Document:

EX-10.1

Exhibit 10.1

EXECUTION VERSION          

MASTER CREDIT FACILITY AGREEMENT

BY AND BETWEEN

BORROWERS SIGNATORY HERETO

AND

PNC ARCS LLC

dated as of

February 27, 2009

Colonial/PNC ARCS — Master Credit Facility Agreement

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 
	 	 	Page	 
	ARTICLE 1 THE COMMITMENT
	 	 	2	 
	 
	 	 	 	 
	Section 1.01. The Commitment
	 	 	2	 
	Section 1.02. Requests for Advances
	 	 	2	 
	Section 1.03. Maturity Date of Advances; Amortization; Prepayment
	 	 	3	 
	Section 1.04. Interest on Advances
	 	 	5	 
	Section 1.05. Notes
	 	 	6	 
	Section 1.06. Conversion of SARM Variable Advances to Fixed Advances
	 	 	6	 
	Section 1.07. Limitations on Right to Convert to Fixed Advances
	 	 	6	 
	Section 1.08. Conditions to Conversion
	 	 	7	 
	Section 1.09. Interest Rate Protection
	 	 	7	 
	Section 1.10. Limitation on All Advances
	 	 	7	 
	 
	 	 	 	 
	ARTICLE 2 THE ADVANCES
	 	 	8	 
	 
	 	 	 	 
	Section 2.01. Rate Setting for an Advance
	 	 	8	 
	Section 2.02. Breakage and Other Costs
	 	 	8	 
	Section 2.03. Advances
	 	 	8	 
	Section 2.04. Determination of Allocable Facility Amount and Valuations
	 	 	9	 
	Section 2.05. Additional Financing
	 	 	10	 
	Section 2.06. Increase in Commitment
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 3 COLLATERAL CHANGES
	 	 	10	 
	 
	 	 	 	 
	Section 3.01. Right to Add Collateral
	 	 	10	 
	Section 3.02. Procedure for Adding Collateral
	 	 	10	 
	Section 3.03. Right to Obtain Releases of Collateral
	 	 	12	 
	Section 3.04. Procedure for Obtaining Releases of Collateral
	 	 	12	 
	Section 3.05. Substitutions
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 4 TERMINATION OF FACILITIES
	 	 	17	 
	 
	 	 	 	 
	Section 4.01. Right to Terminate Credit Facility
	 	 	17	 
	Section 4.02. Procedure for Terminating Credit Facility
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 5 CONDITIONS PRECEDENT TO ALL REQUESTS
	 	 	18	 
	 
	 	 	 	 
	Section 5.01. Conditions Applicable to All Requests
	 	 	18	 
	Section 5.02. Conditions Precedent to Initial Advance
	 	 	19	 
	Section 5.03. Conditions Precedent to Future Advances
	 	 	20	 

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	 	 	Page	 
	Section 5.04. Conditions Precedent to Addition of an Additional Mortgaged
Property to the Collateral Pool
	 	 	21	 
	Section 5.05. Conditions Precedent to Release of Property from the Collateral Pool 

	 	 	22	 
	Section 5.06. Conditions Precedent to Substitution of a Substitute Mortgaged
Property into the Collateral Pool
	 	 	23	 
	Section 5.07. Conditions Precedent to Conversion
	 	 	24	 
	Section 5.08. Conditions Precedent to Termination of Credit Facility
	 	 	25	 
	Section 5.09. Opinion Relating to Advance Request, Addition Request, Conversion
Request, or Substitution Request
	 	 	25	 
	Section 5.10. Delivery of Property-Related Documents
	 	 	25	 
	Section 5.11. Conditions Precedent to Letters of Credit
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 6 REPRESENTATIONS AND WARRANTIES
	 	 	28	 
	 
	 	 	 	 
	Section 6.01. Representations and Warranties of Borrower
	 	 	28	 
	Section 6.02. Representations and Warranties of Lender
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 7 AFFIRMATIVE COVENANTS OF BORROWER
	 	 	28	 
	 
	 	 	 	 
	Section 7.01. Compliance with Agreements
	 	 	29	 
	Section 7.02. Maintenance of Existence
	 	 	29	 
	Section 7.03. Maintenance of REIT Status
	 	 	29	 
	Section 7.04. Financial Statements; Accountants’ Reports; Other Information
	 	 	29	 
	Section 7.05. Confidentiality of Certain Information
	 	 	32	 
	Section 7.06. Access to Records; Discussions With Officers and Accountants
	 	 	32	 
	Section 7.07. Certificate of Compliance
	 	 	33	 
	Section 7.08. Maintain Licenses
	 	 	33	 
	Section 7.09. Inform Lender of Material Events
	 	 	33	 
	Section 7.10. Compliance with Applicable Laws
	 	 	34	 
	Section 7.11. Alterations to the Mortgaged
Properties
	 	 	34	 
	Section 7.12. Loan Document Taxes
	 	 	35	 
	Section 7.13. Further Assurances
	 	 	35	 
	Section 7.14. Transfer of Ownership Interests in Borrower and Guarantor
	 	 	36	 
	Section 7.15. Transfer of Ownership of Mortgaged Property
	 	 	38	 
	Section 7.16. Change in Senior Management
	 	 	40	 
	Section 7.17. Date-Down Endorsements
	 	 	40	 
	Section 7.18. Ownership of Mortgaged Properties
	 	 	41	 
	Section 7.19. Change in Property Manager
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 8 INTENTIONALLY DELETED
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 9 NEGATIVE COVENANTS OF BORROWER AND GUARANTOR
	 	 	41	 
	 
	 	 	 	 
	Section 9.01. Other Activities
	 	 	41	 
	Section 9.02. Liens
	 	 	42	 

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	 	 	Page	 
	Section 9.03. Indebtedness
	 	 	42	 
	Section 9.04. Principal Place of Business
	 	 	42	 
	Section 9.05. Condominiums
	 	 	42	 
	Section 9.06. Restrictions on Distributions
	 	 	42	 
	Section 9.07. Conduct of Business
	 	 	42	 
	Section 9.08. Ownership of Property
	 	 	42	 
	 
	 	 	 	 
	ARTICLE 10 FEES
	 	 	43	 
	 
	 	 	 	 
	Section 10.01. Unused Capacity; Unused Capacity Fee
	 	 	43	 
	Section 10.02. Origination Fees
	 	 	43	 
	Section 10.03. Due Diligence Fees
	 	 	43	 
	Section 10.04. Legal Fees and Expenses
	 	 	44	 
	Section 10.05. Failure to Close any Request
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 11 EVENTS OF DEFAULT
	 	 	45	 
	 
	 	 	 	 
	Section 11.01. Events of Default
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 12 REMEDIES
	 	 	47	 
	 
	 	 	 	 
	Section 12.01. Remedies; Waivers
	 	 	47	 
	Section 12.02. Waivers; Rescission of Declaration
	 	 	48	 
	Section 12.03. Lender’s Right to Protect Collateral and Perform Covenants and
Other Obligations
	 	 	48	 
	Section 12.04. No Remedy Exclusive
	 	 	48	 
	Section 12.05. No Waiver
	 	 	48	 
	Section 12.06. No Notice
	 	 	49	 
	 
	 	 	 	 
	ARTICLE 13 INSURANCE, REAL ESTATE TAXES AND REPLACEMENT
RESERVES
	 	 	49	 
	 
	 	 	 	 
	Section 13.01. Insurance and Real Estate Taxes
	 	 	49	 
	Section 13.02. Replacement Reserves
	 	 	49	 
	 
	 	 	 	 
	ARTICLE 14 LIMITS ON PERSONAL LIABILITY
	 	 	49	 
	 
	 	 	 	 
	Section 14.01. Personal Liability to Borrower
	 	 	49	 
	Section 14.02. Additional Borrowers
	 	 	50	 
	Section 14.03. Borrower Agency Provisions
	 	 	51	 
	Section 14.04. Waivers With Respect to Other Borrower Secured Obligation (for
Mortgaged Properties located in California)
	 	 	52	 
	Section 14.05. Joint and Several Obligation; Cross-Guaranty
	 	 	56	 
	Section 14.06. No Impairment
	 	 	56	 
	Section 14.07. Election of Remedies
	 	 	56	 
	Section 14.08. Subordination of Other Obligations
	 	 	57	 
	Section 14.09. Insolvency and Liability of Other Borrower
	 	 	58	 

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	 	 	Page	 
	Section 14.10. Preferences, Fraudulent Conveyances, Etc.
	 	 	58	 
	Section 14.11. Maximum Liability of Each Borrower
	 	 	59	 
	Section 14.12. Liability Cumulative
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 15 MISCELLANEOUS PROVISIONS
	 	 	59	 
	 
	 	 	 	 
	Section 15.01. Counterparts
	 	 	59	 
	Section 15.02. Amendments, Changes and Modifications
	 	 	60	 
	Section 15.03. Payment of Costs, Fees and Expenses
	 	 	60	 
	Section 15.04. Payment Procedure
	 	 	61	 
	Section 15.05. Payments on Business Days
	 	 	61	 
	Section 15.06. Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial
	 	 	61	 
	Section 15.07. Severability
	 	 	62	 
	Section 15.08. Notices
	 	 	63	 
	Section 15.09. Further Assurances and Corrective Instruments
	 	 	64	 
	Section 15.10. Term of this Agreement
	 	 	65	 
	Section 15.11. Assignments; Third-Party Rights
	 	 	65	 
	Section 15.12. Headings
	 	 	65	 
	Section 15.13. General Interpretive Principles
	 	 	65	 
	Section 15.14. Interpretation
	 	 	66	 
	Section 15.15. Standards for Decisions, Etc.
	 	 	66	 
	Section 15.16. Decisions in Writing
	 	 	66	 
	Section 15.17. Approval of Waivers
	 	 	66	 
	Section 15.18. USA Patriot Act
	 	 	67	 
	Section 15.19. All Asset Filings
	 	 	67	 
	Section 15.20. Recitals
	 	 	67	 

Colonial/PNC ARCS — Master Credit Facility Agreement

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EXHIBITS

	 	 	 
	EXHIBIT A

	 	Schedule of Initial Mortgaged Properties and Initial Valuations
	EXHIBIT B-l

	 	Fixed Facility Note (Standard Maturity)
	EXHIBIT B-2

	 	Fixed Facility Note (Fixed+1 Maturity)
	EXHIBIT C-l

	 	Variable Facility Note (SARM One-Month LIBOR)
	EXHIBIT C-2

	 	Variable Facility Note (SARM Three-Month LIBOR)
	EXHIBIT D

	 	Interest Rate Cap Security, Pledge and Assignment Agreement (Cap Security Agreement)
	EXHIBIT E-l

	 	Guaranty
	EXHIBIT E-2

	 	Confirmation of Guaranty
	EXHIBIT F

	 	Compliance Certificate
	EXHIBIT G-l

	 	Organizational Certificate (Borrower)
	EXHIBIT G-2

	 	Organizational Certificate (Guarantor)
	EXHIBIT H

	 	Conversion Request
	EXHIBIT I

	 	Rate Form
	EXHIBIT J

	 	Certificate of Borrower Parties
	EXHIBIT K

	 	Advance Request
	EXHIBIT L

	 	Request (Addition/Release/Substitution)
	EXHIBIT M

	 	Confirmation of Obligations
	EXHIBIT N

	 	Credit Facility Termination Request
	EXHIBIT O

	 	Form of Letter of Credit
	 
	 	 
	APPENDIX I

	 	Definitions

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v

 

MASTER CREDIT FACILITY AGREEMENT

     THIS MASTER CREDIT FACILITY AGREEMENT (this “Agreement”) is made as of the 27th day
of February, 2009, by and among (i) (a) CMF 15 PORTFOLIO LLC, a Delaware limited liability
company, and (b) such Additional Borrowers as may from time to time become borrowers under this
Agreement (individually and collectively, “Borrower”), (ii) COLONIAL REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership (“Guarantor”), and (iii) PNC ARCS LLC, a
Delaware limited liability company (“Lender”).

RECITALS

     A. Borrower owns one (1) or more Multifamily Residential Properties (unless
otherwise defined or the context clearly indicates otherwise, capitalized terms shall have
the
meanings ascribed to such terms in Appendix I of this Agreement) as more particularly
described
in Exhibit A to this Agreement.

     B. Borrower has requested that Lender establish a $350,000,000 Credit Facility in favor of Borrower.

     C. To secure the obligations of Borrower under this Agreement and the other Loan
Documents issued in connection with the Credit Facility, Borrower shall create a Collateral
Pool
in favor of Lender. The Collateral Pool shall be comprised of (i) certain Multifamily
Residential
Properties owned by Borrower or any Additional Borrower and (ii) any other collateral pledged to Lender from time to time by any Borrower or Additional Borrower pursuant to this Agreement
or any other Loan Documents. As of the Initial Closing Date, the Collateral Pool shall consist
of
the Mortgaged Properties listed on Exhibit A.

     D. Each Note and Security Document shall be cross-defaulted (i.e., a default under any Note, Security Document, or under this Agreement, shall constitute a default under each
Note, Security Document, and this Agreement) and cross-collateralized (i.e., each
Security
Instrument shall secure all of Borrower’s obligations under this Agreement and the other Loan
Documents) and it is the intent of the parties to this Agreement that Lender may accelerate
any
Note without the obligation, but the right 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 obligation (but with the right) 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 to
the
Obligations as determined by Lender in its sole and absolute discretion.

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

Colonial/PNC ARCS — Master Credit Facility Agreement

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     NOW, THEREFORE, Borrower and Lender, in consideration of the mutual promises and agreements
contained in this Agreement, hereby agree as follows:

ARTICLE 1

THE COMMITMENT

     Section 1.01. The Commitment.

     Subject to the terms, conditions and limitations of this Agreement:

     (a) Commitment Amount; No Increase. The amount of the Commitment is $350,000,000. As
of the Initial Closing Date, the amount advanced under the Fixed Facility Commitment is
$350,000,000 and the amount advanced under the Variable Facility Commitment is $0. Subject to the
terms and conditions of this Agreement, including without limitation Section 1.10,
Borrower may obtain Future Advances in accordance with Section 1.01(b) and (c) for the
remainder of the Commitment not advanced on the Initial Closing Date. Notwithstanding anything to
the contrary contained in this Agreement, Borrower shall have no right to increase the amount of
the Commitment (except for an increase in the Fixed Commitment pursuant to a conversion under
Section 1.06 of this Agreement).

     (b) Variable Facility Commitment. Subject to the terms and conditions of this
Agreement, including without limitation Section 1.10, Lender agrees to make SARM Variable
Advances to Borrower from time to time during the Variable Facility Availability Period. The
aggregate principal balance of the Variable Advances Outstanding at any time shall not exceed the
Variable Facility Commitment. The repayment of a Variable Advance shall permanently reduce the
Variable Facility Commitment by the original principal amount of such Variable Advance. Borrower
may not re-borrow any part of any Variable Advance which it has previously borrowed and repaid. No
Advances shall be made as a result of increases in the Debt Service Coverage Ratio or decreases in
the Loan to Value Ratio of any Mortgaged Property.

     (c) Fixed Facility Commitment. Subject to the terms and conditions of this Agreement,
including without limitation Section 1.10, Lender agrees to make Fixed Advances to Borrower
from time to time during the Fixed Facility Availability Period. The aggregate original principal
amount of the Fixed Advances Outstanding shall not exceed the Fixed Facility Commitment. The
repayment of a Fixed Advance shall permanently reduce the Fixed Facility Commitment by the original
principal amount of such Fixed Advance. Borrower may not re-borrow any part of any Fixed Advance
which it has previously borrowed and repaid. No Advance shall be made as a result of increases in
the Debt Service Coverage Ratio or decreases in the Loan to Value Ratio of any Mortgaged Property.

     Section 1.02. Requests for Advances.

     Borrower shall request an Advance by giving Lender an Advance Request in accordance with
Section 2.03. The Advance Request shall indicate whether the Request is for a Fixed
Advance, a Variable Advance, or both.

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2

 

     Section 1.03. Maturity Date of Advances; Amortization; Prepayment.

     (a) Variable Advances.

          (i) Maturity Date of SARM Variable Advances. Borrower may request a SARM Variable
Advance during the Variable Facility Availability Period. The maturity date of each SARM Variable
Advance shall be specified by Borrower for such SARM Variable Advance, provided that such maturity
date shall be no earlier than the date that is the first day of the month following the date five
(5) years after the Closing Date of such SARM Variable Advance, and no later than the date that is
the first day of the month following the date ten (10) years after the Closing Date of such
Advance, provided that the maturity date of any SARM Variable Advance shall not be later than the
first day of the month following the date ten (10) years after the Initial Closing Date.

          (ii) Interest Only; Amortization of Variable Advances. Amortization and interest only
payments for Variable Advances shall be as follows:

          (A) for a term of up to seven (7) years, all payments shall include amortization;

          (B) for a term of between seven (7) years but less than ten (10) years, the first five
(5) years shall be interest only payments and the remainder of the term shall include
amortization; and

          (C) for a term of ten (10) years, the entire term shall be interest only payments and
shall not require amortization.

All references to amortization in this Section 1.03(a)(ii) shall mean an amount necessary
to fully amortize the original principal amount of the Variable Advance over the Amortization
Period.

          (iii) Adjustable Rate LIBOR Options for SARM Variable Advance. At such time as
Borrower elects any SARM Variable Advance, Borrower shall elect an Adjustable Rate based on either
(A) One-Month LIBOR, as more specifically set forth in the applicable Variable Facility Note, the
form of which is attached as Exhibit C-l to this Agreement, or (B) Three-Month LIBOR, as
more specifically set forth in the Variable Facility Note, the form of which is attached as
Exhibit C-2 to this Agreement.

          (iv) Prepayment of Variable Advances. Subject to the terms and conditions of
Section 3.04(d), Borrower may prepay all or a portion of any Variable Advance pursuant to
the prepayment provisions of the applicable Variable Facility Note. Any repaid Variable Advances
shall automatically result in a reduction of the Variable Facility Commitment.

     (b) Fixed Advances.

          (i) Maturity Date of Fixed Advances. Subject to the terms of Section 1.03(c),
Borrower may request a Fixed Advance during the Fixed Facility Availability Period. The
maturity date of any Fixed Advance shall be specified by Borrower for such Fixed Advance,

Colonial/PNC ARCS — Master Credit Facility Agreement

3

 

provided that such maturity date shall be no earlier than the date that is the first day of the
month following the date five (5) years after the Closing Date of such Fixed Advance and not later
than the first day of the month following the date ten (10) years after the Closing Date of such
Fixed Advance, provided that the maturity date of any Fixed Advance shall not be later than the
first day of the month following the date ten (10) years after the Initial Closing Date.

          (ii) Interest Only; Amortization of Fixed Advances. Amortization and interest only
payments for Fixed Advances shall be as follows:

          (A) for a term of up to seven (7) years, all payments shall include amortization;

          (B) for a term of between seven (7) years but less than ten (10) years, the first five
(5) years shall be interest only payments and the remainder of the term shall include
amortization; and

          (C) for a term of ten (10) years, the entire term shall be interest only payments and
shall not require amortization.

All references to amortization in this Section 1.03(b)(ii) shall mean an amount necessary
to fully amortize the original principal amount of the Fixed Advance over the Amortization Period.

          (iii) Prepayment of Fixed Advances. Subject to the terms and conditions of Section
3.04(d), Borrower may prepay all or a portion of any Fixed Advance pursuant to the prepayment
provisions of the Fixed Facility Note. Any repaid Fixed Advances shall automatically result in a
reduction of the Fixed Facility Commitment.

     (c) Fixed Advance Executions. At such time as Borrower elects any Fixed Advance,
Borrower shall select either:

          (i) a Fixed Advance with a fixed rate term that matures not earlier than the date that is the
first day of the month following the date five (5) years after the Closing Date of such Fixed
Advance, and not later than the date that is the first day of the month following the date ten
(10) years after the Closing Date of such Fixed Advance, provided that no final maturity date of
any Fixed Advance shall be later than the date that is the first day of the month following the
date ten (10) years after the Initial Closing Date (the “Fixed Standard Yield Maintenance
Maturity Option”) as more specifically set forth in the Fixed Facility Note, the form of which
is attached as Exhibit B-l to this Agreement, or

          (ii) a Fixed Advance with an initial fixed rate term with an initial maturity date that is
not earlier than the first day of the month following the date five (5) years after the Closing
Date and not later than the first day of the month following the date that is nine (9) years after
the Closing Date which initial maturity date is automatically followed by a 1-year adjustable rate
term, such that the Fixed Advance has a final maturity date that is not earlier than the first day
of the month following the date six (6) years and not later than the first day of the month
following the date that is ten (10) years after the Closing Date of such Fixed Advance, provided
that no final maturity date of any Fixed Advance shall be later than the date that is the

Colonial/PNC ARCS — Master Credit Facility Agreement

4

 

first day of the month following the date ten (10) years after the Initial Closing Date (the
“Fixed+1 Maturity Option”) as more specifically set forth in the Fixed Facility Note, the
form of which is attached as Exhibit B-2 to this Agreement.

     (d) Extended Rate Lock. Borrower shall be permitted to rate lock any Fixed Advance
subject to the requirements of Fannie Mae’s “Extended Rate Lock” program. If Borrower elects to
rate lock a Fixed Advance pursuant to the Extended Rate Lock program, Borrower shall execute an
ERL rate lock commitment provided by Lender and an Extended Rate Lock Borrower Certification (the
“ERL Certification”) in the form required by Fannie Mae for the DUS Extended Rate Lock
Product, modified as acceptable to Fannie Mae to take into account the terms of this Agreement,
evidencing the terms of the Fixed Advance. At the time Borrower executes the ERL Commitment,
Borrower shall select the maturity option for such Fixed Advance as set forth in Section
1.03(c) above.

     Section 1.04. Interest on Advances.

     (a) Partial Month Interest on Fixed Advances or SARM Variable Advances.
Notwithstanding anything to the contrary in this 
Section 1.04(a), if a Fixed Advance or
SARM Variable Advance is not made on the first day of a calendar month, Borrower shall pay
interest on the original stated principal amount of such Advance for the partial month period
commencing on the Closing Date for such Advance and ending on the last day of the calendar month
in which the Closing Date occurs. Borrower shall pay interest for such partial month on any such
Advance at a rate per annum equal to the greater of (i) the interest rate described in the
applicable Note, and (ii) a rate determined by Lender, based on Lender’s cost of funds and
approved in advance, in writing, by Borrower.

     (b) Variable Advances.

          (i) Interest Rate on SARM Variable Advances. Interest shall accrue on the unpaid
balance of a SARM Variable Advance from the date such Advance is made at the Adjustable Rate.
Interest accrued through the end of each month shall be payable two (2) Business Days before the
first day of the following month as more particularly set forth in the applicable Variable Facility
Note. The Adjustable Rate shall change on each Rate Change Date until the Advance is repaid in
accordance with the applicable Variable Facility Note. Interest payments for SARM Variable Advances
shall be calculated on an actual/360 basis.

