Documents
shall be applied by the Lender against


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any amounts
then due and payable under the Loan Documents by the Borrower, in any order of
priority that the Lender may determine and (ii) the Borrower shall have no
right to determine the order of priority or the allocation of any payment it
makes to the Lender.


ARTICLE XIX

RIGHTS OF FANNIE MAE


SECTION 19.01 Special
Pool Purchase Contract. The Borrower
acknowledges 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 acknowledges and consents 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 hereby acknowledges 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 acknowledges that the Security
Instruments provide for the release of the Collateral under Articles VII and X.
Accordingly, the Borrower 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 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
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.


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SECTION 19.05 Fannie
Mae and Lender Fees and Expenses. The Borrower agrees 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.


SECTION 19.06 Third-Party
Beneficiary. The Borrower hereby acknowledges and agrees
that Fannie Mae is a third party beneficiary of all of the representations,
warranties and covenants made by any Borrower 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.


ARTICLE XX

INSURANCE, REAL ESTATE TAXES

AND REPLACEMENT RESERVES


SECTION 20.01 Insurance
and Real Estate Taxes. The Borrower 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 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


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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 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


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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, 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.


                    (a)          Full
Recourse. Except as provided in Section 22.01(b), each Borrower is 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 the Borrower 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;

  



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                    (c)          Exceptions
to Limits on Personal Liability. Upon termination of personal liability of the
Borrower pursuant to paragraph (b) of this Section 22.01, the Borrower 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 to pay to the 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 from tenants then in residence; (2)
failure of the Borrower to apply all insurance proceeds and condemnation
proceeds as required by the Security Instrument encumbering the Mortgaged
Property; (3) failure of the Borrower 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 the
Borrower or any officer, director, partner, member or employee of the Borrower
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 will not be personally liable (i) to the extent that the Borrower
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 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 pursuant to paragraph (b) of this Section
22.01, the Borrower 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’s 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 shall release the Borrower 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 in connection with the
Transfer.


                    (f)          Miscellaneous.
To the extent that the Borrower has personal liability under this Section, the
Lender may exercise its rights against the Borrower 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 the Borrower as required or
permitted by the Loan Documents prior to the occurrence of an Event of Default,
or (2) are owned by the Borrower and which the Borrower was unable to apply as


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required or
permitted by the Loan Documents because of a bankruptcy, receivership, or
similar judicial proceeding.


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 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


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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 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 THE
BORROWER UNDER THE NOTES, AND THE BORROWER 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 AGREES
THAT ANY CONTROVERSY ARISING UNDER OR IN RELATION TO THE NOTES, THE SECURITY
DOCUMENTS OR ANY OTHER LOAN DOCUMENT SHALL


-94-






BE, EXCEPT AS
OTHERWISE PROVIDED HEREIN, LITIGATED IN THE DISTRICT OF COLUMBIA. THE LOCAL AND
FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN THE DISTRICT OF COLUMBIA
SHALL, EXCEPT AS OTHERWISE PROVIDED HEREIN, HAVE JURISDICTION OVER ALL
CONTROVERSIES WHICH 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. THE BORROWER 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, 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 AND THE LENDER AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY THE
BORROWER TO PERSONAL JURISDICTION WITHIN THE DISTRICT OF COLUMBIA. THE BORROWER
(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,
THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER
(INCLUDING, BUT NOT LIMITED TO, LENDER’S COUNSEL) HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, TO BORROWER 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 UPON CONSULTATION WITH INDEPENDENT LEGAL
COUNSEL SELECTED BY THE BORROWER’S 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.


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                (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:


	
   

  	
   

  	
   

  	
   

  
	
   

  	
                      (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 the
  Borrower:

  
	
   

  	
   

  
	
   

  	
   

  	
  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

  



-96-







	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2200 Ross
  Avenue

  
	
   

  	
   

  	
  Suite 4900 E

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Attention: 

  	
  Asset
  Management Department

  
	
   

  	
   

  	
  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


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date so
refused or rejected, as conclusively established by the records of the U.S.
Postal Service, the courier service or facsimile.


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 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 shall provide,
or cause to be provided to the Lender, at their cost and expense, such
documentation or information. The Borrower 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 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. The Borrower shall not
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’s
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


-98-






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 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 must be in writing
to be effective.


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


[THE REMAINDER OF THIS PAGE IS LEFT
INTENTIONALLY BLANK]


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          IN
WITNESS WHEREOF, the parties hereto have executed this Agreement 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

  



-100-










	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lender 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Sharon D. Singleton

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  



-101-






SCHEDULE I


SUMMARY OF CREDIT FACILITY STRUCTURE


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


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facility Fees 

  	
   

  	
  Standby Fee

  	
   

  	
  Facility Termination Fee 

  
	
  Initial Commitment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
  57
  bps (1)

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $
  183,372,000

  	
   

  	
  67
  bps

  	
   

  	
  15
  bps

  	
   

  	
  18
  bps

  
	
  Total

  	
   

  	
  $
  183,372,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  through
  Variable Facility Termination Date as calculated in Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Original Expanded 

  Commitment

  	
   

  	
  Amounts
  above

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $
  183,372,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $
  183,372,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Up
  to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $
  413,374,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $
  413,374,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net
  Amount Equal to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
  65
  bps (1) (2)

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $
  230,002,000

  	
   

  	
  72
  bps

  	
   

  	
  15
  bps

  	
   

  	
  18
  bps

  
	
  Total

  	
   

  	
  $
  230,002,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  through
  Variable Facility Termination Date as calculated in Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amended and Restated 

  Commitment (4)

  	
   

  	
  Amounts
  above

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $413,374,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $413,374,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Up
  to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $451,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $451,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net
  Amount Equal to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
  50
  bps (1) (3)

  	
   

  	
   

  	
   

  	
   

  
	
  Variable

  	
   

  	
  $37,626,000
  

  	
   

  	
  60
  bps 

  	
   

  	
  15
  bps

  	
   

  	
  18
  bps

  
	
  Total

  	
   

  	
  $37,626,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  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 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 $600 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

  	
   

  	
  N/A

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
 


	
  Future Fixed Advances (i) drawn  after 10/31/2004 and prior to 1/1/2006 or
  (ii) drawn 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 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-1






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 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.