          (ii) Variable Facility Fee. Borrower shall pay monthly installments of the Variable
Facility Fee to Lender for each SARM Variable Advance Outstanding from the Closing Date of any SARM
Variable Advance to its maturity date. The Variable Facility Fee shall be payable in accordance
with the terms of the Variable Facility Note.

     (c) Interest on Fixed Advances.

          (i) Annual Interest Rate. Each Fixed Advance shall bear interest at a rate, per annum,
equal to the sum of (A) the Cash Interest Rate for such Fixed Advance and (B) the Fixed Facility
Fee. Interest payments for Fixed Advances shall be calculated on an actual/360 basis.

Colonial/PNC ARCS — Master Credit Facility Agreement

5

 

          (ii) Fixed Facility Fee on Fixed Advances. In addition to paying the partial month
interest, if any, as described above, Borrower shall pay monthly installments of the Fixed
Facility Fee to Lender for each Fixed Advance from the Closing Date of such Fixed Advance to its
maturity date. The Cash Interest Rate and the Fixed Facility Fee shall be payable in arrears, in
accordance with the terms of the Fixed Facility Note. The first installment shall be payable on or
prior to the Closing Date of such Fixed Advance. The second installment shall be payable on the
first day of each calendar month, commencing on the first day of the second full calendar month of
such Fixed Advance, to its maturity date. Each installment of the Fixed Facility Fee shall be in
an amount equal to the product of (A) the Fixed Facility Fee, multiplied by (B) the Outstanding
principal balance of the Fixed Advance, multiplied by (C) 1/12.

     Section 1.05. Notes.

     (a) Variable Advances. The obligation of Borrower to repay each Variable Advance
shall be evidenced by a separate Variable Facility Note in the form attached to this Agreement as
Exhibit C-l or Exhibit C-2. Each Variable Facility Note shall be payable to the
order of Lender and shall be made in the original principal amount of such Variable Facility
Advance.

     (b) Fixed Advances. The obligation of Borrower to repay each Fixed Advance shall be
evidenced by a separate Fixed Facility Note. Each Fixed Facility Note shall be payable to the
order of Lender and shall be made in the original principal amount of such Fixed Advance.

     Section 1.06. Conversion of SARM Variable Advances to Fixed Advances.

     (a) Right to Convert. Subject to the terms and conditions of this Agreement,
including without limitation Section 1.10, Borrower shall have the right, from time to
time during the Conversion Availability Period, to convert all or any portion of a SARM Variable
Advance on the first day of a month to a Fixed Advance. The Variable Facility Commitment shall be
reduced by, and the Fixed Facility Commitment shall be increased by the amount of the converted
Advance.

     (b) Request. To convert one or more SARM Variable Advances, or a portion thereof, to
one or more Fixed Advances, Borrower shall deliver a Conversion Request to Lender which shall
designate the amount of the Variable Advance to be converted.

     (c) Closing. Subject to Section 1.07 and provided that all conditions
contained in Section 1.08 are satisfied, Lender shall permit the requested conversion to
close at offices designated by Lender on a Closing Date selected by Lender, on a date that is not
earlier than thirty (30) Business Days after Lender’s receipt of the Conversion Request (or on such
other date as Borrower and Lender may agree). At the closing, Lender and Borrower shall execute and
deliver, at the sole cost and expense of Borrower, in form and substance reasonably satisfactory to
Lender, the Conversion Documents.

     Section 1.07. Limitations on Right to Convert to Fixed Advances.

     Borrower’s right to convert one (1) or more Variable Advances to one (1) or more Fixed
Advances is subject to the following limitations:

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     (a) Closing Date. With respect to SARM Variable Advances, the Closing Date shall
occur during the Conversion Availability Period on the first day of a month.

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

     Section 1.08. Conditions to Conversion.

     The conversion of one (1) or more SARM Variable Advances to one (1) or more Fixed Advances is
subject to the satisfaction on or before the Closing Date, of all applicable conditions contained
in Section 5.01 and Section 5.07.

     Section 1.09. Interest Rate Protection.

     (a) To protect against fluctuations in interest rates during the term, pursuant to the terms
of the Cap Security Agreement, Borrower shall make arrangements for a LIBOR-based hedge instrument
(“Interest Rate Cap”) to be in place at the Strike Rate set forth in the Cap Security
Agreement and maintained at all times with respect to any portion of the Variable Facility
Commitment which has been funded and remains Outstanding. The seller of the Interest Rate Cap
(seller and its transferees and assigns, the “Counterparty”) shall be a financial
institution meeting the minimum requirements for hedge counterparties reasonably and customarily
acceptable to Lender. An Interest Rate Cap shall be documented on a form acceptable to Lender. As
set forth in the applicable Cap Security Agreement, Borrower agrees to pledge its right, title and
interest in the Interest Rate Cap to Lender as additional collateral for the Indebtedness. The
Interest Rate Cap shall have a minimum initial term of five (5) years.

     (b) In the event that an Interest Rate Cap is no longer deemed “approved” by Lender, for
reasons including but not limited to, (i) a termination, transfer or consent to transfer of an
Interest Rate Cap, (ii) the occurrence of a “Termination Event” as that term is defined in each
Interest Rate Cap, or (iii) Lender’s determination that the Counterparty on such Interest Rate Cap
no longer meets its minimum requirements for hedge counterparties, such Interest Rate Cap shall no
longer be deemed approved and shall no longer serve to satisfy the requirements of this Section
1.09. If an Interest Rate Cap is determined by Lender not to satisfy the requirements of this
Section 1.09, or if an Interest Rate Cap unexpectedly and unavoidably terminates on a date
other than its scheduled expiration date, the Borrower shall, within ten (10) days of such
termination, obtain a new Interest Rate Cap satisfying the requirements of this Agreement.

     Section 1.10. Limitation on All Advances.

     Notwithstanding anything in this Agreement or any other Loan Document to the contrary, any
Future Advance, whether a Variable Advance or a Fixed Advance, and any conversion of an Advance or
any refinance of an Advance shall be subject to the precondition that Lender must confirm with
Fannie Mae that Fannie Mae is generally offering to purchase in the marketplace Advances of the
execution type requested by Borrower at the time of the Request and at the time of the Rate
Setting Date for the requested Advance. In the event Fannie Mae is not purchasing Advances of the
type requested by Borrower, Lender agrees to offer, to the extent available from

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Fannie Mae, alternative Advance executions based on the types of executions Fannie Mae is
generally offering to purchase in the marketplace at that time.

ARTICLE 2

THE ADVANCES

     Section 2.01. Rate Setting for an Advance.

     Rates for an Advance shall be set in accordance with the following procedures:

     (a) Preliminary, Nonbinding Quote. At Borrower’s request Lender shall quote an
estimate of the Cash Interest Rate (for a proposed Fixed Advance) or the Adjustable Rate (for a
proposed SARM Variable Advance). Lender’s quote shall be based on (i) the rate quoted by Fannie
Mae in the case of a proposed SARM Variable Advance or Fixed Advance, and (ii) the proposed terms
and amount of the Advance selected by Borrower. The quote shall not be binding upon Lender.

     (b) Rate Setting. If Borrower satisfies all of the conditions to Lender’s obligation
to make an Advance, then Borrower may request that Lender submit to Borrower a completed draft Rate
Form. The draft Rate Form shall be in the form of Exhibit I attached to this Agreement. If
the draft Rate Form is approved by Borrower, Borrower shall execute and return the approved draft
Rate Form to Lender before 1:00 p.m. Eastern Standard Time or Eastern Daylight Savings Time, as
applicable, on any Business Day (“Rate Setting Date”).

     (c) Rate Confirmation. In the case of SARM Variable Advances or Fixed Advances,
within one (1) Business Day after receipt of the draft Rate Form executed by Borrower, Lender
shall seek to obtain the Commitment from Fannie Mae for the purchase of the proposed SARM Variable
Advance or Fixed Advance having the terms described in the related draft Rate Form. If Lender
obtains a Commitment on terms equivalent (or better than) the terms in the draft Rate Form, Lender
shall then complete and sign the Rate Form thereby confirming the terms set forth therein and
shall immediately deliver the confirmed Rate Form to Borrower.

     Section 2.02. Breakage and Other Costs.

     If Lender obtains, and then fails to fulfill, the Commitment because the Advance is not made
(for a reason other than Lender’s default), Borrower shall pay all reasonable out-of-pocket costs
payable to the potential investor and other reasonable costs, fees and damages incurred by Lender
in connection with its failure to fulfill the Commitment. Lender reserves the right to require
Borrower to post a deposit at the time the Commitment is obtained. Such deposit shall be refunded
to Borrower upon the purchase of the Note by Fannie Mae.

     Section 2.03. Advances.

     Borrower may deliver an Advance Request to Lender.

     (a) Initial Advance. If the Advance Request is to obtain the Initial Advance and all
conditions precedent contained in Section 5.02 and the General Conditions contained
in Section

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5.01 are satisfied on or before the Initial Closing Date for the Initial Advance, Lender
shall make the Initial Advance on the Initial Closing Date or on such other date as Borrower and
Lender may agree.

     (b) Future Advance. If the Advance Request is to obtain a Future Advance, such
Advance Request shall be in the minimum amount of $5,000,000. If all conditions precedent
contained in Section 5.03 and the General Conditions contained in Section 5.01 are
satisfied, Lender shall make the requested Future Advance, at a closing to be held at offices
reasonably designated by Lender on a Closing Date reasonably selected by Lender, which date shall
be not more than three (3) Business Days after Borrower’s receipt from Lender of the confirmed
Rate Form (or on such other date as Borrower and Lender may agree).

     Section 2.04. Determination of Allocable Facility Amount and Valuations.

     (a) Initial Determinations. On the Initial Closing Date, Lender shall determine (i)
the Allocable Facility Amount and Valuation for each Initial Mortgaged Property, (ii) the
Aggregate Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio, and (iii) the Advance
Amount. The determinations made as of the Initial Closing Date shall remain unchanged until the
First Anniversary. Changes in the Allocable Facility Amount, Valuations, the Aggregate Debt
Service Coverage Ratio and the Aggregate Loan to Value Ratio shall be made pursuant to Section
2.04(b).

     (b) Monitoring Determinations. Once each Calendar Quarter, or, if the Commitment
consists only of a Fixed Facility Commitment that has an Aggregate Debt Service Coverage Ratio
equal to or greater than 1.25:1.0, once each Calendar Year, within twenty (20) Business Days after
Borrower has delivered to Lender the reports required in Section 7.04, Lender shall
determine the Aggregate Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio, the
Valuations and the Allocable Facility Amounts and whether Borrower is in compliance with the other
covenants set forth in the Loan Documents. After the First Anniversary, Lender shall redetermine
Allocable Facility Amounts and Valuations (i) quarterly, or (ii) if the Commitment consists only of
a Fixed Facility Commitment that has an Aggregate Debt Service Coverage Ratio equal to or greater
than 1.25:1.0, annually, or (iii) at such other time if Lender reasonably determines that changed
market or property conditions warrant, Lender shall also redetermine Allocable Facility Amounts to
take account of any addition, release or substitution of Collateral or other event that invalidates
the outstanding determinations. In determining Valuations, Lender shall use Cap Rates in its sole
and absolute discretion based on its internal survey and analysis of Cap Rates for comparable sales
in the vicinity of the Mortgaged Property, with such adjustments as Lender deems appropriate and
without any obligation to use any information provided by Borrower. If Lender is unable to
determine a Cap Rate for a Mortgaged Property, Lender shall have the right, not more than once
annually, to obtain, at Borrower’s expense, a market study in order to establish a Cap Rate. Lender
shall promptly disclose its determinations to Borrower. Until redetermined, the outstanding
Allocable Facility Amounts and Valuations determined by Lender shall remain in effect.
Notwithstanding anything in this Agreement to the contrary, no change in Allocable Facility
Amounts, Valuations, the Aggregate Loan to Value Ratio or the Aggregate Debt Service Coverage Ratio
shall, (A) result in a Potential Event of Default or Event of Default, or (B) require the
prepayment of any Advances.

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     Section 2.05. Additional Financing.

     During the period beginning on the First
Anniversary and ending on the Fifth Anniversary, not
more than one (1) time per year and not more than three (3) total times during such period,
Borrower may request additional financing, without adding any additional properties to the
Collateral Pool (each such loan, a “Additional Loan”). Any such Additional Loan will be
made in Lender and Fannie Mae’s sole discretion and subject to all of Fannie Mae’s requirements
and guidelines in effect at the time of the request. Once made, any Additional Loan will be deemed
an Advance and subject to this Agreement and will be secured by the Mortgaged Properties. Borrower
agrees to pay any fees that may be charged in connection with a Additional Loan.

     Section 2.06. Increase in Commitment.

     Borrower shall have no right under this Agreement to increase the Commitment.

ARTICLE 3

COLLATERAL CHANGES

     Section 3.01. Right to Add Collateral.

     Subject to the terms and conditions of this Article 3, Borrower shall have the right,
from time to time during the Term of this Agreement, to add Multifamily Residential Properties to
the Collateral Pool.

     Section 3.02. Procedure for Adding Collateral.

     The procedure for adding Multifamily Residential Properties to the Collateral Pool contained
in this Section 3.02 shall apply to all additions of Mortgaged Property including, but not
limited to, additions of Mortgaged Property in connection with substitutions of Mortgaged Property.

     (a) Request. From time to time Borrower may deliver to Lender an Addition Request
to add one (1) or more Multifamily Residential Properties to the Collateral Pool (the
“Addition”). Each Addition Request shall be accompanied by the following: (i) the
property- related information required by Lender, and (ii) the payment of all Additional Collateral Due
Diligence Fees.

     (b) Underwriting.

          (i) Borrower may add an Additional Mortgaged Property provided that:

          (A) the Additional Mortgaged Property itself meets the Individual
Property Coverage and LTV Tests,

          (B) after such Addition, the Coverage and LTV Tests are satisfied,

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          (C) the Addition will not adversely affect the geographical diversity of
the Collateral Pool, as determined by Lender in its reasonable discretion, and

          (D) all other terms and conditions set forth in this Agreement are
satisfied.

Notwithstanding the foregoing, if either the Individual Property Coverage and LTV Tests or the
Coverage and LTV Tests is not satisfied after the Addition of a proposed Additional Mortgaged
Property, such Addition may be permitted by Lender in its sole discretion, based on factors that
are not in conflict with Lender’s Underwriting Requirements, including but not limited to the then
current Valuation of the Mortgaged Properties, the then current Aggregate Debt Service Coverage
Ratio, the then current Aggregate Loan to Value Ratio, the strength of Guarantor, the quality of
the market where the proposed Additional Mortgaged Property is located, and the geographic
distribution of the Mortgaged Properties at that time.

          (ii) Lender shall evaluate the proposed Additional Mortgaged Property in accordance with the
Underwriting Requirements, including an exit analysis performed by Lender and acceptable to Fannie
Mae. Lender shall make underwriting determinations as to the Debt Service Coverage Ratio and the
Loan to Value Ratio of the proposed Additional Mortgaged Property and the Aggregate Debt Service
Coverage Ratio and the Aggregate Loan to Value Ratio applicable to the Collateral Pool on the basis
of the lesser of (A) the acquisition price of the proposed Additional Mortgaged Property if
purchased by Borrower within twelve (12) months of the related Addition Request, and (B) a
Valuation made with respect to the proposed Additional Mortgaged Property. Notwithstanding the
provisions of Section 2.04 regarding the recalculation of Valuations and the calculation of
Debt Service Coverage Ratios, for purposes of reviewing proposed Additional Mortgaged Properties,
if Lender reasonably determines market conditions have changed in a manner adversely affecting any
of the Mortgaged Properties since the determination of the then effective Aggregate Loan to Value
Ratio and Aggregate Debt Service Coverage Ratio, Lender may make new determinations of Aggregate
Debt Service Coverage Ratio and Aggregate Loan to Value Ratio for purposes of determining whether
to permit the addition of the projected Additional Mortgaged Property to the Collateral Pool.
Borrower shall promptly provide any information reasonably required by Lender to make the
determination required by the preceding sentence.

          (iii) After receipt of (A) the Addition Request and (B) all reports, certificates and
documents required by the Underwriting Requirements, Lender shall notify Borrower whether it has
determined whether the proposed Additional Mortgaged Property meets the conditions for an
Addition. If Lender determines that the proposed Additional Mortgaged Property meets the
conditions set forth in this Agreement, Lender shall set forth the Aggregate Debt Service Coverage
Ratio, the Aggregate Loan to Value Ratio, and the Advance Amount that Lender estimates shall
result from the Addition of the proposed Additional Mortgaged Property to the Collateral Pool.
Within ten (10) days after receipt of Lender’s written consent to the Addition Request, Borrower
shall notify Lender in writing whether it elects to add the proposed Additional Mortgaged Property
to the Collateral Pool. If Borrower fails to notify Lender of its election within the timeframe
stated, then the Request will be deemed withdrawn.

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     (c) Closing. If Lender determines that the proposed Additional Mortgaged
Property meets the conditions of Lender’s Underwriting Requirements and as set forth in this
Agreement, Borrower timely elects to add the proposed Additional Mortgaged Property to the
Collateral Pool, and all conditions precedent contained in Section 5.04 and all General
Conditions contained in Section 5.01 are satisfied, the proposed Additional Mortgaged
Property shall be added to the Collateral Pool, at a closing to be held at offices designated by
Lender on a Closing Date selected by Lender, occurring within sixty (60) Business Days after
Lender’s receipt of Borrower’s election (or on such other date as Borrower and Lender may agree).

     Section 3.03. Right to Obtain Releases of Collateral.

     Subject to the terms and conditions of this Article 3, Borrower shall have the right
from time to time to obtain a release of a Mortgaged Property from the Collateral Pool.

     Section 3.04. Procedure for Obtaining Releases of Collateral.

     (a) Request. To obtain a release of a Mortgaged Property from the Collateral Pool (a
“Release”), Borrower shall deliver a Release Request to Lender. The delivery of the
Release Request itself shall not result in a termination of all or any part of the Credit Facility;
however, any prepayments associated with such Release shall automatically result in a permanent
reduction of the Fixed Facility Commitment, which repaid amount shall not be available to be re-
borrowed, or, as applicable, a permanent reduction of the Variable Facility Commitment, which
repaid amount shall not be available to be re-borrowed.

     (b) Closing. As a condition precedent to the release of the Release Mortgaged
Property, the Aggregate Loan to Value Ratio and Aggregate Debt Service Coverage Ratio for the
proposed resulting Collateral Pool must be the better of (i) the Aggregate Loan to Value Ratio
and Aggregate Debt Service Coverage Ratio of the Collateral Pool immediately prior to the
release of the Release Mortgaged Property (and without giving effect to such release), or (ii)
the Coverage and LTV Tests. If Lender determines that all conditions precedent are satisfied,
including without limitation those in Section 5.01 and Section 5.05, Lender
shall cause the
Release Mortgaged Property to be released, at a closing to be held at offices designated by
Lender on a Closing Date selected by Lender, and occurring within thirty (30) days after
Lender’s receipt of the Release Request (or on such other date as Borrower and Lender may
agree), by executing and delivering, and causing all applicable parties to execute and
deliver, all at the sole cost and expense of Borrower, the Release Documents. At Lender’s option, Borrower
shall prepare the Release Documents and submit them to Lender for its review.

     (c) Release Price. Subject to the terms of this Section 3.04(c), the
“Release Price” for each Release Mortgaged Property means the greater of:

          (i) one hundred percent (100%) of the Allocable Facility Amount for the Release
Mortgaged Property, or

          (ii) one hundred percent (100%) of the amount of Advances Outstanding that are required
to be repaid by Borrower to Lender in connection with the proposed release of the

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Release Mortgaged Property from the Collateral Pool so that, immediately after the release
the condition precedent set forth in the first sentence of Section 3.04(b) is satisfied.

     In addition to the Release Price, Borrower shall pay to Lender all associated prepayment
premiums, accrued interest and other amounts due under the Notes evidencing the Advances being
repaid to and including the date such Advance may be repaid.

     (d) Application of Release Price.

          (i) The Release Price for the Release Mortgaged Property shall be applied against Outstanding
Advances in the order selected by Borrower, provided that (A) any Outstanding Advance which
Borrower elects to prepay must be prepaid in full or, if the Release Price is not sufficient to do
so, must be the only Advance partially prepaid; (B) such prepayment is permitted (for example, not
subject to a lock out period) under the applicable Note; (C) any prepayment premium due and owing
is paid; and (D) interest must be paid through the end of the month. If Borrower is unable to meet
the conditions set forth in (A) through (D), then the Release Price shall be
applied first against the Variable Advances Outstanding so long as the prepayment is permitted
under the Variable Facility Note, until there are no further Variable Advances Outstanding, then
against the prepayment of Fixed Advances Outstanding, so long as the prepayment is permitted under
the applicable Fixed Facility Note.

          (ii) In the event Borrower desires to release a Release Mortgaged Property on a date other
than the last day of the month for a Fixed Advance or a SARM Variable Advance, or in the event that
no Outstanding Advances may be prepaid under the terms of the applicable Note (for example, due to
a lock out period), the Release Price or the remainder of the Release Price, if any, shall be held
by Lender (or its appointed collateral agent) as substitute Collateral (“Substitute Cash
Collateral”), in accordance with a security agreement (if required by Lender) and other
documents in form and substance acceptable to Lender. Notwithstanding the foregoing, the release of
the Release Mortgaged Property may not be approved unless the aggregate Valuation of all Mortgaged
Properties remaining in the Collateral Pool is greater than Outstanding Advances. Any Substitute
Cash Collateral shall be used to prepay the applicable Advance once such prepayment is permitted.

     (e) Release of Borrower. Upon the Release of a Mortgaged Property, Borrower that
owns such Release Mortgaged Property shall automatically without further action be released
from its obligations under this Agreement and the other Loan Documents except for (i) any
liabilities or obligations of such Borrower which arose prior to the Closing Date of such
Release, and (ii) any Obligations that survive release as specifically set forth in
Section 18 (Environmental Hazards) of the Security Instrument.

     (f) Title Insurance. Notwithstanding the other provisions of this Section
3.04, no Release of any of the Mortgaged Properties shall be made unless 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 one hundred fifteen percent
(115%) of the Valuation of each of such remaining Mortgaged Properties (or such lesser amount
that is the maximum allowed by law or regulation).

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     (g) Geographic Diversity. Lender may reject a request to Release a Release
Mortgaged Property if such Release would adversely affect the geographical diversity of the
Collateral Pool, as determined by Lender in its sole discretion.

     Section 3.05. Substitutions.

     (a) Right to Substitute Collateral. Subject to the terms, conditions and limitations
of Article 3 and Article 5, Borrower shall have the right prior to the date
twelve (12) months before
the Termination Date to obtain the Release of one or more Release Mortgaged Properties from
the Collateral Pool by replacing such Release Mortgaged Property with one (1) or more
Additional Mortgaged Properties that meet the requirements of this Agreement (the
“Substitute Mortgaged Property”) thereby effecting a “Substitution” of Collateral.

     (b) Request. Borrower shall simultaneously deliver to Lender both a completed and
executed Addition Request (unless such Substitute Mortgaged Property has not been identified
by Borrower, in which case Borrower shall submit the Addition Request not less than thirty
(30) Calendar Days prior to the date on which Borrower desires to add such Substitute Mortgaged
Property, but not later than thirty (30) Calendar Days prior to the Property Delivery Deadline
(defined hereinafter)) and Release Request (together, the “Substitution Request”).
Each Substitution Request shall be accompanied by the following: (i) the information required by
the Underwriting Requirements with respect to the proposed Substitute Mortgaged Property and any
additional information Lender reasonably requests; and (ii) the payment of all Additional
Collateral Due Diligence Fees.

     (c) Underwriting. Borrower may add a Substitute Mortgaged Property to the
Collateral Pool provided that:

          (i) the Substitute Mortgaged Property itself meets the Individual Property Coverage and LTV
Tests,

          (ii) the market characteristics of the Substitute Mortgaged Property are at least as
favorable as the market characteristics of the Release Mortgaged Property, as determined by Lender
in its sole discretion,

          (iii) the Substitution will not adversely affect the geographical diversity of the Collateral
Pool, as determined by Lender in its sole discretion, and

          (iv) after the proposed Substitution, the Aggregate Loan to Value Ratio and Aggregate Debt
Service Coverage Ratio of the proposed resulting Collateral Pool must be the better of (A) the
Aggregate Loan to Value Ratio and Aggregate Debt Service Coverage Ratio of the Collateral Pool
immediately prior to the Substitution (and without giving effect to such Substitution), or (B) the
Coverage and LTV Tests.

Lender shall determine whether the proposed Substitute Mortgaged Property satisfies the
requirements for an Additional Mortgaged Property set forth in Section 3.02(b)(ii) and
Section 3.02(b)(iii). Within ten (10) days after receipt of Lender’s written consent to
the proposed Substitution, Borrower shall notify Lender in writing whether it elects to add the
proposed

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Substitute Mortgaged Property to the Collateral Pool and release the identified Mortgaged
Property. If Borrower fails to notify Lender of its election within the timeframe stated, then the
Request will be deemed withdrawn.

Notwithstanding the foregoing, if either the tests identified in Section 3.05(c)(i) or
(iv) are not satisfied after the Substitution of a proposed Substitute Mortgaged Property,
such Substitution may be permitted by Lender in its sole discretion, based on factors that are not
in conflict with Lender’s Underwriting Requirements, including but not limited to the then current
Valuation of the Mortgaged Properties, the then current Aggregate Debt Service Coverage Ratio, the
then current Aggregate Loan to Value Ratio, the strength of Guarantor, the quality of the market
where the proposed Substitute Mortgaged Property is located, and the geographic distribution of the
Mortgaged Properties at that time.

     (d) Closing. If, pursuant to this Section 3.05, Lender determines that the
conditions set forth herein for the Substitution of the proposed Substitute Mortgaged Property into the
Collateral Pool in replacement of the proposed Release Mortgaged Property, and Borrower
timely elects to cause such Substitution to occur and all conditions contained in this
Section 3.05 and Article 5 are satisfied, then the proposed Substitute Mortgaged Property shall be
substituted into the Collateral Pool in replacement of the proposed Release Mortgaged Property, at a
closing to be held at offices designated by Lender on a Closing Date selected by Lender, and occurring —

          (i) if the Substitution of the proposed Substitute Mortgaged Property is to occur
simultaneously with the release of the proposed Release Mortgaged Property, within thirty (30)
days after Lender’s receipt of Borrower’s election (or on such other date to which Borrower and
Lender may agree); or

          (ii) if the Substitution of the proposed Substitute Mortgaged Property is to occur subsequent
to the Release of the Release Mortgaged Property, within ninety (90) days after the effective date
of the release of such Release Mortgaged Property (provided such date does not exceed one hundred
eighty (180) days after Lender’s receipt of Borrower’s Release Request, unless otherwise agreed to
by Lender) (the “Property Delivery Deadline”); provided that on a case by case basis,
Lender may consent in its sole discretion to extend the Property Delivery Deadline by one (1)
additional ninety (90) day period.

     (e) Substitution Deposit.

          (i) The Deposit. If the Addition of the proposed Substitute Mortgaged Property is to
occur subsequent to the Release of the Release Mortgaged Property pursuant to Section
3.05(d), at the Closing Date of the Release of the Release Mortgaged Property, Borrower shall
deposit with Lender the “Substitution Deposit” described in Section 3.05(e)(ii) in
the form of cash or, in lieu of (and/or in addition to) depositing cash for the Substitution
Deposit, Borrower may post a Letter of Credit in accordance with the terms of Section 5.11
of this Agreement, having a face amount equal to the Substitution Deposit (or such lesser amount
that has been deposited in cash).

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          (ii) Substitution Deposit Amount. The “Substitution Deposit” for each
proposed Substitution shall be an amount equal to the sum of:

          (A) the Release Price relating to such proposed Release Mortgaged
Property, plus

          (B) any and all of the yield maintenance, fee maintenance or the
prepayment premium, as applicable, through the end of the month in which the Property
Delivery Deadline occurs as if the Fixed Advance or SARM Variable Advance were to
be prepaid in such month, plus

          (C) interest on such Advance through the end of the month in which
the Property Delivery Deadline occurs. Borrower shall also be obligated to make any
regularly scheduled payments of principal and interest due under the applicable Note
during any period between the closing of the Release Mortgaged Property and the earlier
of the closing of the Substitute Mortgaged Property and the date of prepayment of the
Note.

          (iii) Failure to Close Substitution. If the Addition of the proposed Substitute
Mortgaged Property does not occur by the Property Delivery Deadline in accordance with Section
3.05(d)(ii), then such Borrower shall have irrevocably waived its right to substitute such
Release Mortgaged Property with the proposed Substitute Mortgaged Property, and the release of the
Release Mortgaged Property shall be deemed to be a Release pursuant to Section 3.04 and
shall trigger a prepayment of the Note, and if applicable, together with all yield maintenance, fee
maintenance or prepayment premium then due in connection with such payment. The Property Delivery
Deadline shall be no later than the date ninety (90) days after the effective date Lender’s lien on
such Release Mortgaged Property is released. Any Advance being prepaid shall be deemed to be
prepaid as of the end of the month in which the Property Delivery Deadline falls with respect to a
Fixed Advance or a SARM Variable Advance. Lender shall follow standard Fannie Mae procedures for
the prepayment of the Note, including delivery of the Substitution Deposit, together with all yield
maintenance, fee maintenance, or prepayment premium, if any, then due, to Fannie Mae in accordance
with such procedures.

Borrower shall comply with the requirements set forth in Section 3.04(c) and Section
3.04(d) not previously satisfied with respect to the Release Mortgaged Property, including
payment of the Release Price. Such Release Price, or the applicable portion thereof, shall be
applied in the manner set forth in Section 3.04(d) and the Substitution Deposit delivered
by Borrower pursuant to Section 3.05(e) of this Agreement shall be returned to Borrower.
However, if Borrower fails to timely pay the Release Price, Lender may draw upon the Substitution
Deposit delivered by Borrower in satisfaction of such obligation.

          (iv) Substitution Deposit Disbursement. At closing of the Substitution, Lender shall
disburse or return the Substitution Deposit, as applicable, directly to Borrower at such time as
the conditions precedent for the Substitution have been satisfied, which must occur no later than
the Property Delivery Deadline. Notwithstanding the foregoing, in the event that Borrower adds an
Additional Mortgaged Property to the Collateral Pool prior to the Property Delivery

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Deadline but the Addition of such Additional Mortgaged Property has not in and of itself
satisfied the requirements to close the Substitution, the Substitution Deposit shall be reduced by
the Allocable Facility Amount of such Additional Mortgaged Property as determined by Lender, and
such reduction in the Substitution Deposit shall be returned to Borrower, or in the case of a
Letter of Credit, such Letter of Credit shall be reduced by such reduction in the Substitution
Deposit. If Borrower has not completely satisfied the requirements to close the Substitution by
the Property Delivery Deadline, the terms of Section 3.05(e)(iii) shall apply with respect
to the remaining Substitution Deposit.

     (f) Conditions Precedent to Substitutions. The obligation of Lender to make a
requested Substitution is also subject to Lender’s determination that each of the conditions
precedent for Additions of Additional Mortgaged Properties and Releases of Release Mortgaged
Properties set forth in Section 5.01 and Section 5.06 of this Agreement have
been satisfied.

     (g) Restriction on Borrowings. If the Addition of the Substitute Mortgaged Property
to the Collateral Pool and the release of the Release Mortgaged Property from the Collateral
Pool do not occur simultaneously (i.e., within thirty (30) days pursuant to Section 3.05(d)
above) then,
until the Addition of the Substitute Mortgaged Property to the Collateral Pool, the aggregate
principal balance of Advances Outstanding shall not exceed the amount of the (i) Advances
Outstanding immediately prior to the release of such Release Mortgaged Property minus (ii) the
Allocable Facility Amount of the Release Mortgaged Property. If the aggregate unpaid principal
balance of Advances Outstanding exceeds the amount resulting from subtracting (i) minus (ii)
in the preceding sentence, Borrower shall pay such excess amount as a condition precedent to any
Future Advances made under this Agreement and the Addition of a Substitute Mortgaged
Property. Any payment received by Lender under this Section 3.05 shall be applied
against Advances Outstanding in the manner prescribed for Release Prices pursuant to Section
3.04(c).

ARTICLE 4

TERMINATION OF FACILITIES

     Section 4.01. Right to Terminate Credit Facility.

     Subject to the terms and conditions of this Article 4, Borrower shall have the right
to terminate this Agreement and the Credit Facility and receive a Release of all of the
Collateral.

     Section 4.02. Procedure for Terminating Credit Facility.

     (a) Request. To terminate this Agreement and the Credit Facility, Borrower shall
deliver a Credit Facility Termination Request to Lender.

     (b) Closing. If Lender determines that all conditions precedent contained in
Section 5.08 are satisfied, this Agreement shall terminate, and Lender shall cause all of the
Collateral to be released, at a closing to be held at offices designated by Lender on a Closing Date
selected by Lender, within thirty (30) Business Days after Lender’s receipt of the Credit Facility
Termination
Request (or on such other date as Borrower and Lender may agree), by executing and delivering,
and causing all applicable parties to execute and deliver, all at the sole cost and expense of
Borrower, the Credit Facility Termination Documents.

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ARTICLE 5

CONDITIONS PRECEDENT TO ALL REQUESTS

     Section 5.01. Conditions Applicable to All Requests.

     The obligation of Lender to close the transaction requested in a Request (other than a Credit
Facility Termination Request made pursuant to Section 4.02) shall be subject to Lender’s
determination that all of the following general conditions precedent (“General
Conditions”) have been satisfied in addition to any other conditions precedent contained in
this Agreement:

     (a) Payment of Expenses. The payment by Borrower of Lender’s and Fannie Mae’s
reasonable third party out-of-pocket fees and expenses payable in accordance with this
Agreement, including, but not limited to, the legal fees and expenses described in Section
10.04.

     (b) No Material Adverse Effect. Except in connection with a Credit Facility
Termination Request, there has been no Material Adverse Effect on the financial condition or
business or prospects of Borrower or Guarantor or in the physical condition, operating
performance or value of any of the Mortgaged Properties since the date of the most recent
Compliance Certificate (or, with respect to the conditions precedent to the Initial Advance,
from the condition, business or prospects reflected in the financial statements, reports and other
information obtained by Lender during its review of Borrower and Guarantor and the Initial
Mortgaged Properties).

     (c) No Default. Except in connection with a Credit Facility Termination Request, (i)
there shall exist no Event of Default or Potential Event of Default on the Closing Date for
the Request, (ii) there shall never have been any monetary Event of Default involving the payment
of principal or interest due under any Loan Documents or any impound or reserve required to be
paid under the Loan Documents on or before the Closing Date for the Request, (iii) there shall
never have been any non-monetary defaults past any notice and grace periods under the Loan
Documents; and (iv) the closing of such Request shall not result in an Event of Default or
Potential Event of Default.

     (d) No Insolvency. Receipt by Lender on the Closing Date for the Request of
evidence satisfactory to Lender that neither Borrower nor Guarantor is insolvent (within the
meaning of any applicable federal or state laws relating to bankruptcy or fraudulent
transfers) or will be rendered insolvent by the transactions contemplated by the Loan Documents, including
the making of a Future Advance, or, after giving effect to such transactions, will be left
with an unreasonably small capital with which to engage in its business or undertakings, or will have
intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts
as they mature or will have intended to hinder, delay or defraud any existing or future creditor.

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

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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. On the Closing Date of any Request, the
representations and warranties as referred to in this Section 5.01(f) shall be deemed
remade by Borrower and Guarantor.

     (g) No Condemnation or Casualty. Except in connection with a Credit Facility
Termination Request or a Release Request, there shall not be pending any condemnation or other
taking, whether direct or indirect, against any Mortgaged Property (other than a Release Mortgaged
Property subject to a Release Request) and there shall not have occurred any casualty to any
improvements located on any Mortgaged Property (other than a Release Mortgaged Property subject to
a Release Request), which condemnation or casualty would have a Material Adverse Effect.

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

          (i) The Loan Documents required to be delivered in connection with the Request;

          (ii) A Compliance Certificate;

          (iii) An Organizational Certificate; and

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

     (i) Covenants. Except in connection with a Credit Facility Termination Request,
Borrower is in full compliance with each of the covenants contained in the Loan Documents, without
giving effect to any notice and cure rights of Borrower.

     (j) Commitment. Receipt by Lender of the Commitment obligating Fannie Mae to purchase
the Advance in accordance with the terms of such Commitment.

     Section 5.02.  Conditions Precedent to Initial Advance.

     The obligation of Lender to make the Initial Advance is subject to Lender’s determination that
each of the following conditions precedent has been satisfied:

     (a) Receipt by Lender of the fully executed Advance Request;

     (b) The Coverage and LTV Tests are satisfied;

     (c) If the Initial Advance includes a Variable Advance, receipt by Lender at least five
(5) days prior to the Initial Closing Date, of the confirmation of an Interest Rate Cap

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commitment, in accordance with the Cap Security Agreement, effective as of the Initial
Closing Date;

     (d) If the Initial Advance includes a Variable Advance, receipt by Lender of Interest
Rate Cap Documents in accordance with the Cap Security Agreement, effective as of the Initial
Closing Date;

     (e) Delivery to the Title Company, for filing and/or recording in all applicable
jurisdictions, of all applicable Loan Documents required by Lender, including duly executed
and delivered original copies of the Initial Security Instruments covering the Initial Mortgaged
Properties and UCC-1 Financing Statements covering the portion of the Collateral comprised of
personal property, and other appropriate instruments, in form and substance reasonably
satisfactory to Lender and in form proper for recordation, as may be necessary in the opinion
of Lender to perfect the Liens created by the applicable Security Instruments and any other Loan
Documents creating a Lien in favor of Lender, and the payment of all taxes, fees and other
charges payable in connection with such execution, delivery, recording and filing;

     (f) Receipt by Lender of any required subordination, non-disturbance and attornment
agreements and/or estoppel certificates with respect to any commercial leases affecting the
Initial Mortgaged Property;

     (g) If the Initial Advance is a Variable Advance, receipt by Lender of the first
installment of Variable Facility Fee;

     (h) Receipt by Lender of the Initial Origination Fee pursuant to Section
10.02(a) and the Initial Due Diligence Fee pursuant to 
Section 10.03(a); and

     (i) Delivery by Lender to Borrower of the confirmed Rate Form for the Initial Advance
pursuant to Section 2.01(c).

     Section 5.03. Conditions Precedent to Future Advances.

     The obligation of Lender to make a requested Future Advance is subject to Lender’s
determination that each of the following conditions precedent has been satisfied:

     (a) Receipt by Lender of the fully executed Advance Request;

     (b) Delivery by Lender to Borrower of the confirmed Rate Form for the Future
Advance pursuant to Section 2.01(c);

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

     (d) If the Future Advance is being made pursuant to Section 2.05, receipt by Lender
of the Re-Underwriting Fee;

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     (e) If the Future Advance is being made pursuant to Section 2.03(b), receipt by
Lender of the Additional Collateral Due Diligence Fees.

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

     (g) Receipt by Lender of the Additional Origination Fee, if any such fee is due,
pursuant to Section 2.05 or Section 10.02(b);

     (h) For any Title Insurance Policy not containing a revolving credit endorsement or future
advance endorsement, the receipt by 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 Permitted Liens;

     (i) If the Future Advance is a Variable Advance, receipt by Lender of the first installment
of Variable Facility Fee for the Variable Advance payable by Borrower pursuant to Section
1.04;

     (j) If the Future Advance is a Variable Advance, receipt by Lender at least five (5) days
prior to the Closing Date, of the confirmation of an Interest Rate Cap commitment, in accordance
with the Cap Security Agreement, effective as of the Closing Date;

     (k) If the Future Advance is a Variable Advance, receipt by Lender of Interest Rate Cap
Documents in accordance with the Cap Security Agreement, effective as of the Closing Date;

     (l) No Governmental Approval not already obtained or made is required for the execution and
delivery of the documents to be delivered in connection with the Future Advance;

     (m) Borrower or Guarantor is not 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 the terms and provisions of the Agreement or any other Loan
Documents, nor are there any proceedings presently in progress or, to its knowledge, contemplated
which, if successful, would lead to the issuance of any such order; and

     (n) Receipt by Lender of a Confirmation of Guaranty for each Guaranty then in effect.

     Section 5.04. Conditions Precedent to Addition of an Additional Mortgaged
Property to the Collateral Pool.

     The Addition of an Additional Mortgaged Property to the Collateral Pool (but not the
Substitution of a Substitute Mortgaged Property into the Collateral Pool, which is governed
exclusively by Section 5.06) on the applicable Closing Date is subject to Lender’s
determination that each of the following conditions precedent has been satisfied:

     (a) The Underwriting Requirements will be satisfied;

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     (b) The requirements of Section 3.02(b) will be satisfied;

     (c) Receipt by Lender of the Addition Fee;

     (d) Receipt by Lender of the Additional Collateral Due Diligence Fee pursuant to
Section 10.03(b);

     (e) Receipt by Lender of all legal fees and expenses payable by Borrower in
connection with the Addition Request pursuant to Section 10.04;

     (f) Receipt by Lender of any required subordination, non-disturbance and attornment
agreements and/or estoppel certificates with respect to any commercial leases affecting the
Additional Mortgaged Property;

     (g) Delivery to the Title Company, with fully executed instructions directing the Title
Company to file and/or record in all applicable jurisdictions, all applicable Addition 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 Additional
Mortgaged Property comprised of personal property, and other appropriate documents, in form
and substance reasonably satisfactory to Lender and in form proper for recordation, as may be
necessary in the opinion of Lender to perfect the Lien created by the applicable additional
Security Instrument, and any other Addition Loan Document creating a Lien in favor of Lender,
and the payment of all taxes, fees and other charges payable in connection with such
execution, delivery, recording and filing;

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

     (i) 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

     (j) Receipt by Lender of evidence that any code violations have been resolved to Lender’s
satisfaction.

     Section 5.05. Conditions Precedent to Release of Property from the Collateral
Pool.

     The obligation of Lender to Release a Mortgaged Property from the Collateral Pool by executing
and delivering the Release Documents on the Closing Date is subject to Lender’s determination that
each of the following conditions precedent has been satisfied:

     (a) The requirements of Section 3.04 are satisfied;

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     (b) Receipt by Lender of the Release Price;

     (c) Receipt by Lender of the Release Fee;

     (d) Receipt by Lender of all legal fees and expenses payable by Borrower in
connection with the Release Request;

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

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

     (g) If Lender determines the Release Mortgaged 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”), Lender must
reasonably determine that the Remaining Mortgaged Properties can be operated separately from the Release
Mortgaged Property and any other phases of the project which are not Mortgaged Properties and
whether any cross use agreements or easements are necessary. In making this determination,
Lender shall evaluate access, utilities, marketability, community services, ownership and
operation of the Release Mortgaged Properties and any other issues identified by Lender in
connection with similar loans anticipated to be sold to Fannie Mae;

     (h) Receipt by Lender on the Closing Date of a Confirmation of Obligations, dated as of the
Closing Date, signed by Borrower and Guarantor, pursuant to which Borrower and Guarantor confirm
their remaining obligations under the Loan Documents; and

     (i) Receipt by Lender of endorsements to the tie-in endorsements of the Title Insurance
Policies, if deemed necessary by Lender, to reflect the release. Notwithstanding anything to the
contrary herein, no release of any Mortgaged Property in the Collateral Pool shall be made unless
Borrower has provided title insurance to Lender in respect of each of the remaining Mortgaged
Properties in the Collateral Pool in an amount equal to one hundred fifteen percent (115%) of the
Initial Valuation of such Mortgaged Properties (taking into account the title insurance coverage
provided by “tie-in” endorsements, if available).

     Section 5.06. Conditions Precedent to Substitution of a Substitute Mortgaged
Property into the Collateral Pool.

     The Substitution of a Substitute Mortgaged Property into the Collateral Pool is subject to
Lender’s determination that each of the following conditions precedent has been satisfied:

     (a) The provisions of Section 3.05(c) shall be satisfied;

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     (b) Receipt by Lender of the Substitution Deposit, if applicable;

     (c) Receipt by Lender of the Substitution Fee;

     (d) Delivery to the Title Company, with fully executed instructions directing the Title
Company to file and/or record in all applicable jurisdictions, all applicable 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 Substitute
Mortgaged Property comprised of personal property, and other appropriate documents, in form
and substance satisfactory to Lender and in form proper for recordation, as may be necessary in
the opinion of Lender to perfect the Lien created by the applicable additional Security
Instrument, and any other Substitution Loan Document creating a Lien in favor of Lender, and
the payment of all taxes, fees and other charges payable in connection with such execution,
delivery, recording and filing;

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

     (f) If the Title Insurance Policy for the Substitute 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 Substitute Mortgaged Property.

     Section 5.07. Conditions Precedent to Conversion.