I-3








	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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

  	
   

  	
   

  






I-4









SECOND AMENDED AND
RESTATED MASTER CREDIT FACILITY AGREEMENT

(MAA II)


among


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

a Tennessee corporation, and


(ii) MID- AMERICA
APARTMENTS, LP,

a Tennessee limited partnership


and


PRUDENTIAL
MULTIFAMILY MORTGAGE, INC.,

a Delaware corporation,


dated as of


March 30, 2004






(MAA II)


TABLE OF CONTENTS


	
 

	
 

	
 


	
 

	
 

	
Page 


	
 

	
 

	 


	
RECITALS

	
1

	
 


	
ARTICLE I

	
2

	
 


	
ARTICLE II

	
23

	
 


	
 

	
SECTION 2.01 Variable Facility Commitment

	
23


	
 

	
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 2.08 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


	
 

	
SECTION 3.10 Defeasance

	
29


	
ARTICLE IV

	
37

	
 


	
 

	
SECTION 4.01 Rate Setting for an Advance

	
37


	
 

	
SECTION 4.02 Advance Confirmation Instrument for
  Variable Advances

	
38


	
 

	
SECTION 4.03 Breakage and other Costs

	
38


	
ARTICLE V

	
38

	
 


	
 

	
SECTION 5.01 Initial Advance

	
38


	
 

	
SECTION 5.02 Future Advances

	
39


	
 

	
SECTION 5.03 Conditions Precedent to Future Advances

	
39


	
 

	
SECTION 5.04 Determination of Allocable Facility
  Amount and Valuations

	
40


	
ARTICLE VI

	
40

	
 


	
 

	
SECTION 6.01 Right to Add Collateral

	
40


	
 

	
SECTION 6.02 Procedure for Adding Collateral

	
40


	
 

	
SECTION 6.03 Conditions Precedent to Addition of an
  Additional Mortgaged Property to the Collateral Pool

	
42


	
ARTICLE VII

	
42

	
 


	
 

	
SECTION 7.01 Right to Obtain Releases of Collateral

	
43


	
	




A-1







	
 

	
 

	
 


	
 

	
SECTION 7.02 Procedure for Obtaining Releases of
  Collateral

	
43


	
 

	
SECTION 7.03 Conditions Precedent to Release of
  Collateral Release Property from the Collateral

	
44


	
 

	
SECTION 7.04 Substitutions

	
45


	
ARTICLE VIII

	
49

	
 


	
 

	
SECTION 8.01 Right to Increase Commitment

	
49


	
 

	
SECTION 8.02 Procedure for Obtaining Increases in
  Commitment

	
50


	
 

	
SECTION 8.03 Conditions Precedent to Increase in
  Commitment

	
51


	
ARTICLE IX

	
51

	
 


	
 

	
SECTION 9.01 Right to Complete or Partial
  Termination of Facilities

	
51


	
 

	
SECTION 9.02 Procedure for Complete or Partial
  Termination of Facilities.

	
51


	
 

	
SECTION 9.03 Conditions Precedent to Complete or
  Partial Termination of Facilities

	
52


	
ARTICLE X

	
52

	
 


	
 

	
SECTION 10.01 Right to Terminate Credit Facility

	
53


	
 

	
SECTION 10.02 Procedure for Terminating Credit
  Facility

	
53


	
 

	
SECTION 10.03 Conditions Precedent to Termination of
  Credit Facility

	
53


	
ARTICLE XI

	
54

	
 


	
 

	
SECTION 11.01 Conditions Applicable to All Requests

	
54


	
 

	
SECTION 11.02 Delivery of Closing Documents Relating
  to Initial Advance Request, Collateral Addition Request, Collateral
  Substitution Request, Credit Facility Expansion Request or Future Advance
  Request

	
55


	
 

	
SECTION 11.03 Delivery of Property-Related Documents

	
55


	
ARTICLE XII

	
56

	
 


	
 

	
SECTION 12.01 Representations and Warranties of the
  Borrower

	
56


	
 

	
SECTION 12.02 Representations and Warranties of the
  Borrower

	
61


	
 

	
SECTION 12.03 Representations and Warranties of the
  Lender

	
64


	
ARTICLE XIII

	
64

	
 


	
 

	
SECTION 13.01 Compliance with Agreements

	
64


	
 

	
SECTION 13.02 Maintenance of Existence

	
64


	
 

	
SECTION 13.03 Maintenance of REIT Status

	
65


	
 

	
SECTION 13.04 Financial Statements; Accountants’
  Reports; Other Information

	
65


	
 

	
SECTION 13.05 Certificate of Compliance

	
67


	
 

	
SECTION 13.06 Maintain Licenses

	
67


	
 

	
SECTION 13.07 Access to Records; Discussions With
  Officers and Accountants

	
67


	
 

	
SECTION 13.08 Inform the Lender of Material Events

	
68


	
 

	
SECTION 13.09 Intentionally Omitted

	
69


	
 

	
SECTION 13.10 Inspection

	
69


	
 

	
SECTION 13.11 Compliance with Applicable Laws

	
69


	
 

	
SECTION 13.12 Warranty of Title

	
70


	
 

	
SECTION 13.13 Defense of Actions

	
70


	
 

	
SECTION 13.14 Alterations to the Mortgaged
  Properties

	
70


	
 

	
SECTION 13.15 ERISA

	
71


	
 

	
SECTION 13.16 Loan Document Taxes

	
71


	
 

	
SECTION 13.17 Further Assurances

	
71


	
 

	
SECTION 13.18 Monitoring Compliance

	
71


	
	




A-2






	
 

	
 

	
 


	
 

	
SECTION 13.19 Leases

	
72


	
 

	
SECTION 13.20 Intentionally Omitted

	
72


	
 

	
SECTION 13.21 Transfer of Ownership Interests of the
  Borrower

	
72


	
 

	
SECTION 13.22 Change in Senior Management

	
74


	
 

	
SECTION 13.23 Date-Down Endorsements

	
74


	
 

	
SECTION 13.24 Geographical Diversification

	
74


	
 

	
SECTION 13.25 Ownership of Mortgaged Properties

	
74


	
ARTICLE XIV

	
75

	
 


	
 

	
SECTION 14.01 Other Activities

	
75


	
 

	
SECTION 14.02 Value of Security

	
75


	
 

	
SECTION 14.03 Zoning

	
75


	
 

	
SECTION 14.04 Liens

	
75


	
 

	
SECTION 14.05 Sale

	
75


	
 

	
SECTION 14.06 Indebtedness

	
76


	
 

	
SECTION 14.07 Principal Place of Business

	
76


	
 

	
SECTION 14.08 Frequency of Requests

	
76


	
 

	
SECTION 14.09 Change in Property Management

	
76


	
 

	
SECTION 14.10 Condominiums

	
76


	
 

	
SECTION 14.11 Restrictions on Partnership
  Distributions

	
76


	
 

	
SECTION 14.12 Lines of Business

	
76


	
 

	
SECTION 14.13 Limitation on Unimproved Real Property
  and New Construction

	
76


	
 

	
SECTION 14.14 Dividend Payout

	
77


	
ARTICLE XV

	
77

	
 


	
 

	
SECTION 15.01 Financial Definitions

	
77


	
 

	
SECTION 15.02 Compliance with Debt Service Coverage
  Ratios

	
81


	
 

	
SECTION 15.03 Compliance with Loan to Value Ratios

	
81


	
 

	
SECTION 15.04 Compliance with Concentration Test

	
81


	
 

	
SECTION 15.05 Compliance with REIT’s Net Worth Test

	
81


	
 

	
SECTION 15.06 Compliance with REIT’s Total
  Indebtedness to Consolidated Total Assets Ratio

	
81


	
 

	
SECTION 15.07 Compliance with REIT’s Consolidated
  EBITDA to Interest Ratio

	
82


	
 

	
SECTION 15.08 Compliance with REIT’s Consolidated
  EBITDA to Fixed Charge Ratio

	
82


	
ARTICLE XVI

	
82

	
 


	
 

	
SECTION 16.01 Standby Fee and Rate Preservation Fee

	
82


	
 

	
SECTION 16.02 Origination Fees

	
82


	
 

	
SECTION 16.03 Due Diligence Fees

	
82


	
 

	
SECTION 16.04 Legal Fees and Expenses

	
83


	
 

	
SECTION 16.05 MBS-Related Costs

	
83


	
 

	
SECTION 16.06 Failure to Close any Request

	
83


	
 

	
SECTION 16.07 Other Fees

	
83


	
ARTICLE XVII

	
84

	
 


	
 

	
SECTION 17.01 Events of Default

	
84


	
ARTICLE XVIII

	
86

	
 


	
 

	
SECTION 18.01 Remedies; Waivers

	
86


	
 

	
SECTION 18.02 Waivers; Rescission of Declaration

	
87


	
	




A-3






	
 

	
 

	
 


	
 

	
SECTION 18.03 The Lender’s Right to Protect
  Collateral and Perform Covenants and Other Obligations

	
87


	
 

	
SECTION 18.04 No Remedy Exclusive

	
87


	
 

	
SECTION 18.05 No Waiver

	
87


	
 

	
SECTION 18.06 No Notice

	
87


	
 

	
SECTION 18.07 Application of Payments

	
87


	
ARTICLE XIX

	
88

	
 


	
 

	
SECTION 19.01 Special Pool Purchase Contract

	
88


	
 

	
SECTION 19.02 Assignment of Rights

	
88


	
 

	
SECTION 19.03 Release of Collateral

	
88


	
 

	
SECTION 19.04 Replacement of Lender

	
88


	
 

	
SECTION 19.05 Fannie Mae and Lender Fees and
  Expenses

	
89


	
 

	
SECTION 19.06 Third-Party Beneficiary

	
89


	
ARTICLE XX

	
89

	
 


	
 

	
SECTION 20.01 Insurance and Real Estate Taxes

	
89


	
 

	
SECTION 20.02 Replacement Reserves

	
89


	
ARTICLE XXI

	
89

	
 


	
 

	
SECTION 21.01 Swap

	
89


	
 

	
SECTION 21.02 Swap Terms

	
90


	
 

	
SECTION 21.03 Swap Security Agreement; Delivery of
  Swap Payments

	
90


	
 

	
SECTION 21.04 Termination

	
91


	
 

	
SECTION 21.05 Performance Under Swap Documents

	
91


	
ARTICLE XXII

	
91

	
 


	
 

	
SECTION 22.01 Personal Liability to the Borrower

	
91


	
ARTICLE XXIII

	
93

	
 


	
 

	
SECTION 23.01 Counterparts

	
93


	
 

	
SECTION 23.02 Amendments, Changes and Modifications

	
93


	
 

	
SECTION 23.03 Payment of Costs, Fees and Expenses

	
93


	
 

	
SECTION 23.04 Payment Procedure

	
94


	
 

	
SECTION 23.05 Payments on Business Days

	
94


	
 

	
SECTION 23.06 Choice of Law; Consent to
  Jurisdiction; Waiver of Jury Trial

	
94


	
 

	
SECTION 23.07 Severability

	
95


	
 

	
SECTION 23.08 Notices

	
95


	
 

	
SECTION 23.09 Further Assurances and Corrective
  Instruments

	
98


	
 

	
SECTION 23.10 Term of this Agreement

	
98


	
 

	
SECTION 23.11 Assignments; Third-Party Rights

	
98


	
 