     The conversion of all or a portion of a SARM Variable Advance to a Fixed Advance is subject
to Lender’s determination that each of the following conditions precedent has been satisfied:

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

     (b) Prepayment by Borrower of any Variable Advances Outstanding that Borrower
has designated for payment, together with any other amounts due with respect to the prepayment
of such Variable Advances; provided that there shall be no associated prepayment premiums due
in connection with a conversion pursuant to the terms of Section 1.06, Section
1.07 and Section 1.08 of this Agreement;

     (c) Receipt by 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 Lender; and

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     (d) Receipt by Lender of one (1) or more counterparts of each Conversion Document, dated as
of the Closing Date, signed by each of the parties (other than Lender) to such Conversion
Document.

     Section 5.08. Conditions Precedent to Termination of Credit Facility.

     The right of Borrower to terminate this Agreement and the Credit Facility and to receive a
release of all of the Collateral from the Collateral Pool and Lender’s obligation to execute and
deliver the Credit Facility Termination Documents on the Closing Date are subject to Lender’s
determination Borrower has paid in full all of the Notes Outstanding on the Closing Date,
including any associated prepayment premiums or other amounts due under the Notes, any Release
Fees, and all other amounts owing by Borrower to Lender under this Agreement.

     Section 5.09. Opinion Relating to Advance Request, Addition Request, Conversion Request,
or Substitution Request.

     With respect to the closing of an Advance Request, an Addition Request, a Conversion Request,
or a Substitution Request, it shall be a condition precedent that Lender receives favorable
opinions of counsel (including local counsel, as applicable) to Borrower and Guarantor, as to the
due organization and qualification of Borrower and Guarantor, the due authorization, execution,
delivery and enforceability of each Loan Document executed in connection with the Request and such
other matters as Lender may reasonably require, each dated as of the Closing Date for the Request,
in form and substance reasonably satisfactory to Lender in all respects.

     Section 5.10. Delivery of Property-Related Documents.

     With respect to each of the Initial Mortgaged Properties or an Additional Mortgaged Property,
it shall be a condition precedent that Lender receive from Borrower each of the documents and
reports required by Lender pursuant to the Underwriting Requirements in connection with the pledge
of such Mortgaged Property and each of the following, each dated as of the Closing Date for the
Initial Mortgaged Property or an Additional Mortgaged Property, as the case may be, in form and
substance satisfactory to Lender in all respects:

     (a) A commitment for the Title Insurance Policy applicable to the Mortgaged
Property and a pro forma Title Insurance Policy based on the title commitment in the amount of
title insurance afforded by the Title Insurance Policy for each Mortgaged Property in the
Collateral Pool equal to one hundred fifteen percent (115%) of the Initial Valuation of such
Mortgaged Property (taking into account the title insurance coverage provided by “tie-in”
endorsements, if available) Commitment and approved by Lender;

     (b) The Insurance Policy (or a certified copy of the Insurance Policy) applicable to the Mortgaged Property;

     (c) Unless waived by Lender, the Survey applicable to the Mortgaged Property and
approved by Lender (which shall be last revised no less than forty-five (45) days prior to the
Closing Date);

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     (d) Evidence satisfactory to Lender of compliance of the Mortgaged Property with Property Laws;

     (e) An Appraisal of the Mortgaged Property;

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

     (g) A Completion/Repair and Security Agreement, if required by Lender, together with required escrows, on the standard form required by Lender;

     (h) If no management agreement is in effect for a Mortgaged Property, an Agreement Regarding
Management Agreement or, if a management agreement is in effect for a Mortgaged Property, an
Assignment of Management Agreement, on the standard form required by Lender;

     (i) An Assignment of Leases and Rents, if 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;

     (j) A Certificate of Borrower Parties; and

     (k) Any other document that Lender may reasonably determine is required in connection with a
Mortgaged Property.

     Section 5.11. Conditions Precedent to Letters of Credit.

     The right or requirement of Borrower to provide a Letter of Credit in connection with this
Agreement is subject to Lender’s determination that each of the following conditions precedent has
been satisfied:

     (a) Letter of Credit Requirements. Any Letter of Credit shall be issued by a financial
institution satisfactory to Lender (the “Issuer”). If Borrower provides Lender with a Letter of
Credit pursuant to this Agreement, the Letter of Credit shall be in form and substance
satisfactory to Lender and Lender shall be entitled, upon occurrence of circumstances in (b), to
draw under such Letter of Credit solely upon presentation of a sight draft to the Issuer. Any
Letter of Credit shall be for a term of at least three hundred sixty-four (364) days (provided that
in connection with a Substitution, the term of any Letter of Credit shall be until the date five (5)
days after the Property Delivery Deadline).

     (b) Draws Under Letter of Credit. Lender shall have the right in its sole discretion to
draw monies under the Letter of Credit:

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          (i) upon the occurrence of (A) an Event of Default, or (B) a Potential Event of Default of
which Borrower has knowledge has occurred and continued for two (2) Business Days;

          (ii) if thirty (30) days prior to the expiration of the Letter of Credit, either the Letter
of Credit has not been extended for a term of at least three hundred sixty four (364) days
(provided that in connection with a Substitution, the term of any Letter of Credit shall be at
least until the date five (5) days after the Property Delivery Deadline) or Borrower has not
replaced the Letter of Credit with substitute cash collateral in the amount required by Lender; or

          (iii) upon the downgrading of the long-term obligations of the Issuer below a level
satisfactory to Lender; provided that Borrower shall have five (5) Business Days after notice of
such downgrading to deliver to Lender either (A) an acceptable replacement Letter of Credit or (B)
substitute cash collateral in the amount required by Lender.

     (c) Deposit to Cash Collateral Account. If Lender draws under the Letter of Credit
pursuant to Section 5.11(b)(ii) or Section 5.11(b)(iii) above, Lender shall deposit such draw
monies into a Cash Collateral Account established pursuant to a Cash Collateral Agreement
entered into the first time Lender draws any such monies. Lender shall hold the Letter of Credit
drawn monies in the Cash Collateral Account until the earliest of the following events occurs:

          (i) Borrower presents an acceptable replacement Letter of Credit and Lender agrees, in its
sole discretion, to accept such Letter of Credit (provided that any agreement by Lender to accept a
replacement Letter of Credit will be conditioned upon Borrower’s payment of all administrative and
legal costs incurred by Lender and Fannie Mae in connection with the replacement of the Letter of
Credit.)

          (ii) the applicable provisions of this Agreement pursuant to which the Letter of Credit was
provided are satisfied;

          (iii) Borrower pays all amounts due and payable under the Loan Documents and Lender releases
the liens of all Security Instruments;

          (iv) Lender, in its sole discretion, consents to Borrower’s request to apply the funds to the
principal balance of a Note and any prepayment premium due in connection with such application; or

          (v) an Event of Default occurs and Lender elects to apply the proceeds as described below in
Section 5.ll(d);

During any period that Lender holds the cash proceeds resulting from a draw on any Letter of
Credit, Lender will not pay interest to, or on behalf of, Borrower in connection with such funds.

     (d) Default Draws. If Lender draws under the Letter of Credit pursuant to Section 5.11(b)(i) above, Lender may in its sole discretion use monies drawn under the Letter of Credit
for any of the following purposes:

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          (i) to pay any amounts required to be paid by Borrower under the Loan Documents (including,
without limitation, any amounts required to be paid to Lender under this Agreement);

          (ii) to (on such Borrower’s behalf, or on its own behalf if Lender becomes the owner of the
Mortgaged Property) pre-pay any Note, including any prepayment premium or yield maintenance;

          (iii) to make improvements or repairs to any Mortgaged Property; or

          (iv) deposit monies into the Cash Collateral Account.

     (e) Legal Opinion. Prior to or simultaneous with the delivery of any new Letter of
Credit (but not the extension of any existing Letter of Credit), such Borrower shall cause the
Issuer’s counsel to deliver a legal opinion satisfactory in form and substance reasonably
satisfactory to Lender.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

     Section 6.01. Representations and Warranties of Borrower.

     The representations and warranties of Borrower Parties are contained in the Certificate of
Borrower Parties, the form of which is attached to this Agreement as Exhibit J.

     Section 6.02. Representations and Warranties of Lender.

     Lender hereby represents and warrants to Borrower and Guarantor as follows:

     (a) Due Organization. Lender is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware.

     (b) Power and Authority. 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 Lender of this Agreement, and
the consummation by it of the transactions contemplated hereby, and the performance by it of its
obligations hereunder, have been duly and validly authorized by all necessary action and

proceedings by it or on its behalf.

ARTICLE 7

AFFIRMATIVE COVENANTS OF BORROWER

     Borrower Parties agree and covenant with Lender that, at all times during the Term of this
Agreement:

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     Section 7.01. Compliance with Agreements.

     Each of Borrower and Guarantor 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 Borrower’s or
Guarantor’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 7.02. Maintenance of Existence.

     Each Borrower Party shall maintain its existence and continue to be duly organized under the
laws of the state of its organization. Borrower and Guarantor shall continue to be duly qualified
to do business in each jurisdiction in which such qualification is necessary to the conduct of its
business and where the failure to be so qualified would adversely affect the validity of, the
enforceability of, or the ability to perform, its obligations under this Agreement or any other
Loan Document.

     Section 7.03. Maintenance of REIT Status.

     During the Term of this Agreement, the General Partner 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 7.04. Financial Statements; Accountants’ Reports; Other Information.

     Each Borrower Party shall keep and maintain at all times complete and accurate books of
accounts and records in sufficient detail to correctly reflect (i) all of Borrower’s and
Guarantor’s financial transactions and assets and (ii) 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, Borrower or Guarantor, as applicable, shall furnish, or cause to be
furnished, to Lender:

     (a) Annual Financial Statements. As soon as available, and in any event within ninety
(90) days after the close of its fiscal year during the Term of this Agreement, the balance sheet
of Borrower, Guarantor and its Subsidiaries on a consolidated basis as of the end of such fiscal
year, the statement of income, Borrower’s and Guarantor’s equity and retained earnings of Borrower,
Guarantor and its Subsidiaries on a consolidated basis for such fiscal year and the statement of
cash flows of Borrower, Guarantor and its Subsidiaries on a consolidated basis 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 with respect to the audited statements (as required below) accompanied by
a certificate of 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. All financial

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statements required by this subsection (a) with respect to Guarantor shall be audited and
all financial statements required by this subsection (a) with respect to Borrower may be
unaudited.

     (b) Quarterly Financial Statements. As soon as available, and in any event within
forty five (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 Borrower, Guarantor and its Subsidiaries on a
consolidated basis as of the end of such fiscal quarter, the unaudited statement of income and
retained earnings of Borrower, Guarantor and its Subsidiaries on a consolidated basis and the
unaudited statement of cash flows of Borrower, Guarantor and its Subsidiaries on a consolidated
basis 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 a Proper Officer to the effect
that such financial statements have been prepared in accordance with GAAP, consistently
applied and subject to customary exceptions, 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
forty five (45) days after each Calendar Quarter, a statement of income and expenses of each
Mortgaged Property accompanied by a certificate of a Proper Officer to the effect that each such
statement of income and expenses fairly, accurately and completely presents the operations of
each such Mortgaged Property in all material respects for the period indicated.

     (d) Annual Property Statements. On an annual basis within ninety (90) days of the
end of its fiscal year, an annual statement of income and expenses of each Mortgaged Property
accompanied by a certificate of a Proper Officer to the effect that each such statement of income
and expenses fairly, accurately and completely presents the operations of each such Mortgaged
Property in all material respects for the period indicated.

     (e) Updated Rent Rolls. As soon as available, and in any event within forty five (45)
days after each Calendar Quarter, 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 Lender and accompanied by a
certificate of a Proper Officer to the effect that each such Rent Roll fairly, accurately and
completely presents the information required therein in all material respects.

     (f) Security Deposit Information. Upon 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 Lender to access information regarding such
accounts.

     (g) Security Law Reporting Information. So long as General Partner is a reporting company under the Securities Exchange Act of 1934, promptly upon becoming available, (i)

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copies of all financial statements, reports and proxy statements sent or made available generally
by General Partner, or any of its Affiliates, to its respective security holders, (ii) 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 General
Partner, or any of its Affiliates, with the Securities and Exchange Commission or other
Governmental Authorities, and (iii) all press releases and other statements made available
generally by General Partner, or any of its Affiliates, to the public concerning material
developments in the business of General Partner or other party.

     (h) Accountants’ Reports; Other Reports. Promptly upon receipt thereof: (i) copies of
any reports or management letters submitted to Borrower or Guarantor 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 Borrower or Guarantor shall only be required to deliver such reports and management
letters to the extent that they relate to Borrower or Guarantor or any Mortgaged Property; and
(ii) all schedules, financial statements or other similar reports delivered by Borrower or
Guarantor pursuant to the Loan Documents or requested by Lender with respect to Guarantor’s
business affairs or condition (financial or otherwise) or any of the Mortgaged Properties.

     (i) Annual Budgets. Prior to 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) Plans and Projections. To the extent prepared in the ordinary course of business
of Borrower and in the form prepared by Guarantor in the ordinary course of business, within
thirty (30) days after its preparation, copies of (i) Guarantor’s business plan for the current
and the succeeding two fiscal years, (ii) Borrower’s annual budget (including capital expenditure
budgets) and projections for each Mortgaged Property; and (iii) Guarantor’s financial projections
for the current and the succeeding two fiscal years.

     (k) Strategic Plan. To the extent prepared in the ordinary course of business of
Borrower and in the form prepared by Guarantor in the ordinary course of business, within thirty
(30) days after its preparation, a written narrative discussing Guarantor’s 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 Proper Officer as true, correct and
complete in all material respects (“Strategic Plan”). If Guarantor’s Strategic Plan materially
changes, then Guarantor shall deliver to Lender the Strategic Plan as so changed.

     (l) Annual Rental and Sales Comparable Analysis. To the extent prepared in the
ordinary course of business of Borrower and in the form prepared by Borrower in the ordinary
course of business, within thirty (30) days after its preparation, a rental and sales comparable
analysis of the local real estate market in which each Mortgaged Property is located.

     (m) Statement of Ownership. At any time upon Lender’s request, a statement that
identifies: (i) all owners of any interest in Borrower and the interest held by each and (ii) if

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Borrower is a corporation, all officers and directors of Borrower, and if Borrower is a limited
liability company, all managers who are not members.

     (n) Other Information. Within forty-five (45) days after Lender’s request, but not
more frequently than once per Calendar Year, such other information reasonably requested by
Lender.

     (o) Federal Tax Returns. Within thirty (30) days of filing, the Federal Tax Return of
Borrower and Guarantor.

     Section 7.05. Confidentiality of Certain Information.

     No Borrower Party shall disclose any terms, conditions, underwriting requirements or
underwriting procedures of the Credit Facility or any of the Loan Documents; provided, however,
that such confidential information may be disclosed (a) as required by law or pursuant to
generally accepted accounting procedures, (b) to officers, directors, employees, agents, partners,
attorneys, accountants, engineers and other consultants of Borrower who need to know such
information, provided such Persons are instructed to treat such information confidentially, (c) to
any regulatory authority having jurisdiction over Borrower, (d) in connection with any filings
with the Securities and Exchange Commission or other Governmental Authorities, or (e) to any other
Person to which such delivery or disclosure may be necessary or appropriate (i) in compliance with
any law, rule, regulation or order applicable to Borrower, (ii) in response to any subpoena or
other legal process or information investigative demand or (iii) in connection with any litigation
to which Borrower is a party.

     Section 7.06. 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, Borrower shall permit Lender to:

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

     (b) discuss Borrower’s affairs, finances and accounts with any Proper Officer or any other person performing the functions of the Proper Officers;

     (c) discuss Borrower’s affairs, finances and accounts with its independent public
accountants, provided that a Proper Officer has been given the opportunity by Lender to be a
party to such discussions;

     (d) discuss the Mortgaged Properties’ conditions, operations or maintenance with the
Property Managers and/or asset manager of such Mortgaged Properties and the officers and
employees of Borrower and Guarantor; and

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     (e) receive any other information that Lender deems reasonably necessary or relevant in
connection with any Advance, any Loan Document or the Obligations from the officers of Borrower or
Guarantor or officers and employees of Property Manager.

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 Borrower.

     Section 7.07. Certificate of Compliance.

     Guarantor shall deliver to Lender concurrently with the delivery of the financial statements
and/or reports required by Section 7.04(a) and Section 7.04(b) a certificate signed
by a Proper Officer (i) setting forth in reasonable detail the calculations required to establish
whether Borrower and Guarantor were in compliance with the requirements of Article 7 of
this Agreement 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 Borrower or Guarantor is taking
or proposes to take. Any certificate required by this Section 7.07 shall run directly to
and be for the benefit of Lender and Fannie Mae.

     Section 7.08. Maintain Licenses.

     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 7.09. Inform Lender of Material Events.

     Borrower shall promptly inform Lender in writing of any of the following (and shall deliver
to Lender copies of any related written communications, complaints, orders, judgments and other
documents relating to the following) of which 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; the receipt of written notice from any
Governmental Authority having jurisdiction over Borrower or Guarantor that (i) Borrower or
Guarantor is being placed under regulatory supervision, (ii) any license, Permit, charter,
membership or registration material to the conduct of Borrower’s or Guarantor’s business or the
Mortgaged Properties is to be suspended or revoked or (iii) Borrower or Guarantor is to cease
and desist any practice, procedure or policy employed by Borrower or Guarantor in the conduct
of its business, and with respect to (i) or (ii) the same would have, or may reasonably be
expected to have, a Material Adverse Effect;

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     (c) Bankruptcy Proceedings. The commencement of any proceedings by or against
Borrower or Guarantor 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;

     (d) Environmental Claim. The receipt from any Governmental Authority or other
Person of any written 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 (i) the existence or occurrence, or the alleged existence
or occurrence, of a Hazardous Substance Activity on any Mortgaged Property or (ii) the
violation, or alleged violation, of any Hazardous Materials Laws in connection with any
Mortgaged Property or any of the other assets of Borrower;

     (e) Material Adverse Effects. The occurrence of any act, omission, change or event
(including the commencement or threat of any proceedings by or against Borrower or Guarantor
in any Federal, state or local court, or before any Governmental Authority, or before any
arbitrator), which has, or would have, a Material Adverse Effect, subsequent to the date of the
most recent financial statements of Borrower or Guarantor delivered to Lender pursuant to
Section 7.03;

     (f) Accounting Changes. Any material change in Borrower’s or Guarantor’s accounting policies or financial reporting practices; and

     (g) 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 Borrower or Guarantor or any Mortgaged Property.

     Section 7.10. Compliance with Applicable Laws.

     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 any Mortgaged Property. 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, and shall comply with all written notices from Governmental
Authorities.

     Section 7.11. Alterations to the Mortgaged Properties.

     Except as otherwise provided in the Loan Documents, 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 Lender; provided,
however, that in any case, no such Alteration shall be made to any Mortgaged Property without
the prior written consent of Lender if (i) such Alteration could reasonably be expected to
materially and adversely affect the value of such Mortgaged Property or its operation as a

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multifamily housing facility in substantially the same manner in which it is being operated on the
date such property became Collateral, (ii) the construction of such Alteration could reasonably be
expected to result in interference to the occupancy of tenants of such Mortgaged Property such that
tenants in occupancy with respect to five percent (5%) or more of the Leases would be permitted to
terminate their Leases or to abate the payment of all or any portion of their rent, or (iii) such
Alteration will be completed in more than twelve (12) months from the date of commencement or in
the last year of the Term of this Agreement. Notwithstanding the foregoing, Borrower must obtain
Lender’s prior written consent to construct Alterations (other than scheduled repairs and
maintenance to existing improvements) with respect to any Mortgaged Property costing in excess of
the lesser of (A) ten percent (10%) of the Allocable Facility Amount of such Mortgaged Property and
(B) $500,000, and Borrower must give prior written notice to Lender of its intent to construct
Alterations (other than scheduled repairs and maintenance to existing improvements) with respect to
such Mortgaged Property costing in excess of $100,000; provided, however, that the preceding
requirements shall not be applicable to Alterations made, conducted or undertaken by Borrower as
part of Borrower’s routine maintenance and repair of the Mortgaged Properties as required by or
contemplated under the Loan Documents.

     Section 7.12. 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 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 Lender in the Mortgaged Properties, or Lender by
reason of or as holder of the Loan Documents, Borrower shall pay all such Loan Document Taxes to,
for, or on account of Lender (or provide funds to Lender for such payment, as the case may be) as
they become due and payable and shall promptly furnish proof of such payment to 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 Lender may prohibit Borrower from paying the Loan Document Taxes to or for Lender,
Borrower shall enter into such further instruments as may be permitted by law to obligate Borrower
to pay such Loan Document Taxes.

     Section 7.13. Further Assurances.

     Borrower Parties, at the request of 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 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.

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     Section 7.14. Transfer of Ownership Interests in Borrower and Guarantor.

     (a) Prohibition on Transfers. Subject to paragraph (b) of this Section 7.14, Borrower
and Guarantor shall not cause or permit a Transfer or a Change of Control.

     (b) Permitted Transfers. Notwithstanding the provisions of paragraph (a) of this
Section 7.14, the following Transfers of Ownership Interests in Borrower, Guarantor, or General
Partner are permitted without the consent of Lender, provided that Borrower shall provide fifteen
(15) Business Days prior written notice thereof to Lender (provided, however, that no such
notice to Lender need be given with respect to those Permitted Transfers that occur due to the
ordinary course of trading of a Publicly-Held Corporation) (“Permitted Transfers”):

          (i) A Transfer that occurs by inheritance, devise, or bequest or by operation of law upon the
death of a natural person who is the owner of a direct or indirect Ownership Interest in Borrower
or Guarantor.

          (ii) A Transfer to trusts or other entities established for the benefit of the transferor
and/or immediate family members for estate planning purposes.

          (iii) A Transfer of any direct or indirect Ownership Interest in Borrower, Guarantor, or
General Partner; provided, however, that no Change of Control occurs as the result of such
Transfer.

          (iv) The issuance by Borrower or Guarantor of additional membership interests, partnership
interests or stock (including by creation of a new class or series of interests or stock and all
varieties of convertible debt, equity and other similar securities), as the case may be, and the
subsequent direct or indirect Transfer of such interests or stock; provided, however, that no
Change of Control occurs as the result of such Transfer.

          (v) Any amendment, modification or any other change in the governing instrument or instruments
of Borrower or Guarantor in connection with the creation of a new class or series of interests of
stock pursuant to (iv) above; provided, however, that no Change of Control occurs as the
result of such Transfer.

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

          (vii) A Transfer of any minority non-controlling Ownership Interest in Borrower or Guarantor
provided no Change of Control occurs as a result of such Transfer.

          (viii) A conversion of Borrower from one type of legal entity into another type of legal
entity for tax or other structuring purposes, provided:

          (A) no Change of Control occurs,

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          (B) Borrower provides Lender with prior written notice of such conversion,

          (C) Borrower provides Lender any certificates evidencing such conversion filed with the appropriate Secretary of State,

          (D) Borrower provides Lender new certificates of good standing for such entity,

          (E) Lender reserves the right to file UCC-3 amendments where necessary reflecting the conversion,

          (F) Borrower executes an amendment to this Agreement documenting the conversion, and

          (G) The Title Company shall confirm (via electronic mail or letter) that
nothing is needed in the land records (of each of the appropriate jurisdictions) at such
time to evidence such conversion, and no endorsements to the title policies are necessary
to maintain Lender’s coverage.

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

Notwithstanding anything in this Section 7.14 to the contrary, a “Permitted
Transfer” shall not include any transfer that Lender, in its reasonable discretion, determines
is unacceptable because it would overexpose the Lender or Fannie Mae to the credit risk posed by a
third party transferee or its Affiliates, if any.

          (c) Consent to Prohibited Transfers. Lender may, in its sole and absolute discretion,
consent to a Transfer that would otherwise violate this Section 7.14 if, prior to the
Transfer, Borrower or Guarantor, as the case may be, 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 7.14;

               (ii) the absence of any Event of Default or Potential Event of Default;

               (iii) the transferee meets all of the eligibility (including the requirement that the
proposed transferee is not a Prohibited Person), 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 borrowers or guarantors, as the case may be, in connection

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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 or
Guarantor, as the case may be, if transferor has obligations under any Loan Documents, the
execution by the transferee of one (1) or more individuals or entities acceptable to Lender of an
assumption agreement that is acceptable to Lender and that, among other things, requires the
transferee to perform all obligations of transferor or such person set forth in such Loan
Document, and may require that the transferee comply with any provisions of this Instrument or any
other Loan Document which previously may have been waived by Lender;

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

               (A) a transfer fee equal to one percent (1%) of the Advances Outstanding immediately prior to the Transfer;

               (B) a $3,000 review fee; and

               (C) 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.

     For the purposes of Section 7.14 and Section 7.15, “Prohibited Person” means
(i) a Person that is the subject of, whether voluntary or involuntary, any case, proceeding or
other action against Borrower under any existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization, liquidation, rehabilitation, receivership, or relief of
debtors, or (ii) any Person with whom Lender is prohibited from doing business pursuant to any law,
rule, regulation, judicial proceeding or administrative directive, or (iii) any Person identified
on the federal “Excluded Parties List System,” the federal “Office of Foreign Assets and Control
Specially Designated Nationals and Blocked Persons” list, the U.S. Department of Housing and Urban
Development’s “Limited Denial of Participation, HUD Funding Disqualifications and Voluntary
Abstentions List,” or on Lender’s “Multifamily Applicant Experience Check,” each of which may be
amended from time to time and any successor or replacement thereof, or (iv) a Person that is
determined by Fannie Mae to have an unacceptable level of outstanding debt to Fannie Mae, or (v) a
Person that has caused any unsatisfactory experience of a material nature with Fannie Mae or
Lender, such as a default, fraud, intentional misrepresentation, material litigation, material
arbitration or other similar act, or (vi) a Person that is, or whose senior management is, the
subject of any pending criminal indictment or criminal investigation relating to an alleged felony
or has ever been convicted of a felony or held liable for fraud in a civil or criminal action.

     Section 7.15. Transfer of Ownership of Mortgaged Property.

          (a) Prohibition on Transfers. Subject to paragraph (b) of this Section 7.15, neither Borrower nor Guarantor shall cause or permit a Transfer of all or any part of a
Mortgaged Property or interest in any Mortgaged Property.

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          (b) Permitted Transfers. Notwithstanding provision (a) of this Section 7.15 or any other provisions of this Agreement or any other Loan Document to the contrary, the
following Transfers of a Mortgaged Property by Borrower or Guarantor are permitted without
the consent of Lender:

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

               (ii) 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 or Permitted Liens.

               (iii) 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
forty-five (45) days of the date of creation.

               (iv) The grant of an easement if, prior to the granting of the easement, 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
adversely affect the operation of the Mortgaged Property or Lender’s interest in the Mortgaged
Property and Borrower pays to Lender, within ten (10) Business Days after demand therefore, all
reasonable third party out-of-pocket 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, driveways and parking areas, 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.

          (c) Consent to Prohibited Transfers. Lender may, in its sole and absolute
discretion, consent to a Transfer that would otherwise violate this Section 7.15 if, prior to the
Transfer, Borrower has satisfied each of the following requirements:

               (i) the Transfer is in connection with a Transfer of all of the Mortgaged Property in the
Collateral Pool and is in connection with the full assumption of the Credit Facility (no
individual Mortgaged Property may be Transferred subject to the lien of the Security Instrument);

               (ii) the submission to Lender of all information required by Lender to make the determination
required by this Section 7.15;

               (iii) the absence of any Event of Default or Potential Event of Default;

               (iv) the transferee meets all of the eligibility (including the requirement that the proposed
transferee is not a Prohibited Person), credit, management and other standards

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(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 or Guarantor, as the case may be, in connection with the
origination or purchase of similar mortgages, deeds of trust or deeds to secure debt on
multifamily properties;

          (v) if transferor has obligations under any Loan Documents, the execution by the transferee
or one (1) 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;

          (vi) the Mortgaged Properties, at the time of the proposed Transfer, meets all standards as
to physical condition that are customarily applied by Lender at the time of the proposed Transfer
to the approval of properties in connection with the origination or purchase of similar mortgages
on multifamily properties; and

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

          (A) a transfer fee equal to one percent (1%) of the Outstanding Advances immediately prior to the Transfer;

          (B) a $3,000 review fee; and

          (C) 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 7.16. Change in Senior Management.

     Borrower shall give Lender notice of any change in the identity of the Chief Executive
Officer, Chief Financial Officer or Executive Vice President within ten (10) Business Days of the
occurrence thereof.

     Section 7.17. 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.
Borrower shall pay for the cost and expenses incurred by 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 (1) such endorsement in any consecutive twelve (12) month period.

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     Section 7.18. Ownership of Mortgaged Properties.

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

     Section 7.19. Change in Property Manager.

     No change in the Property Manager of each Mortgaged Property shall be made without the prior
written consent of Lender, which approval shall be based on the criteria for approval of Property
Managers as required by Lender for similar loans anticipated to be sold to Fannie Mae. Lender
acknowledges that the Mortgaged Properties are managed by a wholly owned subsidiary of Guarantor
and do not possess a formal management agreement. If, with Lender’s prior written consent as
provided in this Section 7.19, a third party manager is subsequently retained to manage the
Mortgaged Properties, then such third party manager shall execute an Assignment of Management
Agreement in form and substance acceptable to Lender. In the event Lender exercises its rights and
remedies under the Loan Documents in connection with an Event of Default, then Lender shall also
have the right, but not the obligation, to require and choose a third party manager to manage the
Mortgaged Properties.

ARTICLE 8

INTENTIONALLY DELETED

ARTICLE 9

NEGATIVE COVENANTS OF BORROWER AND GUARANTOR

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

     Section 9.01. Other Activities.

     No Borrower Party shall:

     (a) amend its Organizational Documents in any material respect without the prior
written consent of Lender, except in connection with a Permitted Transfer;

     (b) change its name without notifying Lender in writing prior to such change;

     (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 and ancillary uses consistent with Multifamily
Residential Properties.

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     Section 9.02. Liens.

     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 9.03. Indebtedness.

     Borrower shall not incur or be obligated at any time with respect to any Indebtedness (other
than Advances) in connection with or secured by any of the Mortgaged Properties. Neither Borrower
nor any owner of Borrower shall (a) incur any “mezzanine debt,” secured or unsecured or issue any
preferred equity in connection with providing such mezzanine type financing, or (b) incur any
similar Indebtedness or equity with respect to any Mortgaged Property.

     Section 9.04. Principal Place of Business.

     Borrower shall not change its principal place of business, state of formation, legal name or
the location of its books and records, each as set forth in Borrower’s Certificate, without first
giving thirty (30) days’ prior written notice to Lender.

     Section 9.05. Condominiums.

     Borrower shall not submit any Mortgaged Property to a condominium regime during the Term of
this Agreement.

     Section 9.06. Restrictions on Distributions.

     To the extent permitted by tax laws and regulations pertaining to the requirements of a real
estate investment trust, 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 9.07. Conduct of Business.

     The conduct of Borrower’s businesses shall not violate the Organizational Documents pursuant
to which it is formed.

     Section 9.08. Ownership of Property.

     Borrower shall not (i) acquire any real or personal property other than the Mortgaged
Properties and personal property related to the operation and maintenance of the Mortgaged
Properties and (ii) operate any business other than the management and operation of the Mortgaged
Properties.

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ARTICLE 10

FEES

     Section 10.01. Unused Capacity; Unused Capacity Fee.

     At all times that Borrower desires to maintain the availability of Unused Capacity, Borrower
shall pay the Unused Capacity Fee which shall enable Borrower to borrow the remainder of the
Commitment subject to the terms of this Agreement. Borrower shall have the right to draw all or
any portion of the Unused Capacity as a Fixed Advance or Variable Advance. The Variable Facility
Commitment shall be reduced by, and the Fixed Facility Commitment shall be increased by, such
amount drawn as a Fixed Advance from the Unused Capacity. The Unused Capacity Fee shall be payable
monthly, in arrears, on the first Business Day following the end of the month beginning on the
Initial Closing Date and ending on the First Anniversary, unless Borrower elects to stop paying
the Unused Capacity Fee prior to the First Anniversary and provides at least thirty (30) days’
written notice of such termination to Lender. If Borrower fails to provide written notice to
Lender on or prior to the last Business Day of a given month, Borrower shall be deemed to have
elected to pay the Unused Capacity Fee for the following month. In the event Borrower elects not
to pay the Unused Capacity Fee with respect to any portion of the amount not yet borrowed under
the Commitment, such amount shall be automatically permanently terminated. There is no Unused
Capacity as of the Initial Closing Date.

     Section 10.02. Origination Fees.

     (a) Initial Origination Fee. Borrower shall pay to Lender an origination fee(“Initial
Origination Fee”) equal to 45 basis points (0.45%) multiplied by the amount
Outstanding under
the Commitment.

     (b) Additional Origination Fee. Upon the closing of a Future Advance under
Section
2.03(b) or an Additional Loan under Section 2.05, Borrower shall pay to Lender
an origination
fee (“Additional Origination Fee”) equal to the product obtained by multiplying (i) the amount
of the Advance made on the Closing Date by (ii) 45 basis points (0.45%).

     Section 10.03. Due Diligence Fees.

     (a) Initial Due Diligence Fees. On the Initial Closing Date (or, if the proposed
Initial Mortgaged Properties do not become part of the Collateral Pool, on demand), Borrower shall
pay to Lender due diligence fees (“Initial Due Diligence Fees”) with respect to each Initial
Mortgaged Property in an amount equal to the reasonable out-of-pocket costs incurred by Lender in
connection with Lender’s due diligence for such Initial Mortgaged Properties, including but not
limited to third party reports required by Lender plus a $4,500 fee per Initial Mortgaged
Property (inclusive of a $1,500 fee payable by Lender to Fannie Mae). On or before the Initial
Closing Date, Borrower shall pay a deposit toward the Initial Due Diligence Fees equal to the
product obtained by multiplying (i) $12,500, by (ii) the number of Initial Mortgaged Properties,
minus the portion of the estimated amount of Initial Due Diligence Fees previously paid to
Lender by Borrower . On or prior to the Initial Closing Date, Lender shall notify Borrower of

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the actual amount of the Initial Due Diligence Fees and Borrower shall, on the Initial Closing
Date, pay to Lender the remainder of such Initial Due Diligence Fees (if the actual amount of the
Initial Due Diligence Fees exceeds the deposit and the other amounts previously paid to Lender by
Borrower) or Lender shall promptly refund to Borrower any amounts paid to Lender by Borrower in
excess of the Initial Due Diligence Fees (if the actual amount of the Initial Due Diligence Fees
is less than the deposit and the other amounts previously paid to Lender by Borrower).

     (b) Additional Due Diligence Fees for Additional Collateral. Borrower shall pay to
Lender additional due diligence fees (the “Additional Collateral Due Diligence Fees”) with
respect to each Additional Mortgaged Property in an amount equal to the actual costs of Lender’s
due diligence for such Additional Mortgaged Properties, including but not limited to third party
reports required by Lender plus a $4,500 fee per Additional Mortgaged Property (inclusive
of a $1,500 fee payable by Lender to Fannie Mae). In connection with any Addition Request, Borrower
shall pay to Lender a deposit toward the Additional Collateral Due Diligence Fees equal to the
product obtained by multiplying (i) $12,500, by (ii) the number of Additional Mortgaged Properties.
The Additional Collateral Due Diligence Fees not covered by the deposit shall be paid by Borrower
on the Closing Date (or if the proposed Additional Mortgaged Property does not become part of the
Collateral Pool, on demand) for the Additional Mortgaged Property. Any portion of the Additional
Collateral Due Diligence Fee paid to Lender not actually used by Lender to cover reasonable due
diligence expenses shall be promptly refunded to Borrower.

     Section 10.04. Legal Fees and Expenses.

     (a) Initial Legal Fees. Borrower shall pay, or reimburse Lender for, all reasonable
out-of-pocket legal fees and expenses incurred by 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 of this Agreement.

     (b) Fees and Expenses Associated with Requests. Borrower shall pay, or reimburse
Lender and Fannie Mae for, all reasonable out-of-pocket costs and expenses incurred by Lender
and Fannie Mae, including legal fees and expenses incurred by Lender and Fannie Mae 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
Lender of any of its obligations with respect to the Request, the satisfaction of all
conditions
precedent to Borrower’s rights or 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 out-of-pocket
costs
and expenses in connection with a Request. The obligations of Borrower under this subsection
shall be absolute and unconditional, regardless of whether the transaction requested in the
Request actually occurs. Borrower shall pay such costs and expenses to Lender on the Closing
Date for the Request, or, as the case may be, after demand by Lender if Lender determines that
such Request will not be approved or otherwise close.

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     Section 10.05. Failure to Close any Request.

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

ARTICLE 11

EVENTS OF DEFAULT

     Section 11.01. 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 Borrower or Guarantor 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 Borrower to pay when due any amount payable by Borrower under
any Note, any Security Instrument, this Agreement or any other Loan Document, including any
fees, costs or expenses;

     (c) the failure by Borrower to perform or observe any covenant set forth in Section
7.09 (Inform Lender of Material Events), Section 7.11 (Alterations to
Mortgaged Properties),
Section 7.14 (Transfer of Ownership Interests in Borrower and Guarantor), Section
7.15
(Transfer of Ownership of Mortgaged Property), Section 7.18 (Ownership of Mortgaged
Properties), Section 7.19 (Change in Property Manager), Section 9.01 (Other
Activities), Section
9.02 (Liens), Section 9.03 (Indebtedness), Section 9.06 (Restrictions
on Distributions), or
Section 9.08 (Ownership of Property); or

     (d) the failure by Borrower to perform or observe any covenant contained in Article 7 or Article 9 (other than those sections specifically referenced in Section
ll.0l(c) above) for
thirty (30) days after receipt of notice of such failure by Borrower from Lender, provided
that
such period shall be extended for up to thirty (30) additional days if Borrower, in the
discretion
of Lender, is diligently pursuing a cure of such default within thirty (30) days after receipt
of
notice from Lender; or

     (e) any warranty, representation or other written statement made by or on behalf of
Borrower or Guarantor 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

     (f) (i) Any Borrower Party shall (A) commence a voluntary case, whether of such
Person or an Affiliate thereof, under the Federal bankruptcy laws (as now or hereafter in
effect),
(B) file a petition as debtor seeking to take advantage of any other laws, domestic or
foreign,

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

     (h) (i) except as permitted under the Loan Documents, the execution by 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 Borrower free from encumbrances, or
(iii) if Borrower does not furnish to Lender upon request the contracts, bills of sale, statements,
receipted vouchers and agreements, or any of them, under which Borrower claim title to any
materials, fixtures, or articles referred to in subsections (i) or (ii) of this paragraph
(h); or

     (i) the failure by Borrower to comply with any requirement of any Governmental Authority
within thirty (30) days after written notice of such requirement shall have been given to Borrower
by such Governmental Authority; provided that, if action is commenced and diligently pursued by
Borrower within such thirty (30) days, then Borrower shall have an additional ninety (90) days to
comply with such requirement; or

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

     (k) any judgment against Borrower or Guarantor, any attachment or other levy against any
portion of Borrower’s or Guarantor’s assets with respect to a claim or claims in an amount in
excess of $300,000 individually and/or $550,000 in the aggregate remains unpaid, unstayed on appeal
undischarged, unbonded, not fully insured or undismissed for a period of ninety (90) days; or

     (l) the failure by Borrower or Guarantor to perform or observe any material term, covenant,
condition or agreement hereunder, other than as contained in subsections (a) through
(k) above, or in any other Loan Document, within thirty (30) days after receipt of notice
from Lender identifying such failure, provided such period shall be extended for up to thirty (30)
additional days if Borrower, in the discretion of Lender, is diligently pursuing a cure of such
default within thirty (30) days after receipt of notice from Lender.

ARTICLE 12

REMEDIES

     Section 12.01. Remedies; Waivers.

     Upon the occurrence of an Event of Default, Lender may do any one or more of the following
(without presentment, protest or notice of protest, all of which are expressly waived by Borrower
Party):

     (a) Lender may, at its sole option, cease making Future Advances and Additional
Loans, permitting Substitutions under this Agreement, permitting Conversions or closing any
Requests and/or not permitting any new Requests under this Agreement.

     (b) by written notice to 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 Borrower to 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 Borrower to Lender under any of the Loan Documents will become
forthwith due and payable.

     (c) Lender may accelerate any Note without the obligation, but the right 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 obligation
(but with the right) 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 to the Obligations as determined by Lender in its sole and
absolute discretion.

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

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

     Section 12.02. Waivers; Rescission of Declaration.

     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 Lender and delivered to 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 12.03. Lender’s Right to Protect Collateral and Perform Covenants and Other
Obligations.

     If Borrower or Guarantor fails to perform the covenants and agreements contained in this
Agreement or any of the other Loan Documents, then Lender at Lender’s option may make such
appearances, disburse such sums and take such action as Lender deems necessary, in its sole
discretion, to protect Lender’s interest, including (a) disbursement of reasonable attorneys’ fees,
(b) entry upon the Mortgaged Property to make repairs and replacements, (c) procurement of
satisfactory insurance as provided in Section 5 of the Security Instrument encumbering the
Mortgaged Property, and (d) if the Security Instrument is on a leasehold, exercise of any option to
renew or extend the ground lease on behalf of Borrower and the curing of any default of Borrower in
the terms and conditions of the ground lease. Any amounts disbursed by Lender pursuant to this
Section 12.03, with interest thereon, shall become additional Indebtedness of Borrower
secured by the Loan Documents. Unless Borrower and 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 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 Borrower under Applicable Law. Nothing contained in this Section 12.03 shall
require Lender to incur any expense or take any action hereunder.

     Section 12.04. 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 12.05. 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

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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 12.06.
No Notice.

     To entitle Lender to exercise any remedy reserved to 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.

ARTICLE 13

INSURANCE, REAL ESTATE TAXES AND REPLACEMENT RESERVES

     Section 13.01. Insurance and Real Estate Taxes.

     Borrower shall (unless waived by Lender in the Security Instrument) 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.

     Section 13.02. Replacement Reserves.

     Borrower shall execute a Replacement Reserve Agreement for the Mortgaged Properties and shall
(unless waived by Lender pursuant to the Replacement Reserve Agreement) make all deposits for
replacement reserves in accordance with the terms of the Replacement Reserve Agreement.

ARTICLE 14

LIMITS ON PERSONAL LIABILITY

     Section 14.01. Personal Liability to Borrower.

     (a) Limits on Personal Liability. Except as otherwise provided in this Section 14.01,
Borrower and Guarantor shall have no personal liability under the Loan Documents for the
repayment of any Indebtedness or for the performance of any other Obligations of Borrower
under the Loan Documents, 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 Mortgaged Properties and any other Collateral held by Lender as security
for
the Indebtedness.

     (b) Exceptions to Limits on Personal Liability. Borrower and Guarantor shall be
personally liable to Lender 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 Lender as a result of (i)
failure of Borrower to pay to Lender upon demand after an Event of Default all Rents to which
Lender is entitled under Section 3(a) of the Security Instrument encumbering the Mortgaged
Property and the amount of all security deposits collected by Borrower from tenants then in
residence; (ii) failure of Borrower to apply all insurance proceeds, condemnation proceeds or
security deposits from tenants as required by the Security Instrument encumbering the
Mortgaged Property; (iii) failure of such Borrower or Guarantor to comply with its obligations

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under the Loan Documents with respect to the delivery of books and records and financial
statements; (iv) fraud or written material misrepresentation by Borrower or Guarantor, or any
officer, director, partner, member or employee of Borrower or Guarantor in connection with the
application for or creation of the Obligations or any request for any action or consent by Lender;
or (v) failure to apply Rents (including pre-paid rents), first, to the payment of reasonable
operating expenses and then to amounts (“Debt Service Amounts”) payable under the Loan Documents
(except that Borrower or Guarantor will not be personally liable (A) to the extent that Borrower
or Guarantor lacks the legal right to direct the disbursement of such sums because of a
bankruptcy, receivership or similar judicial proceeding, or (B) with respect to Rents of a
Mortgaged Property that are distributed in any Calendar Quarter if Borrower has paid all operating
expenses and Debt Service Amounts for that Calendar Quarter).

     (c) Full Recourse. Borrower and Guarantor shall be personally liable to Lender for
the payment and performance of all Obligations upon the occurrence of any of the following:
(i)
Borrower acquisition of any property or operation of any business not permitted by the Single
Purpose requirements in the Loan Documents; or (ii) a Transfer that is an Event of Default
under
any Loan Documents; or (iii) Borrower’s failure to honor any and all indemnification
obligations
contained in Section 18 (environmental) of any Security Instrument; or (iv) any of the items
identified in Section 11.01 (f)(i)(A) through (H), inclusive.

     (d) Miscellaneous. To the extent that Borrower or Guarantor has personal liability
under this Section 14.01, or Guarantor has liability under the Guaranty, such
liability shall be
joint and several and Lender may exercise its rights against Borrower or Guarantor personally
without regard to whether 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 Lender under the Loan Documents or Applicable Law. For purposes of this Article 14, the
term “Mortgaged Property” shall not include any funds that (i) have been applied by
Borrower
as required or permitted by the Loan Documents prior to the occurrence of an Event of Default,
or (ii) are owned by Borrower or Guarantor and which Borrower was unable to apply as required
or permitted by the Loan Documents because of a bankruptcy, receivership, or similar judicial
proceeding.