	
SECTION 23.12 Headings

	
98


	
 

	
SECTION 23.13 General Interpretive Principles

	
98


	
 

	
SECTION 23.14 Interpretation

	
99


	
 

	
SECTION 23.15 Standards for Decisions, Etc

	
99


	
 

	
SECTION 23.16 Decisions in Writing

	
99


	
 

	
SECTION 23.17 Joint and Several Liability

	
99


	
	




A-4






	
 

	
 

	
 


	
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

	
-

	
Collateral Addition Request


	
EXHIBIT R

	
-

	
Collateral Addition Description Package


	
EXHIBIT S

	
-

	
Collateral Addition Supporting Documents


	
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

	
-

	
Reborrowing Request


	
EXHIBIT DD

	
-

	
Collateral Substitution Description Package


	
EXHIBIT EE

	
-

	
Collateral Substitution Supporting Documents


	
EXHIBIT FF

	
-

	
Reborrowing Amendment


	
EXHIBIT GG

	
-

	
Swap Security Agreement


	
EXHIBIT HH

	
-

	
DUS Properties


	
EXHIBIT II

	
-

	
Approved Swap


	
 

	
 

	
 





A-5






EXHIBIT A TO 

SECOND AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


SCHEDULE OF INITIAL MORTGAGED
PROPERTIES

AND INITIAL VALUATIONS


 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Property
  Name

	
 

	
County

	
 

	
Property
  Location

	
 

	
Initial
  Valuation


	 

	 

	 

	 

	 

	 

	 


	
Abbington Place

	
 

	
Madison

	
 

	
Huntsville, AL

	
 

	
$  4,670,000


	
Paddock Club Montgomery

	
 

	
Montgomery

	
 

	
Montgomery, AL

	
 

	
$10,370,000


	
Terraces at Towne Lake II

	
 

	
Cherokee

	
 

	
Woodstock, GA

	
 

	
$14,870,000


	
Terraces at Fieldstone

	
 

	
Rockdale

	
 

	
Conyers, GA

	
 

	
$20,700,000


	
Paddock Club Columbia I and II

	
 

	
Richland

	
 

	
Columbia, SC

	
 

	
$13,420,000


	
The Mansion

	
 

	
Fayette

	
 

	
Lexington, KY

	
 

	
$  7,630,000


	
Brentwood Downs

	
 

	
Davidson

	
 

	
Nashville, TN

	
 

	
$14,600,000


	
Calais Forest

	
 

	
Pulaski

	
 

	
Little Rock, AR

	
 

	
$  9,900,000


	
Southland Station II

	
 

	
Houston

	
 

	
Warner Robins, GA

	
 

	
$  8,050,000


	
Fairways at Hartland

	
 

	
Warren

	
 

	
Bowling Green, KY

	
 

	
$10,900,000


	
Paddock Club Murfreesboro

	
 

	
Rutherford

	
 

	
Murfreesboro, TN

	
 

	
$14,160,000


	
Whisperwood

	
 

	
Muscogee

	
 

	
Columbus, GA

	
 

	
$49,900,000


	
River Trace I

	
 

	
Shelby

	
 

	
Memphis, TN

	
 

	
$  8,975,000


	
Wildwood I

	
 

	
Thomas

	
 

	
Thomasville, GA

	
 

	
$  3,825,000


	
Three Oaks I

	
 

	
Lowndes

	
 

	
Valdosta, GA

	
 

	
$  3,950,000


	
Westbury Springs

	
 

	
Gwinnett

	
 

	
Lilburn, GA

	
 

	
$  6,775,000


	
Hickory Farms

	
 

	
Shelby

	
 

	
Memphis, TN

	
 

	
$  6,475,000


	
Gleneagles

	
 

	
Shelby

	
 

	
Memphis, TN

	
 

	
$  6,850,000


	
The Oaks

	
 

	
Madison

	
 

	
Jackson, TN

	
 

	
$  2,825,000


	
TPC Greenville

	
 

	
Greenville

	
 

	
Greenville, SC

	
 

	
$  8,930,000


	
TPC Huntsville

	
 

	
Madison

	
 

	
Huntsville, AL

	
 

	
$17,800,000


	
Eagle Ridge

	
 

	
Birmingham

	
 

	
Birmingham, AL

	
 

	
$  8,400,000


	
River Hills

	
 

	
Grenada

	
 

	
Grenada, MS

	
 

	
$  1,600,000


	
Stonemill Village

	
 

	
Jefferson

	
 

	
Louisville, KY

	
 

	
$19,825,000


	
Woodwinds

	
 

	
Aiken

	
 

	
Aiken, SC

	
 

	
$  7,000,000


	
Tanglewood

	
 

	
Anderson

	
 

	
Anderson, SC

	
 

	
$  5,110,000


	
Wood Hollow

	
 

	
Duval

	
 

	
Jacksonville, FL

	
 

	
$22,800,000


	
Terraces at Towne Lake I

	
 

	
Cherokee

	
 

	
Woodstock, GA

	
 

	
$16,450,000


	
Grand Reserve

	
 

	
Fayette

	
 

	
Lexington, KY

	
 

	
$23,200,000


	
Island Retreat

	
 

	
Glynn

	
 

	
St. Simons Island, GA

	
 

	
$  5,400,000


	
Belmere

	
 

	
Hillsborough

	
 

	
Tampa, FL

	
 

	
$11,150,000


	
Bradford Chase (WV)

	
 

	
Madison

	
 

	
Jackson, TN

	
 

	
$  4,960,000


	
Crosswinds

	
 

	
Rankin

	
 

	
Jackson, MS

	
 

	
$13,420,000


	
Fairways at Royal Oak

	
 

	
Clermont

	
 

	
Cincinnati, OH

	
 

	
$  9,800,000


	
Hermitage at Beechtree

	
 

	
Wake

	
 

	
Cary, NC

	
 

	
$  8,720,000


	
Hidden Lake II

	
 

	
Fulton

	
 

	
Union City, GA

	
 

	
$  7,050,000


	
High Ridge

	
 

	
Clarke

	
 

	
Athens, GA

	
 

	
$  6,600,000


	
Howell Commons

	
 

	
Greenville

	
 

	
Greenville, SC

	
 

	
$12,380,000


	
Kirby Station

	
 

	
Shelby

	
 

	
Memphis, TN

	
 

	
$15,800,000


	
Lakepointe

	
 

	
Fayette

	
 

	
Lexington, KY

	
 

	
$  4,425,000





A-6






	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Property
  Name

	
 

	
County

	
 

	
Property
  Location

	
 

	
Initial
  Valuation


	 

	 

	 

	 

	 

	 

	 


	
Lakeside

	
 

	
Duval

	
 

	
Jacksonville, FL

	
 

	
$21,100,000


	
Lighthouse Court

	
 

	
Clay

	
 

	
Orange Park, FL

	
 

	
$40,092,000


	
Marsh Oaks

	
 

	
Duval

	
 

	
Atlantic Beach, FL

	
 

	
$  5,500,000


	
Napa Valley

	
 

	
Pulaski

	
 

	
Little Rock, AR

	
 

	
$10,500,000


	
Park Haywood

	
 

	
Greenville

	
 

	
Greenville, SC

	
 

	
$  5,600,000


	
Park Place

	
 

	
Spartanburg

	
 

	
Spartanburg, SC

	
 

	
$  6,470,000


	
Pear Orchard

	
 

	
Madison

	
 

	
Jackson, MS

	
 

	
$15,700,000


	
Savannah Creek

	
 

	
DeSoto

	
 

	
Southaven, MS (Memphis suburb)

	
 

	
$  9,550,000


	
Shenandoah Petersburg

	
 

	
Columbia

	
 

	
Augusta, GA

	
 

	
$  9,567,000


	
Somerset

	
 

	
Hinds

	
 

	
Jackson, MS

	
 

	
$  3,160,000


	
Southland Station I

	
 

	
Houston

	
 

	
Warner Robins, GA

	
 

	
$  7,300,000


	
Steeplechase

	
 

	
Hamilton

	
 

	
Chattanooga, TN

	
 

	
$  4,000,000


	
Sutton Place

	
 

	
DeSoto

	
 

	
Southaven, MS (Memphis suburb)

	
 

	
$10,800,000


	
Tiffany Oaks

	
 

	
Seminole

	
 

	
Altamonte Springs, FL

	
 

	
$14,750,000


	
Village

	
 

	
Fayette

	
 

	
Lexington, KY

	
 

	
$10,340,000


	
Westside Creek I

	
 

	
Pulaski

	
 

	
Little Rock, AR

	
 

	
$  7,010,000


	
Willow Creek

	
 

	
Muscogee

	
 

	
Columbus, GA

	
 

	
$10,150,000


	
Links at Carrollwood

	
 

	
Hillsborough

	
 

	
Tampa, FL

	
 

	
$13,050,000


	
Grand View

	
 

	
Nashville

	
 

	
Nashville, TN

	
 

	
$26,805,000


	
Three Oaks II

	
 

	
Lowndes

	
 

	
Valdosta, GA

	
 

	
$  4,737,000


	
Wildwood II

	
 

	
Thomas

	
 

	
Thomasville, GA

	
 

	
$  3,950,000


	
Lighthouse Court

	
 

	
Clay

	
 

	
Orange Park, FL

	
 

	
$40,092,000





A-7









EXHIBIT B TO

SECOND 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 Second
Amended and Restated Master Credit Facility Agreement, dated as of March 30,
2004 by and among Borrower 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 and


B-1






 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 _______________, 20__ 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 not the
  obligation, to recalculate the prepayment premium based 

  



B-4






	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  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)         Schedules
A and B are hereby incorporated by reference into this Note.


          (d)         Any
required prepayment of less than the 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
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.


B-5






          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 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 


B-6






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.


[Remainder of page intentionally
left blank.]


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)


x          Schedule
B Modifications to Multifamily Note


B-10






USE
IF DEFEASANCE IS SELECTED


SCHEDULE
A


PREPAYMENT
PREMIUM


No prepayment premium shall be payable in connection
with a prepayment of this Note after the end of the Lockout Period (as defined
in Schedule B to this Note). 


B-11






USE
IF YIELD MAINTENANCE IS SELECTED


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

  



B-12






	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  [r =

  	
  Yield Rate

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  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-13






USE
IF DEFEASANCE IS SELECTED


SCHEDULE
B


MODIFICATIONS
TO FIXED FACILITY NOTE


          The
Fixed Facility Note dated ___________, ____ in the original principal amount of
$____________ (the “Note”) issued by MID-AMERICA APARTMENTS, L.P., a
Tennessee limited partnership, and MID-AMERICA APARTMENT COMMUNITIES, IN.C, a
Tennessee corporation (collectively, the “Borrower”), and payable to the
order of PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”)
is hereby amended as follows:


          1.          Notwithstanding
Paragraph 10 of this Note, Borrower shall not have the right voluntarily to
prepay any of the principal of this Note during the period beginning on the
date of this Note and ending on the 90th day before the Maturity Date
(determined without regard to Lender’s exercise of any right of acceleration of
this Note) (the “Lockout Period”). The preceding sentence shall not
apply to a prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument. If Borrower
obtains a release of the Mortgaged Property from the lien of the Security
Instrument pursuant to Section 3.10 of the Master Agreement, Borrower shall not
have the right voluntarily to prepay any of the principal of this Note at any
time.