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

     Section 14.02. Additional Borrowers.

     If the owner of an Additional Mortgaged Property is a new Borrower, the owner of such
Additional Mortgaged Property must demonstrate to the satisfaction of Lender that:

     (a) such new Borrower complies with the definition of “Additional Borrower;” and

     (b) the Additional Borrower is a Single-Purpose entity, unless otherwise approved by
Lender.

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     In addition, on the Closing Date of the Addition of an Additional Mortgaged Property, the
owner of such Additional Mortgaged Property, if such owner is an Additional Borrower, shall become
a party to a contribution agreement in a manner satisfactory to Lender, shall deliver a
Certificate of Borrower in form and substance satisfactory to Lender, and execute and deliver,
along with the other Borrowers, Variable Facility Notes and/or Fixed Facility Notes. Any
Additional Borrower of an Additional Mortgaged Property which becomes added to the Collateral Pool
shall be a Borrower for purposes of this Agreement and shall execute and deliver to Lender an
amendment adding such Additional Borrower as a party to this Agreement and revising the Exhibits
hereto, as applicable, to reflect the Additional Mortgaged Property and Additional Borrower, in
each case satisfactory to Lender.

     Upon the release of a Mortgaged Property, Borrower which owns such Release Mortgaged Property
shall automatically without further action be released from its obligations under this Agreement
and the other Loan Documents except for (i) any liabilities or obligations of such Borrower which
arose prior to the Closing Date of such release and (ii) any Obligations that survive release as
specifically set forth in Section 18 (Environmental Hazards) of the Security Instrument.

     Section 14.03. Borrower Agency Provisions.

     (a) Each Borrower and Additional Borrower hereby irrevocably designates CMF 15
Portfolio LLC as the borrower agent (the “Borrower Agent”) to be its agent and in such
capacity to receive on behalf of Borrower all proceeds, receive all notices on behalf of
Borrower
under this Agreement, make all Requests under this Agreement, and execute, deliver and receive
all instruments, certificates, Requests, documents, amendments, writings and further
assurances
now or hereafter required hereunder, on behalf of such Borrower, and hereby authorizes Lender
to pay over all loan proceeds hereunder in accordance with the direction of Borrower Agent.
Each Borrower hereby acknowledges that all notices required to be delivered by Lender to any
Borrower shall be delivered to Borrower Agent and thereby shall be deemed to have been
received by such Borrower.

     (b) The handling of this Credit Facility as a co-borrowing facility with a Borrower Agent in the manner set forth in this Agreement is solely as an accommodation to Borrower and
is at their request. Lender shall not incur liability to Borrower as a result thereof. To
induce
Lender to do so and in consideration thereof, each Borrower hereby indemnifies Lender and
holds Lender harmless from and against any and all liabilities, expenses, losses, damages and
claims of damage or injury asserted against Lender by any Person arising from or incurred by
reason of Borrower Agent handling of the financing arrangements of Borrower as provided
herein, reliance by Lender on any request or instruction from Borrower Agent or any other
action
taken by Lender with respect to this Section 14.03 except due to willful misconduct or
gross
negligence of the indemnified party.

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     Section 14.04. Waivers With Respect to Other Borrower Secured Obligation (for Mortgaged
Properties located in California).

     To the extent that a Security Instrument or any other Loan Document executed by one Borrower
secures an Obligation of another Borrower (the “Other Borrower Secured Obligation”),
and/or to the extent that a Borrower has guaranteed the debt of another Borrower pursuant to
Article 14, Borrower who executed such Loan Document and/or guaranteed such debt (the
“Waiving Borrower”) hereby agrees, to the extent permitted by law, to the provisions of this
Section 14.04. To the extent that any Mortgaged Properties are located in California, and
to the extent permitted by law, the references to the California Code below shall apply to this
Agreement and any California Security Instrument securing a California Mortgaged Property,
otherwise the California Code shall have no effect on this Agreement or any other Loan Document.

     (a) The Waiving Borrower hereby waives any right it may now or hereafter have to require the beneficiary, assignee or other secured party under such Loan Document, as a
condition to the exercise of any remedy or other right against it thereunder or under any
other
Loan Document executed by the Waiving Borrower in connection with the Other Borrower
Secured Obligation: (i) to proceed against the other Borrower or any other person, or against
any
other collateral assigned to Lender by either Borrower or any other person; (ii) to pursue any
other right or remedy in Lender’s power; (iii) to give notice of the time, place or terms of
any
public or private sale of real or personal property collateral assigned to Lender by the other
Borrower or any other person (other than the Waiving Borrower), or otherwise to comply with
Section 9615 of the California Commercial Code (as modified or recodified from time to time)
with respect to any such personal property collateral located in the State of California; or
(iv) to
make or give (except as otherwise expressly provided in the Security Documents) any
presentment, demand, protest, notice of dishonor, notice of protest or other demand or notice
of
any kind in connection with the Other Borrower Secured Obligation or any collateral (other
than
the Collateral described in such Security Document) for the Other Borrower Secured Obligation.

     (b) The Waiving Borrower hereby waives any defense it may now or hereafter have
that relates to: (i) any disability or other defense of the other Borrower or any other
person; (ii)
the cessation, from any cause other than full performance, of the Other Borrower Secured
Obligation; (iii) the application of the proceeds of the Other Borrower Secured Obligation, by
the
other Borrower or any other person, for purposes other than the purposes represented to the
Waiving Borrower by the other Borrower or otherwise intended or understood by the Waiving
Borrower or the other Borrower; (iv) any act or omission by Lender which directly or
indirectly
results in or contributes to the release of the other Borrower or any other person or any
collateral
for any Other Borrower Secured Obligation; (v) the unenforceability or invalidity of any
Security
Document or Borrower Document (other than the Security Instrument executed by the Waiving Borrower that secures the Other Borrower Secured Obligation) or guaranty with respect to any
Other Borrower Secured Obligation, or the lack of perfection or continuing perfection or lack
of
priority of any Lien (other than the Lien of such Security Instrument) which secures any Other
Borrower Secured Obligation; (vi) any failure of Lender to marshal assets in favor of the
Waiving Borrower or any other person; (vii) any modification of any Other Borrower Secured
Obligation, including any renewal, extension, acceleration or increase in interest rate;
(viii) any

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and all rights and defenses arising out of an election of remedies by Lender, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed the Waiving Borrower’s rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the California Code of Civil Procedure or
otherwise; (ix) any law which provides that the obligation of a surety or guarantor must neither
be larger in amount nor in other respects more burdensome than that of the principal or which
reduces a surety’s or guarantor’s obligation in proportion to the principal obligation; (x) any
failure of Lender to file or enforce a claim in any bankruptcy or other proceeding with respect to
any person; (xi) the election by Lender, in any bankruptcy proceeding of any person, of the
application or non-application of Section 1111(b)(2) of the Bankruptcy Code; (xii) any extension
of credit or the grant of any lien under Section 364 of the Bankruptcy Code; (xiii) any use of
cash collateral under Section 363 of the Bankruptcy Code; or (xiv) any agreement or stipulation
with respect to the provision of adequate protection in any bankruptcy proceeding of any person.
The Waiving Borrower further waives any and all rights and defenses that it may have because the
Other Borrower Secured Obligation is secured by real property; this means, among other things,
that: (A) Lender may collect from the Waiving Borrower without first foreclosing on any real or
personal property collateral pledged by the other Borrower; (B) if Lender forecloses on any real
property collateral pledged by the other Borrower, then (C) the amount of the Other Borrower
Secured Obligation may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price; and (D) Lender may
foreclose on the real property encumbered by the Security Instrument executed by the Waiving
Borrower and securing the Other Borrower Secured Obligation even if Lender, by foreclosing on the
real property collateral of the Other Borrower, has destroyed any right the Waiving Borrower may
have to collect from the Other Borrower. Subject to the last sentence of Section 14.03,
the foregoing sentence is an unconditional and irrevocable waiver of any rights and defenses the
Waiving Borrower may have because the Other Borrower Secured Obligation is secured by real
property. These rights and defenses being waived by the Waiving Borrower include, but are not
limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California
Code of Civil Procedure. Without limiting the generality of the foregoing or any other provision
hereof, the Waiving Borrower further expressly waives, except as provided in Section
14.04(g) below, to the extent permitted by law any and all rights and defenses, which might
otherwise be available to it under California Civil Code Sections 2787 to 2855, inclusive, 2899
and 3433, or under California Code of Civil Procedure Sections 580a, 580b, 580d and 726, or any of
such sections.

     (c) The Waiving Borrower hereby waives any and all benefits and defenses under California
Civil Code Section 2810 and agrees that by doing so the Security Instrument executed by the Waiving
Borrower and securing the Other Borrower Secured Obligation shall be and remain in full force and
effect even if the other Borrower had no liability at the time of incurring the Other Borrower
Secured Obligation, or thereafter ceases to be liable. The Waiving Borrower hereby waives any and
all benefits and defenses under California Civil Code Section 2809 and agrees that by doing so the
Waiving Borrower’s liability may be larger in amount and more burdensome than that of the other
Borrower. The Waiving Borrower hereby waives the benefit of all principles or provisions of law,
which are or might be in conflict with the terms of any of its waivers, and agrees that the Waiving
Borrower’s waivers shall not be affected by any circumstances, which might otherwise constitute a
legal or equitable discharge of a surety or a

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guarantor. The Waiving Borrower hereby waives the benefits of any right of discharge and all other
rights under any and all statutes or other laws relating to guarantors or sureties, to the fullest
extent permitted by law, diligence in collecting the Other Borrower Secured Obligation,
presentment, demand for payment, protest, all notices with respect to the Other Borrower Secured
Obligation, which may be required by statute, rule of law or otherwise to preserve Lender’s rights
against the Waiving Borrower hereunder, including notice of acceptance, notice of any amendment of
the Loan Documents evidencing the Other Borrower Secured Obligation, notice of the occurrence of
any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of
dishonor, notice of foreclosure, notice of protest, notice of the incurring by the other Borrower
of any obligation or indebtedness and all rights to require Lender to (i) proceed against the
other Borrower, (ii) proceed against any general partner of the other Borrower, (iii) proceed
against or exhaust any collateral held by Lender to secure the Other Borrower Secured Obligation,
or (iv) if the other Borrower is a partnership, pursue any other remedy it may have against the
other Borrower, or any general partner of the other Borrower, including any and all benefits under
California Civil Code Sections 2845, 2849 and 2850.

     (d) The Waiving Borrower understands that the exercise by Lender of certain rights
and remedies contained in a Security Instrument executed by the other Borrower (such as a
nonjudicial foreclosure sale) may affect or eliminate the Waiving Borrower’s right of
subrogation against the other Borrower and that the Waiving Borrower may therefore incur a
partially or totally nonreimburseable liability. Nevertheless, the Waiving Borrower hereby
authorizes and empowers Lender to exercise, in its sole and absolute discretion, any right or
remedy, or any combination thereof, which may then be available, since it is the intent and
purpose of the Waiving Borrower that its waivers shall be absolute, independent and
unconditional under any and all circumstances.

     (e) In accordance with Section 2856 of the California Civil Code, the Waiving
Borrower also waives any right or defense based upon an election of remedies by Lender, even
though such election (e.g., nonjudicial foreclosure with respect to any collateral held by
Lender
to secure repayment of the Other Borrower Secured Obligation) destroys or otherwise impairs
the subrogation rights of the Waiving Borrower to any right to proceed against the other
Borrower for reimbursement, or both, by operation of Section 580d of the California Code of
Civil Procedure or otherwise.

     (f) In accordance with Section 2856 of the California Civil Code, the Waiving Borrower waives
any and all other rights and defenses available to the Waiving Borrower by reason of Sections 2787
through 2855, inclusive, of the California Civil Code, including any and all rights or defenses the
Waiving Borrower may have by reason of protection afforded to the other Borrower with respect to
the Other Borrower Secured Obligation pursuant to the antideficiency or other laws of the State of
California limiting or discharging the Other Borrower Secured Obligation, including Sections 580a,
580b, 580d, and 726 of the California Code of Civil Procedure.

     (g) In accordance with Section 2856 of the California Civil Code and pursuant to any other
Applicable Law, the Waiving Borrower agrees to withhold the exercise of any and all subrogation,
contribution and reimbursement rights against Borrower, against any other person,

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and against any collateral or security for the Other Borrower Secured Obligation, including any
such rights pursuant to Sections 2847 and 2848 of the California Civil Code, until the Other
Borrower Secured Obligation has been indefeasibly paid and satisfied in full, all obligations owed
to Lender under the Loan Documents have been fully performed, and Lender have released,
transferred or disposed of all of their right, title and interest in such collateral or security.

     (h) Each Borrower hereby irrevocably and unconditionally agrees that in the event that,
notwithstanding Section 14.04(g) hereof, to the extent its agreement and waiver set forth
in Section 14.04(g) is found by a court of competent jurisdiction to be void or voidable
for any reason and such Borrower has any subrogation or other rights against any other Borrower,
any such claims, direct or indirect, that such Borrower may have by subrogation rights or other
form of reimbursement, contribution or indemnity, against any other Borrower or to any security or
any such Borrower, shall be and such rights, claims and indebtedness are hereby deferred, postponed
and fully subordinated in time and right of payment to the prior payment, performance and
satisfaction in full of the Obligations. Until payment and performance in full with interest
(including post-petition interest in any case under any chapter of the Bankruptcy Code) of the
Obligations, each Borrower agrees not to accept any payment or satisfaction of any kind of
Indebtedness of any other Borrower in respect of any such subrogation rights arising by virtue of
payments made pursuant to this Article 14, and hereby assigns such rights or indebtedness
to Lender, including the right to file proofs of claim and to vote thereon in connection with any
case under any chapter of the Bankruptcy Code, including the right to vote on any plan of
reorganization. In the event that any payment on account of any such subrogation rights shall be
received by any Borrower in violation of the foregoing, such payment shall be held in trust for the
benefit of Lender, and any amount so collected should be turned over to Lender for application to
the Obligations.

     (i) At any time without notice to the Waiving Borrower, and without affecting or prejudicing
the right of Lender to proceed against the Collateral described in any Loan Document executed by
the Waiving Borrower and securing the Other Borrower Secured Obligation, (i) the time for payment
of the principal of or interest on, or the performance of, the Other Borrower Secured Obligation
may be extended or the Other Borrower Secured Obligation may be renewed in whole or in part; (ii)
the time for the other Borrower’s performance of or compliance with any covenant or agreement
contained in the Loan Documents evidencing the Other Borrower Secured Obligation, whether
presently existing or hereinafter entered into, may be extended or such performance or compliance
may be waived; (iii) the maturity of the Other Borrower Secured Obligation may be accelerated as
provided in the related Note or any other related Loan Document; (iv) the related Note or any
other related Loan Document may be modified or amended by Lender and the other Borrower in any
respect, including an increase in the principal amount; and (v) any security for the Other
Borrower Secured Obligation may be modified, exchanged, surrendered or otherwise dealt with or
additional security may be pledged or mortgaged for the Other Borrower Secured Obligation.

     (j) It is agreed among each Borrower and Lender that all of the foregoing waivers are of the
essence of the transaction contemplated by this Agreement and the Loan Documents and

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that but for the provisions of this Article 14 and such waivers Lender would decline to
enter into this Agreement.

     Section 14.05. Joint and Several Obligation; Cross-Guaranty.

     Notwithstanding anything contained in this Agreement or the other Borrower Documents to the
contrary (but subject to the last sentence of this Section 14.05 and the provisions of
Section 14.01 and Section 14.12), each Borrower shall have joint and several
liability for all Obligations. Notwithstanding the intent of all of the parties to this Agreement
that all Obligations of each Borrower under this Agreement and the other Borrower Documents shall
be joint and several Obligations of each Borrower, each Borrower, on a joint and several basis,
hereby irrevocably guarantees to Lender and its successors and assigns, the full and prompt
payment (whether at stated maturity, by acceleration or otherwise) and performance of, all
Obligations owed or hereafter owing to Lender by each other Borrower. Each Borrower agrees that
its guaranty obligation hereunder is an unconditional guaranty of payment and performance and not
merely a guaranty of collection. The Obligations of each Borrower under this Agreement shall not
be subject to any counterclaim, set-off, recoupment, deduction, cross-claim or defense based upon
any claim any Borrower may have against Lender or any other Borrower.

     Section 14.06. No Impairment.

     Each Borrower agrees that the provisions of this Article 14 are for the benefit of
Lender and their successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Lender, the obligations of such other Borrower
under the Loan Documents.

     Section 14.07. Election of Remedies.

          (a) Lender, in its discretion, may (i) bring suit against any one or more Borrower, jointly
and severally, without any requirement that Lender first proceed against any other Borrower or any
other Person; (ii) compromise or settle with any one or more Borrower, or any other Person, for
such consideration as Lender may deem proper; (iii) release one or more Borrower, or any other
Person, from liability; and (iv) otherwise deal with any Borrower and any other Person, or any one
or more of them, in any manner, or resort to any of the Collateral at any time held by it for
performance of the Obligations or any other source or means of obtaining payment of the
Obligations, and no such action shall impair the rights of Lender to collect from any Borrower any
amount guaranteed by any Borrower under this Article 14.

          (b) If, in the exercise of any of its rights and remedies, Lender shall forfeit any of its
rights or remedies, including its rights to enter a deficiency judgment against any Borrower or any
other Person, whether because of any Applicable Laws pertaining to “election of remedies” or the
like, each Borrower hereby consents to such action by Lender and waives any claim based upon such
action, even if such action by Lender shall result in a full or partial loss or any rights of
subrogation which each Borrower might otherwise have had but for such action by Lender. Any
election of remedies which results in the denial or impairment of the right of

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Lender to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations. In the event Lender shall bid at any
foreclosure or trustee’s sale or at any private sale permitted by law or any of the Loan
Documents, Lender may bid all or less than the amount of the Obligations and the amount of such
bid need not be paid by Lender but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Lender or any other party is the successful bidder, shall
be conclusively deemed to be fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively deemed to be amount
of the Obligations guaranteed under this Article 14, notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the amount of any
deficiency claim to which Lender might otherwise be entitled but for such bidding at any such
sale.

     Section 14.08. Subordination of Other Obligations.

     (a) Each Borrower hereby irrevocably and unconditionally agrees that all amounts payable from
time to time to such Borrower by any other Borrower pursuant to any agreement, whether secured or
unsecured, whether of principal, interest or otherwise, other than the amounts referred to in this
Article 14 (collectively, the “Subordinated Obligations”), shall be and such
rights, claims and indebtedness are, hereby deferred, postponed and fully subordinated in time and
right of payment to the prior payment, performance and satisfaction in full of the Obligations;
provided, however, that payments may be received by any Borrower in accordance with, and only in
accordance with, the provisions of Section 14.08(b) hereof.

     (b) Until the Obligations under all the Loan Documents have been finally paid in full or fully
performed and all the Loan Documents have been terminated, each Borrower irrevocably and
unconditionally agrees it will not ask, demand, sue for, take or receive, directly or indirectly,
by set-off, redemption, purchase or in any other manner whatsoever, any payment with respect to, or
any security or guaranty for, the whole or any part of the Subordinated Obligations, and in issuing
documents, instruments or agreements of any kind evidencing the Subordinated Obligations, each
Borrower hereby agrees that it will not receive any payment of any kind on account of the
Subordinated Obligations, so long as any of the Obligations under all the Loan Documents are
Outstanding or any of the terms and conditions of any of the Loan Documents are in effect;
provided, however, that, notwithstanding anything to the contrary contained herein, if no Potential
Event of Default or Event of Default or any other event or condition which would constitute an
Event of Default after notice or lapse of time or both has occurred and is continuing under any of
the Loan Documents, then (i) payments may be received by such Borrower in respect of the
Subordinated Obligations in accordance with the stated terms thereof; and (ii) each Borrower and
Guarantor shall be permitted to make distributions in accordance with the terms of the applicable
Organizational Documents. Except as aforesaid, each Borrower agrees not to accept any payment or
satisfaction of any kind of indebtedness of any other Borrower in respect of the Subordinated
Obligations and hereby assigns such rights or indebtedness to Fannie Mae, including the right to
file proofs of claim and to vote thereon in connection with any case under any chapter of the
Bankruptcy Code, including the right to vote on any plan of reorganization. In the event that any
payment on account of Subordinated Obligations shall be received by any

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Borrower in violation of the foregoing, such payment shall be held in trust for the benefit of
Lender, and any amount so collected shall be turned over to Lender upon demand.

     Section 14.09. Insolvency and Liability of Other Borrower.

     So long as any of the Obligations are Outstanding, if a petition under any chapter of the
Bankruptcy Code is filed by or against any Borrower (the “Subject Borrower” for the
purposes of Section 14.09, Section 14.10, Section 14.11 and Section
14.12 of this Agreement), each other Borrower (each, an “Other Borrower” for the
purposes of Section 14.09, Section 14.10, Section 14.11 and Section
14.12 of this Agreement) agrees to file all claims against the Subject Borrower in any
bankruptcy or other proceeding in which the filing of claims is required by law in connection with
indebtedness owed by the Subject Borrower and to assign to Lender all rights thereunder up to the
amount of such indebtedness. In all such cases, the Person or Persons authorized to pay such
claims shall pay to Lender the full amount thereof and Lender agrees to pay such Other Borrower
any amounts received in excess of the amount necessary to pay the Obligations. Each Other Borrower
hereby assigns to Lender all of such Borrower’s rights to all such payments to which such Other
Borrower would otherwise be entitled but not to exceed the full amount of the Obligations. In the
event that, notwithstanding the foregoing, any such payment shall be received by any Other
Borrower before the Obligations shall have been finally paid in full, such payment shall be held
in trust for the benefit of and shall be paid over to Lender upon demand. Furthermore,
notwithstanding the foregoing, the liability of each Borrower hereunder shall in no way be
affected by:

     (a) the release or discharge of any Other Borrower in any creditors’, receivership,
bankruptcy or other proceedings; or

     (b) the impairment, limitation or modification of the liability of any Other Borrower or the
estate of any Other Borrower in bankruptcy resulting from the operation of any present or future
provisions of any chapter of the Bankruptcy Code or other statute or from the decision in any
court.

     Section 14.10. Preferences, Fraudulent Conveyances, Etc.