          2.          Upon
Lender’s exercise, at any time during the Lockout Period, of any right of
acceleration of this Note, Borrower shall pay the following amounts to Lender:


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (A)

  	
  all sums due Lender under this Note and the other
  Loan Documents (other than the unpaid principal balance of the Note which is
  included as a part of 2(B) below; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (B)

  	
  an amount equal to the greater of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (i)          the
  Defeasance Deposit that would be payable by Borrower to Lender if the
  Defeasance Deposit were calculated on the Business Day before the date on
  which Lender accelerates this Note (and assuming that the “Defeasance
  Closing Date” defined in the Master Agreement is the date Lender
  accelerates the Note), plus the next scheduled payment of principal
  and interest due in the month following the month Lender accelerates this
  Note, or

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
            (ii)         all
  accrued interest and the unpaid principal balance of this Note as of the
  Business Day before the date on which Lender accelerates this Note.

  



B-14






          3.          Paragraph
5 of this Note is amended by adding a paragraph at the end thereof to read as
follows:


	
   

  	
   

  	
   

  
	
   

  	
            
  “If Borrower obtains a release of the Mortgaged Property from the lien of the
  Security Instrument pursuant to Section 3.10 of the Master Agreement, the
  Indebtedness shall be secured by the Pledge Agreement, and reference shall be
  made to the Pledge Agreement for other rights of Lender concerning the
  collateral for the Indebtedness.”

  



          4.          Paragraph
9 of this Note is amended by adding a paragraph at the end thereof to read as
follows:


	
   

  	
   

  	
   

  
	
   

  	
            “If
  Borrower obtains a release of the Mortgaged Property from the lien of the
  Security Instrument pursuant to Section 3.10 of the Master Agreement,
  Borrower shall have no personal liability under this Note or the Pledge
  Agreement for the repayment of the Indebtedness or for the performance of any
  other obligations of Borrower under this Note or the Pledge Agreement (other
  than any liability under Section 18 of the Security Instrument for events
  that occur prior to the Defeasance Closing Date, whether discovered before or
  after the Defeasance Closing Date), and Lender’s only recourse for the
  satisfaction of the Indebtedness and the performance of such obligations
  shall be Lender’s exercise of its rights and remedies with respect to the
  collateral held by Lender under the Pledge Agreement as security for the
  Indebtedness.”

  
	
   

  	
   

  	
   

  






	
   

  	
   

  	
   

  
	
   

  	 


  	
   

  
	
   

  	
  INITIALS

  	
   

  



B-15






EXHIBIT
C TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


INTENTIONALLY
OMITTED






EXHIBIT
D TO

SECOND AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT


COMPLIANCE
CERTIFICATE


     The undersigned
(individually and collectively, “Borrower”)
hereby certify to Prudential Multifamily Mortgage, Inc., a Delaware corporation
(the “Lender”) and Fannie
Mae as follows:


          Section
1.          Master
Agreement. Borrower entered into that certain Second Amended and
Restated Master Credit Facility Agreement, dated as of March 30, 2004 by and
among Borrower 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.  Each Borrower 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: _____________


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

  



D-1






EXHIBIT
E TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


SAMPLE
FACILITY DEBT SERVICE


For this example:


	
   

  	
  - Total Credit Facility Commitment amount is

  	
   

  	
  $400,000,000

  	
   

  
	
   

  	
  - Variable Facility Commitment amount is

  	
   

  	
  $300,000,000

  	
   

  
	
   

  	
  - Fixed Facility Commitment amount is

  	
   

  	
  $100,000,000

  	
   

  
	
   

  	
  - Total Variable Facility Advances outstanding is

  	
   

  	
  $300,000,000

  	
   

  
	
   

  	
  - Total Fixed Facility Advances outstanding is

  	
   

  	
  $100,000,000

  	
   

  
	
   

  	
  - 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:

  	
   

  	
   

  	
   

  
	
   

  	
  $300,000,000 @ 3.0%, 30
  year amortization =

  	
   

  	
  $TBD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility Debt Service allocable to Fixed Facility
  Advances:

  	
   

  	
   

  	
   

  
	
   

  	
  $    100,000,000 @ 6% 30
  year amortization =

  	
   

  	
  $TBD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Standby Fee: $0 X 15 bp =

  	
   

  	
  $0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facility Debt Service =

  	
   

  	
  $TBD per
  month

  



E-1






EXHIBIT
F TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


ORGANIZATIONAL
CERTIFICATE


          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 and the OP (the “Borrower Parties”)
entered into that certain Second 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






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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-2






EXHIBIT A


(See Attached
Resolutions, if any)






EXHIBIT B


None






EXHIBIT
G TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


INTENTIONALLY
OMITTED









EXHIBIT
H TO

SECOND 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

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT

AMENDED AND RESTATED 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 Second
Amended and Restated Master Credit Facility Agreement, dated as of March 30,
2004, by and among Borrower and Lender (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 

SECOND 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

SECOND 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 Second
  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 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:  

	 





K-3







	
 

	
 

	
 


	
 

	
Maturity Date of Variable Advance:

	 


	
 

	
 

	
 


	
 

	
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. 


	
 

	
 


	
 

	

          (d)          Defeasance
or Yield Maintenance. [For Fixed Facility Advance only] The Borrower requests
the following with respect to prepayments of Fixed Facility Advances for the
first Fixed Facility Commitment, if applicable: 


	
 

	
 


	
 

	
          [   ]
  Defeasance or


	
 

	
 


	
 

	
          [   ]
  Yield Maintenance.





          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:

	 

	
 





K-4







	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
   Simon R.C. Wadsworth


	
 

	
 

	
 

	
   Executive Vice President





K-5






EXHIBIT
L TO 

SECOND AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT
TO AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


          THIS
____ AMENDMENT TO SECOND 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”) and (ii) PRUDENTIAL
MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”). 


RECITALS


          A.          The
Borrower and the Lender are parties to that certain Second 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, and that certain Assignment of Collateral
Agreements and Other Loan Documents dated as of December 10, 2003 and that
certain 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

	
 





          PRUDENTIAL
MULTIFAMILY MORTGAGE, INC., a Delaware corporation 


	
 

	
 

	
 


	
 

	
By:

	 


	
 

	
Name:

	 


	
 

	
Title:

	 





L-3






EXHIBIT
M TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


RATE
SETTING FORM


          Pursuant
to Section 4.01(b) of that certain Second 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”) and the undersigned
(the “Borrower”), 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

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


RATE
CONFIRMATION FORM


          Pursuant
to Section 4.01(c) of that certain Second 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”), and (c) Mid-America Apartments,
L.P., a Tennessee limited partnership (“OP”; REIT and OP, collectively,
the “Borrower”), 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

SECOND 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 and the Lender are parties to that certain Second 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, and that certain Assignment of Collateral
Agreements and Other Loan Documents dated as of December 10, 2003 and that
certain 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 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:


O-1






          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 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

SECOND 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 Second
  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 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

  



P-1






	
   

  	
   

  	
   

  
	
   

  	
   

  	
  _____ Variable Advance

  
	
   

  	
   

  	
   

  
	
   

  	
  (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

  



P-2






	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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.

  



          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

SECOND 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).


____________________, ______


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 ADDITION REQUEST issued pursuant to the
  Second Amended and Restated Master Credit Facility Agreement, dated as of
  March 30, 2004, by and among the undersigned (the “Borrower”) 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 Property
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:


Q-1






	
   

  	
   

  
	
   

  	
            (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;

  
	
   

  	
   

  
	
   

  	
            (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

  	
   

  



Q-2






EXHIBIT
R TO

SECOND 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:

  
	
   

  	
   

  	
   

  
	
  __________________________________________________

  
	
   

  	
   

  	
   

  
	
  __________________________________________________

  
	
   

  	
   

  	
   

  
	
  __________________________________________________

  
	
   

  	
   

  	
   

  
	
  __________________________________________________

  



R-1






EXHIBIT
S TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


COLLATERAL
ADDITION REQUEST SUPPORTING DOCUMENTS


[NOTE: SUBJECT TO
LENDER REVIEW

AND POSSIBLE WAIVER]


ADDITIONS
TO COLLATERAL


DUS
APPLICATION CHECKLIST


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).

  



S-1






	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  _____

  	
   

  	
  _____

  	
   

  	
   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.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  _____

  	
   

  	
  _____

  	
   

  	
   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.

  



S-2






	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  III.

  	
   

  	
  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 REIT-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.


S-3






EXHIBIT
T TO

SECOND 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
  Second Amended and Restated Master Credit Facility Agreement, dated as of
  March 30, 2004, by and among the undersigned (the “Borrower”) and Lender (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:

  



T-1






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  _____________________________________________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

SECOND 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”)
and (b) MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership (“OP”;
the REIT and OP being collectively referred to as the “Borrower”), for the benefit of
Prudential Multifamily Mortgage, Inc., a Delaware corporation (“Lender”). 


RECITALS


          A.          The
Borrower and the Lender are parties to that certain Second 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, and that certain Assignment of Collateral
Agreements and Other Loan Documents dated as of December 10, 2003 and that
certain 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, 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 agrees as follows:


U-1






          Section
1.          Confirmation
of Obligations. The Borrower confirms 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
confirms 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

  	
     

  



U-3






	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	 


  
	
   

  	
  Name:

  	 


  
	
   

  	
  Title:

  	 


  



U-4











EXHIBIT V TO

SECOND 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 Second 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 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
$600,000,000 and the increase in the Maximum Credit Commitment must be in the
minimum amount of $10,000,000.]


	
   

  	
   

  
	
   

  	
            (b)          Geographical
  Diversification Requirements.  The
  Borrower hereby requests that the Lender inform the Borrower of any change in
  the Geographical Diversification Requirements.

  
	
   

  	
   

  
	
   

  	
            (c)          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.

  
	
   

  	
   

  
	
   

  	
            (d)          Defeasance
  or Yield Maintenance.  [For Fixed
  Facility Advance only] The Borrower requests the following with respect to
  prepayments of Fixed Facility Advances for the first Fixed Facility
  Commitment, if applicable:

  
	
   

  	
   

  
	
   

  	
            [   ] Defeasance or

  
	
   

  	
   

  
	
   

  	
            [  ] Yield Maintenance.

  



          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

SECOND 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 Second 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 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

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT TO AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


THIS ____
AMENDMENT TO SECOND 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”), and (b) MID-AMERICA APARTMENTS, L.P., a
Tennessee limited partnership (“OP”; the REIT and OP being collectively
referred to as the “Borrower”) and (ii) PRUDENTIAL MULTIFAMILY MORTGAGE,
INC., a Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower and the Lender are parties to that certain Second 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, and that certain Assignment of Collateral
Agreements and Other Loan Documents dated as of December 10, 2003 and that
certain 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRUDENTIAL
  MULTIFAMILY MORTGAGE, INC.,
a Delaware corporation

  






	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	 


  
	
   

  	
   

  	
   

  



X-3






EXHIBIT Y TO

SECOND 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 Second 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 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

  	
   

  



Y-2






EXHIBIT Z TO

SECOND 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 Second Amended and Restated
  Master Credit Facility Agreement, dated as of March 30, 2004, by and among
  the undersigned (collectively, the “Borrower”)
  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.


Z-1






          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 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

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


SCHEDULE OF APPROVED

PROPERTY MANAGEMENT AGREEMENTS


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Property Name 

  	
   

  	
  Manager 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Abbington
  Place

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  2.

  	
  Paddock Club
  Montgomery

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  3.

  	
  Terraces at
  Towne Lake II

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  4.

  	
  Terraces at
  Fieldstone

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  5.

  	
  Paddock Club
  Columbia I and II

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  6.

  	
  The Mansion

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  7.

  	
  Brentwood
  Downs

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  8.

  	
  Calais
  Forest

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  9.

  	
  Southland
  Station II

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  10.

  	
  Fairways at
  Hartland

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  11.

  	
  Paddock Club
  Murfreesboro

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  12.

  	
  Whisperwood

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  13.

  	
  River Trace
  I

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  14.