     If Lender is required to refund, or voluntarily refunds, any payment received from any
Borrower because such payment is or may be avoided, invalidated, declared fraudulent, set aside or
determined to be void or voidable as a preference, fraudulent conveyance, impermissible setoff or a
diversion of trust funds under the bankruptcy laws or for any similar reason, including without
limitation any judgment, order or decree of any court or administrative body having jurisdiction
over any Borrower or any of its property, or upon or as a result of the appointment of a receiver,
intervenor, custodian or conservator of, or trustee or similar officer for, any Borrower or any
substantial part of its property, or otherwise, or any statement or compromise of any claim
effected by Lender with any Borrower or any other claimant (a “Rescinded Payment”), then
each Other Borrower’s liability to Lender shall continue in full force and effect, or each Other
Borrower’s liability to Lender shall be reinstated and renewed, as the case may be, with the same
effect and to the same extent as if the Rescinded Payment had not been received by Lender,
notwithstanding the cancellation or termination of any of the Loan Documents, and regardless of

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whether Lender contested the order requiring the return of such payment. In addition, each Other
Borrower shall pay, or reimburse Lender for, all expenses (including all reasonable attorneys’
fees, court costs and related disbursements) incurred by Lender in the defense of any claim that a
payment received by Lender in respect of all or any part of the Obligations must be refunded. The
provisions of this Section 14.10 shall survive the termination of Borrower Documents and
any satisfaction and discharge of any Borrower by virtue of any payment, court order or any
federal or state law.

     Section 14.11. Maximum Liability of Each Borrower.

     Notwithstanding anything contained in this Agreement or any of the Loan Documents to the
contrary, if the obligations of any Borrower under this Agreement or any of the other Loan
Documents or any Security Instruments granted by any Borrower are determined to exceed the
reasonably equivalent value received by such Borrower in exchange for such obligations or grant of
such Security Instruments under any Fraudulent Transfer Law (as hereinafter defined), then such
liability of such Borrower shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its obligations under this Agreement or all the Other Borrower
Documents subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law (collectively, the
“Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of
such Borrower, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Borrower in respect of Indebtedness to
any Other Borrower or any other Person that is an Affiliate of the Other Borrower to the extent
that such Indebtedness would be discharged in an amount equal to the amount paid by such Borrower
in respect of the Obligations) and after giving effect (as assets) to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Borrower pursuant to Applicable Law or
pursuant to the terms of any agreement including any contribution agreement.

     Section 14.12. Liability Cumulative.

     The liability of each Borrower under this Article 14 is in addition to and shall be
cumulative with all liabilities of such Borrower to Lender under this Agreement and all the other
Loan Documents to which such Borrower is a party or in respect of any Obligations of any Other
Borrower.

ARTICLE 15

MISCELLANEOUS PROVISIONS

     Section 15.01. 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

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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 15.02. 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 15.03. Payment of Costs, Fees and Expenses.

     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 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 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 Lender and Borrower and Guarantor 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) Any disclosure documents, including fees payable to any rating agencies, including the
fees and expenses of Lender’s attorneys and accountants.

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. Any attorneys’ fees and
expenses payable by Borrower pursuant to this Section 15.03 shall be recoverable
separately from and in addition to any other amount included in such judgment, and such obligation
is intended to be severable from the other provisions of this Agreement and to survive and not be
merged into any such judgment. Any amounts payable by Borrower pursuant to this Section
15.03, with interest thereon if not paid when due, shall become additional Indebtedness of
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 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 Borrower under Applicable Law. The
provisions of this Section 15.03 are cumulative with, and do not exclude the application
and benefit to Lender of, any provision of any other Loan Document relating to any of the matters
covered by this Section 15.03.

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     Section 15.04. Payment Procedure.

     All payments to be made to 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 Lender before 2:00 p.m. (Eastern Standard Time
or Eastern Daylight Savings Time, as applicable) on the date when due.

     Section 15.05. Payments on Business Days.

     In any case in which the date of payment to 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 15.06. 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 BORROWER
UNDER THIS AGREEMENT AND THE NOTES, GUARANTOR UNDER THE GUARANTY, AND BORROWER, GUARANTOR AND
LENDER 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 (a) 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, (b) 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 UNIFORM
COMMERCIAL CODE IN EFFECT FOR THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED AND (c)
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. BORROWER, GUARANTOR AND LENDER AGREE THAT ANY CONTROVERSY ARISING UNDER OR IN RELATION TO
THE NOTES, THE SECURITY DOCUMENTS (OTHER THAN THE SECURITY INSTRUMENTS) OR ANY OTHER LOAN DOCUMENT
SHALL BE, EXCEPT AS OTHERWISE PROVIDED HEREIN, LITIGATED IN DISTRICT OF COLUMBIA. THE LOCAL AND
FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN

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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 (OTHER THAN THE SECURITY INSTRUMENTS) OR ANY OTHER ISSUE ARISING
UNDER, RELATING TO, OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS. BORROWER, GUARANTOR AND LENDER
IRREVOCABLY CONSENT 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 LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS AGAINST BORROWER AND GUARANTOR 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 BORROWER AND GUARANTOR AND
LENDER AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY BORROWER AND GUARANTOR TO PERSONAL
JURISDICTION WITHIN DISTRICT OF COLUMBIA. BORROWER AND GUARANTOR (i) COVENANT AND AGREE 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) WAIVE 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, BORROWER AND GUARANTOR HEREBY
CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING, BUT NOT LIMITED TO, LENDER’S COUNSEL)
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER AND GUARANTOR THAT LENDER WILL NOT SEEK TO
ENFORCE THE PROVISIONS OF THIS SECTION 15.06. THE FOREGOING PROVISIONS WERE KNOWINGLY,
WILLINGLY AND VOLUNTARILY AGREED TO BY BORROWER AND GUARANTOR UPON CONSULTATION WITH INDEPENDENT
LEGAL COUNSEL SELECTED BY BORROWER’S AND GUARANTOR’S FREE WILL.

     Section 15.07. 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.

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     Section 15.08. Notices.

     (a) Manner of Giving Notice. Each notice, direction, certificate or other
communication hereunder (in this Section 15.08 referred to collectively as “notices” and
singularly 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:

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

          (ii) sent by Federal Express (or other similar reputable 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);

          (iii) 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 (i) or (ii) above within two (2) Business Days)
(any notice so delivered shall be deemed to have been received (A) on the date of transmission, if
so transmitted before 5:00 p.m. (local time of the recipient) on a Business Day, or (B) 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 Borrower:

	 	CMF 15 Portfolio LLC
	 

	 	2101 6th Avenue North, Suite 750
	 

	 	PO Box 11687
	 

	 	Birmingham, Alabama 35202-1687
	 

	 	Attention: Jerry Brewer, Executive Vice President
	 

	 	Telecopy No.: 205-250-8890
	 
	 	 
	with a copy to:

	 	Leitman, Siegal & Payne
	 

	 	600 North 20th Street
	 

	 	Birmingham, Alabama 35203
	 

	 	Attention: Brad Siegal, Esq.
	 

	 	Telecopy No.: 205-323-2098
	 
	 	 
	As to Lender:

	 	PNC ARCS LLC
	 

	 	26901 Agoura Road, Suite 200
	 

	 	Calabasas Hills, CA 91301
	 

	 	Attention: Timothy L. White
	 

	 	Telecopy No.: 818-880-3330
	 
	 	 
	with a copy to:

	 	One PNC Plaza
	 

	 	249 Fifth Avenue

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	 	Pittsburgh, PA 15222
	 

	 	Attention: D. Scott Bassin
	 

	 	Telecopy No.: 412-705-1645
	 
	 	 
	As to Guarantor:

	 	Colonial Realty Limited Partnership
	 

	 	2101 6th Avenue North, Suite 750
	 

	 	PO Box 11687
	 

	 	Birmingham, AL 35202-1687
	 

	 	Attention: Jerry Brewer, Executive Vice President
	 

	 	Telecopy No.: 205-250-8890
	 
	 	 
	with a copy to:

	 	Leitman, Siegal & Payne
	 

	 	600 North 20th Street
	 

	 	Birmingham, AL 35203
	 

	 	Attention: Brad Siegal, Esq.
	 

	 	Telecopy No.: 205-323-2098
	 
	 	 
	As to Fannie Mae:

	 	Fannie Mae
	 

	 	3900 Wisconsin Avenue, N.W.
	 

	 	Washington, D.C. 20016-2899
	 

	 	Attention: Vice President for Multifamily Asset Management
	 

	 	Telecopy No.: (301) 280-2064
	 
	 	 
	with a copy to:

	 	Venable LLP
	 

	 	575 7th Street, N.W.
	 

	 	Washington, D.C. 20004
	 

	 	Attention: Stephanie L. DeLong, Esq.
	 

	 	Telecopy No.: (202) 344-8300

     (b) Change of Notice Address. Any party may, by notice given pursuant to this
Section 15.08, change the person or persons and/or address or addresses, or designate an
additional person or persons or an additional address or addresses, for its notices, but notice of
a change of address shall only be effective upon receipt. Each party agrees that it shall not
refuse or reject delivery of any notice given hereunder, that it shall acknowledge, in writing,
receipt of the same upon request by the other party and that any notice rejected or refused by it
shall be deemed for all purposes of this Agreement to have been received by the rejecting party on
the date so refused or rejected, as conclusively established by the records of the U.S. Postal
Service, the courier service or facsimile.

     Section 15.09. 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 Lender or
Borrower may request and as may be required in the opinion of Lender or its counsel to preserve

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Lender’s perfected lien status, or 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 Lender to correct patent
mistakes in the Loan Documents, materials relating to the Title Insurance Policies or the funding
of the Advances, Borrower shall provide, or cause to be provided to Lender, at its cost and
expense, such documentation or information. Borrower shall execute and deliver to 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 Lender.

     (c) Compliance with Investor Requirements. Without limiting the generality of
subsection (a), Borrower shall do anything necessary to comply with the reasonable
requirements of Lender to enable Lender to sell any Advance or Additional Loan to Fannie Mae.

     Section 15.10. Term of this Agreement.

     This Agreement shall continue in effect until the Termination Date.

     Section 15.11. Assignments; Third-Party Rights.

     Borrower shall not assign this Agreement, or delegate any of its obligations hereunder,
without the prior written consent of Lender. Lender may assign its rights and obligations under
this Agreement separately or together, without Borrower’s consent, only to Fannie Mae or other
entity if such assignment is made with the intent that such entity will further assign rights and
obligations to Fannie Mae, but may not delegate its obligations under this Agreement unless it
first receives Fannie Mae’s written approval. Upon assignment to Fannie Mae, Fannie Mae shall be
permitted to further assign its rights and obligations under this Agreement.

     Section 15.12. 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 15.13. General Interpretive Principles.

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

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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 15.14. 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 15.15. Standards for Decisions, Etc.

     Unless otherwise provided herein, if Lender’s approval is required for any matter hereunder,
such approval may be granted or withheld in Lender’s sole and absolute discretion. Unless
otherwise provided herein, if 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 Lender’s sole and absolute discretion.

     Section 15.16. Decisions in Writing.

     Any approval, designation, determination, selection, action or decision of Lender or Borrower
must be in writing to be effective.

     Section 15.17. Approval of Waivers.

     Unless otherwise agreed by Lender, any modifications set forth in this Agreement and the other
Loan Documents which are modifications to or waivers from the terms and conditions applicable to
similar loans made by Lender and sold to Fannie Mae shall remain in effect with respect to a
Mortgaged Property or an Advance only for so long as such Mortgaged Property and Advance are
subject to this Agreement and such Borrower is controlled by Guarantor and is a party to this
Agreement.

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     Section 15.18. USA Patriot Act.

     Lender hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify
and record information that identifies each Borrower, which information includes the name and
address of each Borrower and other information that will allow such Lender to identify each
Borrower in accordance with such Act.

     Section 15.19. All Asset Filings.

     If Lender believes that an “all-asset” collateral description, as contemplated by Section
9-504(2) of the UCC, is appropriate as to any Collateral under any Loan Document, Lender is
irrevocably authorized to use such a collateral description, whether in one or more separate
filings or as part of the collateral description in a filing that particularly describes the
Collateral.

     Section 15.20. Recitals.

     The Recitals set forth in this Agreement are incorporated herein as if fully set forth in the
body of the Agreement.

[Remainder of page intentionally left 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:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jerry A. Brewer
 

	 	 
	 

	 	 	 	 	 	Name:
	 	Jerry A. Brewer

	 	 
	 

	 	 	 	 	 	Title:
	 	Executive Vice President	 	 

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	 	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COLONIAL REALTY LIMITED

PARTNERSHIP, a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Properties Trust, an Alabama real

estate investment trust	 	 
	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Jerry A. Brewer
 

	 	 
	 

	 	 	 	Name:
	 	Jerry A. Brewer

	 	 
	 

	 	 	 	Title:
	 	Executive Vice President	 	 

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	 	LENDER:

PNC ARCS LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Tim White
 	 
	 	Name:  	Tim White 	 
	 	Title:  	President 	 
	 

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APPENDIX I

DEFINITIONS

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

     “Addition” shall have the meaning set forth in Section 3.02.

     “Addition Fee” means, with respect to a Multifamily Residential Property added to the
Collateral Pool in accordance with Article 3, the product of

     (a) 45 basis points (0.45%), multiplied by

     (b) the Allocable Facility Amount of the Mortgaged Property, as determined by Lender.

     “Addition Loan Documents” means the Security Instrument covering an Additional
Mortgaged Property and any other documents, instruments or certificates reasonably required by
Lender in form and substance satisfactory to Lender and Borrower connection with the Addition of
the Additional Mortgaged Property to the Collateral Pool pursuant to Article 3.

     “Addition Request” means a written request, substantially in the form of Exhibit
L to the Agreement, to add Additional Mortgaged Properties to the Collateral Pool as set forth
in Section 3.02(a).

     “Additional Borrower” means the owner of an Additional Mortgaged Property, which
entity has been approved by Lender and becomes a Borrower under the Agreement and the applicable
Loan Documents.

     “Additional Collateral Due Diligence Fees” means the due diligence fees paid by
Borrower to Lender with respect to each Additional Mortgaged Property, as set forth in Section
10.03(b).

     “Additional Mortgaged Property” means each Multifamily Residential Property owned by
any Borrower or Additional Borrower (either in fee simple or as tenant under a ground lease
meeting all of Lender’s requirements for similar loans anticipated to be sold to Fannie Mae) and
added to the Collateral Pool after the Initial Closing Date pursuant to Article 3.

     “Additional Origination Fee” shall have the meaning set forth in Section
10.02(b).

     “Adjustable Rate” has the meaning set forth in each Variable Facility Note evidencing
a SARM Variable Advance.

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

     “Advance Amount” means the lesser of (a) the amount that would result in an Aggregate
Loan to Value Ratio of not more than sixty-five percent (65%), or (b) the amount that would result
in (x) an Aggregate Debt Service Coverage Ratio of not less than 1.35:1.0 for the portion

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of the Advance drawn from the Fixed Facility Commitment and (y) an Aggregate Debt Service Coverage
Ratio of not less than 1.10:1.0 for the portion of the Advance drawn from the Variable Facility
Commitment, provided that such amount shall not exceed one hundred three percent (103%).

     “Advance Request” means a written request, substantially in the form of Exhibit K to the Agreement, for an Advance made pursuant to Section 2.03.

     “Affiliate” or “Affiliated” means, when used with reference to a specified
Person, (a) any Person that, directly or indirectly, through one or more intermediaries, controls
or is controlled by, or is under common control with, the specified Person, (b) any Person that is
an officer of, partner in or trustee of, or serves in a similar capacity with respect to, the
specified Person or of which the specified Person is an officer, partner or trustee, or with
respect to which the specified Person serves in a similar capacity, (c) any Person that, directly
or indirectly, is the beneficial owner of ten percent (10%) or more of any class of equity
securities of, or otherwise has a substantial beneficial interest in, the specified Person or of
which the specified Person is, directly or indirectly, the owner of ten percent (10%) or more of
any class of equity securities or in which the specified Person has a substantial beneficial
interest, and (d) for the specified Person, any of the individual’s spouse, issue, parents,
siblings and a trust for the benefit of the individual’s spouse or issue, or both. 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, ownership interests or by contract or otherwise.

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

	 	(a)	 	the aggregate of the Net Operating Income 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 the Master Credit Facility Agreement, as it may be amended,
supplemented or otherwise modified from time to time, including all Recitals, Appendices and

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Exhibits to the Agreement, each of which is hereby incorporated into the Agreement by this
reference.

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

     “Alterations” shall have the meaning set forth in Section 7.11.

     “Amortization Period” means the period of thirty (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 applicable 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 (as defined in the Security
Instrument), (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 applicable 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 the Agreement or any of the other Loan Documents.

     “Appraisal” means an appraisal of Multifamily Residential Property conforming to the
requirements of Lender for similar loans anticipated to be sold to Fannie Mae and accepted by
Lender.

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

     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy” as
now and hereafter in effect, or any successor statute.

     “Borrower” means, individually and collectively, (a) CMF 15 Portfolio LLC, a Delaware
limited liability company, and (b) any Additional Borrower becoming a party to this Agreement and
any other Loan Documents.

     “Borrower Agent” shall have the meaning set forth in Section 14.03(a).

     “Borrower Parties” means Borrower and Guarantor.

     “Borrower Party” shall mean any of the Borrower Parties, individually.

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

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     “Calendar Day” means any day in the Calendar Year.

     “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.

     “Calendar Year” means the twelve (12) month period from the first day of January to
and including the last day of December, and each twelve (12) month period thereafter.

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

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

     “Cash Collateral Account” means the cash collateral account established pursuant to
the Cash Collateral Agreement.

     “Cash Collateral Agreement” means a cash collateral, security and custody agreement
by and among Fannie Mae, Borrower and a collateral agent for Fannie Mae.

     “Cash Equivalents” means:

	 	(a)	 	securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the United
States having maturities of not more than twelve (12) months from the date of
acquisition. (For the purposes of this definition, agency securities shall mean
“Government Securities within the meaning of the Investment Act of 1940 or Section
1.860G-2(a)(8)(l) of the Treasury Regulations.
	 
	 	(b)	 	certificates of deposit, time deposits, demand deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers’
acceptances, having in each case a term of not more than twelve (12) months, issued by
any commercial bank having membership in the FDIC, or by any U.S. commercial lender
(or any branch or agency of a non-U.S. bank licensed to conduct business in the U.S.)
having combined capital and surplus of not less than $100,000,000 whose short-term
securities are rated at least A-l by S&P or P-l by Moody’s Investors Service, Inc.;
and
	 
	 	(c)	 	commercial paper of an issuer rated at least A-l by S&P or P-l by Moody’s
Investors Service, Inc. and in either case having a term of not more than twelve (12)
months.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-4

 

 

     “Cash Interest Rate” means, on the date of determination, a rate of interest, per
annum, established by Fannie Mae for loans purchased for cash by Fannie Mae of similar
characteristics then offered by Fannie Mae.

     “Certificate of Borrower Parties” means the written instrument substantially in the
form of Exhibit J to the Agreement.

     “Change of Control” means, with respect to any individual or entity, the earliest to
occur of the following, as applicable:

	 	(i)	 	if such entity is a general partnership or a joint venture, a
Transfer of any general partnership interest or joint venture interest which
would cause the Initial Owners to own less than fifty-one percent (51%) of all
general partnership or joint venture interests in such entity;
	 
	 	(ii)	 	if such entity is a limited partnership, a Transfer (A) of any
general partnership interest, or (B) in which the General Partner ceases for
any reason to the sole general partner of Guarantor;
	 
	 	(iii)	 	if such entity is a limited liability company or a limited
liability partnership, a Transfer of (A) any managing member’s ownership
interest, or (B) any membership or other ownership interest which would cause
the Initial Owners to own less than fifty-one percent (51%) of all membership
or other ownership interests in such entity;
	 
	 	(iv)	 	if such entity is a corporation (other than a Publicly-Held
Corporation) with only one class of voting stock, a Transfer of any voting
stock which would cause the Initial Owners to own less than fifty-one percent
(51%) of voting stock in such corporation;
	 
	 	(v)	 	if such entity is a corporation (other than a Publicly-Held
Corporation) with more than one class of voting stock, a Transfer of any voting
stock which would cause the Initial Owners to own less than a sufficient number
of shares of voting stock having the power to elect the majority of directors
of such corporation;
	 
	 	(vi)	 	if such entity is a trust, the removal, appointment or
substitution of a trustee of such trust other than (A) in the case of a land
trust, or (B) if the trustee of such trust after such removal, appointment or
substitution is a trustee identified in the trust agreement approved by
Lender;
	 
	 	(vii)	 	the date on which Guarantor ceases for any reason to be the
holder, directly or indirectly, of at least one hundred percent (100%) of the
voting interests of any Borrower or to own, directly or indirectly at least
one hundred percent (100%) of the equity, profits or other partnership or
member interest in, or Voting Equity Capital (or any other Securities or
ownership interests) of Borrower;

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-5

 

 

	 	(viii)	 	the date on which General Partner ceases for any reason to be the
holder, directly or indirectly, of at least one hundred percent (100%) of
the voting interests of Guarantor or to own, directly or indirectly at
least one hundred percent (100%) of the Voting Equity Capital (or any other
Securities or ownership interests) of Guarantor, or ceases for any reason
to be the sole general partner of Guarantor;
	 
	 	(ix)	 	with respect to the General Partner or Guarantor, any merger,
consolidation or acquisition of the General Partner or Guarantor with or by a
Person that is an unrelated third party; provided that if there is a merger,
consolidation or acquisition of a unrelated third party by the General Partner
or Guarantor and (A) following such merger, consolidation or acquisition not
more than one (1) officer holding a Senior Management position of Guarantor or
General Partner shall have been or will be replaced in connection therewith,
and (B) the members of the Board of Directors or other governing body of
Guarantor or General Partner prior to such merger, consolidation or
acquisition shall constitute at least sixty-five percent (65%) of the Board of
Directors or other governing body of Guarantor or General Partner after such
merger, consolidation or acquisition, then such merger, consolidation or
acquisition by the General Partner or Guarantor shall not be deemed a Change
of Control;
	 
	 	(x)	 	the date on which a Person or Persons become (by acquisition,
consolidation, merger or otherwise), directly or indirectly, the beneficial
owner of more than, in the aggregate, twenty percent (20%) of the total Voting
Equity Capital (or of any other Securities or ownership interest) of the
General Partner then outstanding; or
	 
	 	(xi)	 	the replacement (other than solely by reason of retirement at
age sixty-five or older, death or disability) of fifty percent (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 Guarantor or of the General Partner over a
one-year period from the directors who constituted such board of directors at
the beginning of such period (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 (c) shall apply thereto by substituting
such governing body and the members thereof for the board of directors and
members thereof, respectively).

     (a) “Initial Owners” means, with respect to Borrower, Guarantor, or any other
entity, the persons or entities who on the date of the Agreement own in the aggregate
one
hundred percent (100%) of the ownership interests in Borrower, Guarantor or that
entity.

     (b) “Publicly-Held Corporation” shall mean a corporation the outstanding voting
stock of which is registered under Section 12(b) or 12(g) of the Securities and
Exchange Act of 1934, as amended.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-6

 

 

     “Chief Executive Officer” means the chief executive officer of Guarantor or any other
person with responsibility for any of the functions typically performed in a corporation by the
chief executive officer.