  	
  Wildwood I

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  15.

  	
  Three Oaks I

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  16.

  	
  Westbury
  Springs

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  17.

  	
  Hickory
  Farms

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  18.

  	
  Gleneagles

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  19.

  	
  The Oaks

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  20.

  	
  TPC Greenville

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  21.

  	
  TPC
  Huntsville

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  22.

  	
  Eagle Ridge

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  23.

  	
  River Hills

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  24.

  	
  Stonemill
  Village

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  25.

  	
  Woodwinds

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  26.

  	
  Tanglewood

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  27.

  	
  Wood Hollow

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  28.

  	
  Belmere

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  29.

  	
  Bradford
  Chase (WV)

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  30.

  	
  Crosswinds

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  31.

  	
  Fairways at
  Royal Oak

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  32.

  	
  Hermitage at
  Beechtree

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  33.

  	
  Hidden Lake
  II

  	
   

  	
  Mid-America
  Apartments, L.P.

  



AA-1






	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
  High Ridge

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  35.

  	
  Howell
  Commons

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  36.

  	
  Kirby
  Station

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  37.

  	
  Lakepointe

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  38.

  	
  Lakeside

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  39.

  	
  Marsh Oaks

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  40.

  	
  Napa Valley

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  41.

  	
  Park Haywood

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  42.

  	
  Park Place

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  43.

  	
  Pear Orchard

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  44.

  	
  Savannah
  Creek

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  45.

  	
  Shenandoah
  Petersburg

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  46.

  	
  Somerset

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  47.

  	
  Southland
  Station I

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  48.

  	
  Steeplechase

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  49.

  	
  Sutton Place

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  50.

  	
  Tiffany Oaks

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  51.

  	
  Village

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  52.

  	
  Westside
  Creek I

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  53.

  	
  Willow Creek

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  54.

  	
  Links at
  Carrollwood

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  55.

  	
  Grand View

  	
   

  	
  Mid-America
  Apartments, L.P.

  
	
  56.

  	
  Three Oaks
  II

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  57.

  	
  Wildwood II

  	
   

  	
  Mid-America
  Apartment Communities, Inc.

  
	
  58.

  	
  Lighthouse
  Court

  	
   

  	
  Mid-America
  Apartments, L.P.

  



AA-2






EXHIBIT BB TO

SECOND AMENDED AND RESTATED

MASTER CREDIT FACILITY AGREEMENT


INDEPENDENT UNIT ENCUMBRANCES


None


BB-1






EXHIBIT CC TO

SECOND 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 Second 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:

  



CC-1






	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Closing Date
  of Fixed Facility Advance:

  	
   

  	
   

  
	
   

  	
   

  	 


  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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

  	
   

  



CC-2






CC-3








EXHIBIT
DD TO 

SECOND 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 

SECOND 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-2






	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
_____

	
 

	
_____

	
 

	
 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-3






	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
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-4






EXHIBIT FF TO 

SECOND AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


AMENDMENT TO AMENDED AND RESTATED 

MASTER CREDIT FACILITY AGREEMENT


          THIS
____ AMENDMENT TO SECOND 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 “Borrower”); and (ii)
PRUDENTIAL MULTIFAMILY MORTGAGE INC., a Delaware corporation (“Lender”).


RECITALS


          A.          The
Borrower and Lender are parties to that certain Second Amended and Restated
Master Credit Facility Agreement, dated as of March 30, 2003 (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, and that certain Assignment of Collateral
Agreements and Other Loan Documents dated as of December 10, 2003 and that
certain 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:


          “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 


FF-1






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.]


FF-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]


FF-3







	
 

	
 

	
 

	
 


	
 

	
LENDER:


	
 

	
 


	
 

	
PRUDENTIAL MULTIFAMILY MORTGAGE INC., 


	
 

	
a Delaware corporation


	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
 

	
 


	
 

	
Name:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
 

	
 


	
 

	
Title:

	
 

	
 


	
 

	
 

	 

	
 





FF-4






EXHIBIT GG TO 

SECOND 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 MID-AMERICA
APARTMENT COMMUNITIES, INC., a Tennessee corporation (the “REIT”), MID-AMERICA
APARTMENTS, L.P., a Tennessee limited partnership (“OP”; the REIT and OP
being collectively referred to as the “Grantor”) and PRUDENTIAL MULTIFAMILY
MORTGAGE, INC., a Delaware corporation formerly known as Washington Mortgage
Financial Group, Ltd. (“Lender”).  [ADD SWAP PROVIDER]


RECITALS:


          A          Grantor
and the Lender are parties to that certain Second 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.


GG-1






                       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 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; 



                                       (vii)          all
cash and non-cash proceeds and products of any of the foregoing, including,
without limitation, interest, dividends, cash, instruments and other 


GG-2






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; and


                                       (viii)          [ADD
SWAP
PAYMENTS]


          3.          Delivery
of Hedge Documents.


                       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 


GG-3






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 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 


GG-4






“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 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.


GG-5






                       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.


                       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.


GG-6







	
 

	
 

	
 

	
 

	
 


	
 

	
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





[Signatures
continued on following page]


GG-7








	
 

	
 

	
 

	
 


	
 

	
LENDER

	
 


	
 

	
 

	
 


	
 

	
PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware
  corporation, formerly known as Washington Mortgage Financial Group, Ltd.


	
 

	
 

	
 


	
 

	
By:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
Name:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
Title:

	
 

	
 


	
 

	
 

	 

	
 


	
 

	
 

	
 


	
 

	
[ADD
  SWAP PROVIDER]

	
 





GG-8






EXHIBIT A


Hedge Documents


(See Attached)


GG-9






EXHIBIT HH TO 

SECOND 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 

SECOND 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

	
%

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
$

	
40,000,000.00

	
 

	
 

	
3/31/2010

	
 

	
 

	
4.850

	
%

	
 

	
AmSouth

	
 

	
 

	
Fannie Accepted - Forward
  
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.


DD-i