     “Chief Financial Officer” means the chief financial officer of Guarantor or any other
person with responsibility for any of the functions typically performed in a corporation by the
chief financial officer.

     “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 Borrower’s obligations
under the Loan Documents.

     “Collateral Pool” means all of the Collateral.

     “Commitment” shall mean the Commitment, as defined in Part I of the DUS Guide, from Fannie
Mae to Lender.

     “Compliance Certificate” means a certificate of Borrower substantially in the form of
Exhibit F to the Agreement.

     “Confirmation of Guaranty” means a confirmation of any Guaranty executed by Guarantor
in connection with any Request after the Initial Closing, substantially in the form of Exhibit
E-2 to the Agreement.

     “Confirmation of Obligations” means a document substantially in the form of
Exhibit M to the Agreement.

     “Conversion Amendment” means an amendment to the Master Credit Facility Agreement
reflecting the conversion of all or any portion of any Variable Advance to a Fixed Advance as set
forth in Section 1.06.

     “Conversion Availability Period” means with respect to a conversion, the date
beginning on the Initial Closing Date and ending on the Fifth Anniversary.

     “Conversion Documents” means the Conversion Amendment, together with an amendment to
each Security Document if required by Lender and other applicable Loan Documents, in form and
substance satisfactory to Lender, reflecting the conversion of all or a portion of a Variable
Advance to a Fixed Advance pursuant to Section 1.06.

     “Conversion Request” means a written request, substantially in the form of
Exhibit H to the Agreement, to convert all or a portion of a Variable Advance to a Fixed
Advance pursuant to Section 1.06.

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

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-7

 

 

	 	(a)	 	The Aggregate Debt Service Coverage Ratio is not less than 1.35:1.0, with
respect
to the portion of the Advances drawn from the Fixed Facility Commitment, and
1.10:1.0, with respect to the portion of the Advances drawn from the Variable
Facility Commitment.
	 
	 	(b)	 	The Aggregate Loan to Value Ratio does not exceed sixty-five percent (65%).

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

     “Credit Facility Termination Documents” means the instruments releasing the Security
Instruments as liens on the Mortgaged Properties, UCC-3 Termination Statements terminating the
UCC-1 Financing Statements in favor of Lender, and such other documents and instruments necessary
to evidence the release of the Collateral from any lien securing the Obligations, and the Notes,
all in connection with the termination of the Agreement and the Credit Facility pursuant to
Article 4.

     “Credit Facility Termination Request” means a written request, substantially in the
form of Exhibit N to the Agreement, to terminate the Agreement and the Credit Facility
pursuant to Section 4.02(a).

     “Debt Service Amounts” shall have the meaning set forth in Section 14.01(b).

     “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 twelve (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.

     “DUS Guide” means the Fannie Mae Delegated Underwriting and Servicing Guide, as it is
amended, modified, supplemented or reissued from time to time.

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

     “ERL Certification” shall have the meaning set forth in Section 1.03(d).

     “Event of Default” means any event defined to be an “Event of Default” under
Article 11.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-8

 

 

     “Facility Debt Service” means–

	 	(a)	 	For use in determining the Advance Amount for the Initial Advance, the sum of
the amount of interest and principal amortization that would be payable during the
twelve (12) month period immediately succeeding the Initial Closing Date, with
respect to the full amount of the Initial Advance, except that, for these purposes:

	 	(i)	 	each SARM Variable Advance to be obtained shall be deemed to
require level monthly payments of principal and interest (at an interest rate
equal to (A) the One-Month LIBOR rate or the Three-Month LIBOR rate, as
applicable, plus (B) the anticipated Fannie Mae spread (as determined by
Lender), plus (C) the Variable Facility Fee, plus (D) up to 300 basis points,
as determined by Lender, plus (E) any monthly Cap Escrow Payment required
pursuant to the Cap Security Agreement) in an amount necessary to fully
amortize the original principal amount of the SARM Variable Advance over the
Amortization Period, with such amortization to commence on the first day of
the twelve (12) month period; and
	 
	 	(ii)	 	each Fixed Advance to be obtained shall be deemed to require
level monthly payments of principal and interest (at an interest rate equal to
(A) the base United States Treasury Index Rate for securities having a
maturity substantially similar to the maturity of the Fixed Advance, plus
(B) the anticipated Fannie Mae spread (as determined by Lender) for an
actual/360 execution for loans having similar characteristics as the Fixed
Advances to be made in connection with the Fixed Facility Commitment,
plus (C) the Fixed Facility Fee) in an amount necessary to fully amortize
the original principal amount of the Fixed Facility Commitment over the
Amortization Period, with such amortization to commence on the first day
of the twelve (12) month period.

	 	(b)	 	For use in determining the additional borrowing capacity created by the
Addition
of Additional Mortgaged Properties to the Collateral Pool, the Release Price
pursuant to Section 3.04(c) and Substitution requirements pursuant to
Section 3.05, the sum of the amount of interest and principal amortization, during
the
twelve (12) month period immediately succeeding the specified date, with respect
to the Advances Outstanding on the specified date, except that, for these purposes:

	 	(i)	 	each SARM Variable Advance to be obtained shall be deemed to
require level monthly payments of principal and interest (at an interest rate
equal to (A) the One-Month LIBOR rate or the Three-Month LIBOR rate, as
applicable, plus (B) the anticipated Fannie Mae spread (as determined by
Lender), plus (C) the Variable Facility Fee, plus (D) up to 300 basis points,
as determined by Lender, plus (E) any monthly Cap Escrow Payment required
pursuant to the Cap Security Agreement) in an amount necessary to fully
amortize the original principal amount of the SARM Variable Advance over the
Amortization Period, with such amortization to commence on the first day of the
twelve (12) month period;

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-9

 

 

	 	(ii)	 	each Fixed Advance Outstanding shall require level monthly payments of
principal and interest (at the rate set forth in the Note for the Fixed
Advance) in an amount necessary to fully amortize the original principal
amount of the Fixed Advance over the Amortization Period, with such
amortization to commence on the first day of the twelve (12) month period;
and
	 
	 	(iii)	 	each Fixed Advance to be obtained shall be deemed to require
level monthly payments of principal and interest (at an interest rate equal to
(A) the base United States Treasury Index Rate for securities having a
maturity substantially similar to the maturity of the Fixed Advance, plus
(B) the anticipated Fannie Mae spread (as determined by Lender) for an
actual/360 execution for loans having similar characteristics as the Fixed
Advances to be made in connection with the Fixed Facility Commitment,
plus (C) the Fixed Facility Fee) in an amount necessary to fully amortize
the original principal amount of the Fixed Facility Commitment over the
Amortization Period, with such amortization to commence on the first day
of the twelve (12) month period.

	 	(c)	 	For use in determining the Aggregate Debt Service Coverage Ratio for purposes
of Section 2.04(b) of the Agreement, for purposes of determining compliance
with the Coverage and LTV Tests (other than with respect to Advances), and for
other ongoing monitoring purposes, as of any specified date, the sum of the
amount of interest and principal amortization, during the twelve (12) month
period immediately succeeding the specified date, with respect to the Advances
Outstanding on the specified date, except that, for these purposes:

	 	(i)	 	each SARM Variable Advance Outstanding shall be deemed to
require level monthly payments of principal and interest (at an interest rate
equal to (A) the current rate of interest paid on such Variable Facility Note,
including any Variable Facility Fee, plus (B) any monthly Cap Escrow Payment
required pursuant to the Cap Security Agreement) in an amount necessary to
fully amortize the original principal amount of the SARM Variable Advance over
the Amortization Period, with such amortization to commence on the first day
of the twelve (12) month period; and
	 
	 	(ii)	 	each Fixed Advance Outstanding shall require level monthly
payments of principal and interest (at the interest rate set forth in the
applicable Fixed Facility Note for such Fixed Advance) in an amount necessary
to fully amortize the original principal amount of the Fixed Advance over the
Amortization Period, with such amortization to commence on the first day of the
twelve (12) month period.

	 	(d)	 	For use in determining the Aggregate Debt Service Coverage Ratio for purposes
of determining the Strike Rate in Section 2.1(c) of the Cap Reserve, and Security
Agreement, as of any specified date, the sum of the amount of interest, during the
twelve (12) month period immediately succeeding the specified date, with respect

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-10

 

 

to the Advances Outstanding on the specified date, except that, for the purposes of
determining the Strike Rate, SARM Variable Advances shall be deemed to require level
monthly payments of interest only (at an interest rate equal to (i) the One-Month
LIBOR rate or Three-Month LIBOR rate, as applicable, plus (ii) the Variable Facility
Fee, plus (iii) up to 300 basis points, assuming no amortization).

     “Fannie Mae” means the body corporate duly organized under the Federal National Mortgage
Association Charter Act, as amended, 12 U.S.C. §1716 et seq. and duly organized and
existing under the laws of the United States.

     “Fees” means Addition Fee, Additional Collateral Due Diligence Fee, Additional Origination
Fee, Fixed Facility Fee, Initial Due Diligence Fee, Initial Origination Fee, Unused Capacity Fee,
Release Fee, Re-Underwriting Fee, Substitution Fee, Variable Facility Fee and any and all other
fees specified in the Agreement.

     “Fifth Anniversary” means the date that is the first day of the month following the
date five (5) years after the Initial Closing Date.

     “First Anniversary” means the date that is the first day of the month following the
date one (1) year after the Initial Closing Date.

     “Fixed+1 Maturity Option” shall have the meaning set forth in Section
1.03(c)(ii).

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

     “Fixed Facility” means the agreement of Lender to make Fixed Advances to Borrower pursuant to
Section 1.01.

     “Fixed Facility Availability Period” means the period beginning on the Initial
Closing Date and ending on the First Anniversary.

     “Fixed Facility Commitment” means $350,000,000, plus such amount as Borrower may
elect to add to or convert to the Fixed Facility Commitment in accordance with Section
1.06.

     “Fixed Facility Fee” means for any Fixed Advance drawn or converted from a Variable
Advance, the number of basis points determined by Lender as the Fixed Facility Fee at the time of
draw or conversion of such Fixed Advance.

     “Fixed Facility Note” means a promissory note, in the form attached as Exhibit
B-1 or Exhibit B-2 to the Agreement, which will be issued by Borrower to Lender,
concurrently with the funding of each Fixed Advance.

     “Fixed Standard Yield Maintenance Maturity Option” shall have the meaning set forth
in Section 1.03(c)(i).

     “Fraudulent Transfer Laws” shall have the meaning set forth in Section 14.11
of the Agreement.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-11

 

 

     “Future Advance” means an Advance made after the Initial Closing Date.

     “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 5.

     “General Partner” shall mean Colonial Properties Trust, an Alabama real estate investment
trust, that is the general partner of Guarantor.

     “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 having jurisdiction over
Borrower and/or Mortgaged Properties.

     “Gross Revenues” means, for any specified period and for any specified purpose, with respect
to any Multifamily Residential Property, all income in respect of such Multifamily Residential
Property determined in accordance with the Underwriting Requirements based on the certified
operating statement for such specified period.

     “Guarantor” means Colonial Properties Trust, an Alabama real estate investment trust.

     “Guaranty” means that certain Guaranty to be executed by Guarantor in the form of Exhibit
E-l to this Agreement.

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

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

     “Hazardous Substance Activity” shall have the meaning given to the term “Prohibited
Activities or Conditions” in the Security Instrument encumbering the Mortgaged Property.

     “Impositions” means, with respect to any Mortgaged Property, all (a) water and sewer charges
which, if not paid, may result in a lien on all or any part of the Mortgaged Property, (b)
premiums for fire and other hazard insurance, rent loss insurance and such other insurance as
Lender may require under any Security Instrument, (c) Taxes, and (d) 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:

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-12

 

 

	 	(a)	 	indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than (i) current trade liabilities (including,
but
not limited to, service contracts, property management agreements,
and
employment contracts) incurred in the ordinary course of business and payable in
accordance with customary practices, (ii) for construction of improvements to
property, if such person has a non-contingent contract to purchase such property,
or (iii) amounts to be paid by such Person, in performance stages or upon
completion, pursuant to a written contract for the making of capital improvements
to a Mortgaged Property permitted by this Agreement or the other Loan
Documents);
	 
	 	(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 (i) the
guaranteeing
person or (ii) 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
(A) purchase any such primary obligation or any property constituting direct or
indirect security therefor, (B) 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, (C) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (D) otherwise
assure or hold harmless the owner of any such primary obligation against loss in
respect of the primary obligation ((“Contingent 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

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-13

 

 

to be the lesser of (1) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made and (2)
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 Lender in good faith.

     “Individual Property Coverage and LTV Tests” means, in connection with the
Substitution or Addition of one or more proposed Mortgaged Properties, each of the following
tests: (a) the Debt Service Coverage Ratio is not less than (i) 1.35:1.0 with respect to the
portion of the Advances to be drawn from the Fixed Facility Commitment in connection with such
Addition, and (ii) 1.10:1.0, with respect to the portion of the Advances drawn from the Variable
Facility Commitment in connection with such Addition; and (b) the Loan to Value Ratio does not
exceed sixty-five percent (65%).

     “Initial Advance” means the Variable Advance and Fixed Advance made on the Initial Closing
Date in the aggregate amount of $350,000,000.

     “Initial Closing Date” means the date of the Agreement.

     “Initial Commitment Amount” means $350,000,000.

     “Initial Due Diligence Fees” shall have the meaning set forth in Section 10.03(a).

     “Initial Mortgaged Properties” means the Multifamily Residential Properties described
on Exhibit A to the Agreement and which represent the Multifamily Residential Properties
which are made part of the Collateral Pool on the Initial Closing Date.

     “Initial Origination Fee” shall have the meaning set forth in Section
10.02(a) of the Agreement.

     “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. The Initial Valuation for each of the Initial Mortgaged Properties is as
set forth in Exhibit A to the 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.

     “Interest Rate Cap” shall have the meaning set forth in Section 1.09.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-14

 

 

     “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.

     “Issuer” shall have the meaning set forth in Section 5.11(a).

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

     “Lender” shall have the meaning set forth in the first paragraph of the Agreement, but shall
refer to any replacement Lender.

     “Letter of Credit” means a letter of credit issued by a financial institution satisfactory to
Fannie Mae, naming Fannie Mae as beneficiary in form and substance as attached hereto as
Exhibit O, or as otherwise reasonably and customarily acceptable to Fannie Mae.

     “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 Document Taxes” shall have the meaning set forth in Section 7.12.

     “Loan Documents” means the Agreement, the Notes, the Guaranty, the Security
Documents, all documents executed by Borrower or Guarantor pursuant to the General Conditions set
forth in Article 5 of the Agreement and any other documents executed by Borrower or
Guarantor from time to time in connection with the Agreement or the transactions contemplated by
the 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.

     “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

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-15

 

 

related, a change or effect which does or would materially impair (a) the business, operations,
property or condition (financial or otherwise) of Borrower or Guarantor, (b) the present or future
ability of Borrower or Guarantor to perform the Obligations for which it is liable, (c) the
validity, priority, perfection or enforceability of the Agreement or any other Loan Document or
the rights or remedies of Lender under any Loan Document, or (d) Lender’s ability to have recourse
against any Mortgaged Property subject to Section 14.01.

     “Maximum Annual Coupon Rate” shall have the meaning set forth in Section
2.01(b).

     “Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under
the laws of the State of Delaware, and its successors and assigns, if such successors and assigns
shall continue to perform the functions of a securities rating agency.

     “Mortgaged Properties” means, collectively, the Additional Mortgaged Properties, the
Substitute Mortgaged Properties and the Initial Mortgaged Properties, but excluding each Release
Mortgaged Property from and after the date of its release 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 Lender for similar loans anticipated to be sold to Fannie Mae.

     “Net Operating Income” means, for any specified period, with respect to any
Multifamily Residential Property, the aggregate net income during such period equal to Gross
Revenues during such period less the aggregate Operating Expenses during such period. If a
Mortgaged Property is not owned by a Borrower or an Affiliate of a 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 a Borrower or an Affiliate of a
Borrower shall be the Mortgaged Property’s pro forma net operating income determined by Lender in
accordance with the underwriting procedures set forth by Lender for similar loans anticipated to
be sold to Fannie Mae.

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

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

     “One-Month LIBOR” means the British Bankers Association fixing of the London
Inter-Bank Offered Rate for 1-month U.S. Dollar-denominated deposits as reported by Telerate
through electronic transmission. If the Index is no longer available, or is no longer posted
through electronic transmission, Lender will choose a new index that is based upon comparable
information and provide notice thereof to Borrower.

     “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 Lender based on the certified operating statement for such specified period as
adjusted to provide for the following: (a) all appropriate types of expenses, including a
management fee and deposits required pursuant to the Replacement Reserve Agreement

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-16

 

 

(whether funded or not), are included in the total operating expense figure; (b) 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 (c) 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, collectively, certificates from Borrower and
Guarantor to Lender, in the form of Exhibit G-l and Exhibit G-2 to the Agreement,
certifying as to certain organizational matters with respect to Borrower and Guarantor.

     “Organizational Documents” means all certificates, instruments and other documents in
effect on the date of the Agreement, pursuant to which an entity is organized or operates,
including but not limited to, (a) with respect to a corporation, its articles of incorporation and
bylaws, (b) with respect to a limited partnership, its limited partnership certificate and
partnership agreement, (c) with respect to a general partnership or joint venture, its partnership
or joint venture agreement and (d) with respect to a limited liability company, its articles of
organization and operating agreement.

     “Other Borrower” shall have the meaning set forth in Section 14.09 of the
Agreement.

     “Other Borrower Documents” shall have the meaning set forth in Section 14.05
of the Agreement.

     “Other Borrower Secured Obligation” shall have the meaning set forth in Section
14.04 of the Agreement.

     “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 direct or indirect
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 any Borrower’s business.

     “Permitted Liens” means, with respect to a Mortgaged Property, (a) the exceptions to title to
the Mortgaged Property set forth in the Title Insurance Policy for the Mortgaged Property

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-17

 

 

which are approved by Lender, (b) the Security Instrument encumbering the Mortgaged Property, (c)
mechanic’s or materialmen’s liens or judgment liens against a Mortgaged Property which are
released of record or otherwise remedied to Lender’s satisfaction within forty-five (45) days of
the date of creation, and (d) real estate taxes and water and sewer and other utility charges that
are lien but not yet due and payable.

     “Permitted Transfers” shall have the meaning set forth in Section 7.14 of
the Agreement.

     “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).

     “Plan” means a “multiemployer plan” as defined in Section 4001(3) of ERISA and a “single
employee plan” as defined in Section 4001(5) of ERISA.

     “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.

     “Proper Officer” means of any of the Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, Senior Executive Vice President or Treasurer.

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

     “Property Delivery Deadline” shall have the meaning set forth in Section
3.05(d)(ii) of the Agreement.

     “Property Manager” means, if any, the entity hired to operate and manage the
Mortgaged Property, whose hiring is subject to the written approval and consent of Lender.

     “Publicly-Held Corporation” shall have the meaning set forth in the definition of
Change of Control.

     “Rate Change Date” shall have the meaning set forth in each Variable Facility Note
evidencing a SARM Variable Advance.

     “Rate Form” means the completed and executed document from Borrower to Lender pursuant to
Section 2.01(b), substantially in the form of Exhibit I to the Agreement.

     “Rate Setting Date” shall have the meaning set forth in Section 2.01 (b).

     “Release Documents” mean instruments releasing the applicable Security Instrument as
a Lien on the Release Mortgaged Property, and UCC-3 Termination Statements terminating the UCC-1
Financing Statements, and such other documents and instruments to evidence the release of the
Release Mortgaged Property from the Collateral Pool.

     “Release Fee” means $4,500 for each Release Mortgaged Property.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-18

 

 

     “Release Mortgaged Property” means the Mortgaged Property to be released pursuant to
Section 3.04.

     “Release Price” shall have the meaning set forth in Section 3.04(c).

     “Release Request” means a written request, substantially in the form of Exhibit
L to the Agreement, to obtain a release of Collateral from the Collateral Pool pursuant to
Section 3.04(a).

     “Remaining Mortgaged Properties” shall have the meaning set forth in Section
5.05(g).

     “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 a form approved by Lender.

     “Replacement Reserve Agreement” means a Replacement Reserve and Security Agreement,
reasonably required by Lender, and completed in accordance with the requirements of Lender for
similar loans anticipated to be sold to Fannie Mae.

     “Request” means an Advance Request, an Addition Request, a Substitution Request, a Release
Request, a Conversion Request, or a Credit Facility Termination Request.

     “Rescinded Payment” has the meaning given that term in Section 14.10 of this
Agreement.

     “Re-Underwriting Fee” means $4,500 for each Mortgaged Property in the Collateral Pool
at the time of any Request for an Additional Loan made pursuant to Section 2.05.

     “S&P” shall mean Standard & Poor’s Credit Markets Services, a division of The McGraw-Hill
Companies, Inc., a New York corporation, and its successors and assigns, if such successors and
assigns shall continue to perform the functions of a securities rating agency.

     “SARM Variable Advance” a loan made by Lender to Borrower under the Variable Facility
Commitment that is anticipated to be sold to Fannie Mae under the Fannie Mae Structured Adjustable
Rate Mortgage program.

     “Securities Act” means the Securities Act of 1933, as amended from time to time, together
with all rules and regulations issued thereunder.

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

     “Security Documents” means the Security Instruments, the Completion Reserve
Agreements, the Replacement Reserve Agreements and any other documents executed by Borrower and
Guarantor from time to time to secure any of Borrower’s and Guarantor’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 a Borrower to or for the benefit of Lender to secure the obligations of

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-19

 

 

Borrower under the Loan Documents. With respect to each Mortgaged Property owned by a 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.

     “Senior Executive Vice President” means any senior executive vice president of
Guarantor or any other person with responsibility for any of the functions typically performed in
a corporation by a senior executive vice president.

     “Senior Management” means (a) the Chief Executive Officer/Chairman of the Board,
President/Chief Financial Officer and Chief Operating Officer of Guarantor or General Partner, and
(b) any other individuals with responsibility for any of the functions typically performed by the
officers described in clause (a).

     “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:

	 	(a)	 	has been a duly formed and existing partnership, corporation or limited
liability
company, as the case may be;
	 
	 	(b)	 	has been duly qualified in each jurisdiction in which such qualification was at
such time necessary for the conduct of its business;
	 
	 	(c)	 	has complied with the provisions of its organizational documents and the laws
of
its jurisdiction of formation in all respects;
	 
	 	(d)	 	has observed all customary formalities regarding its partnership or corporate
existence, as the case may be;
	 
	 	(e)	 	has accurately maintained its financial statements, accounting records and
other
partnership or corporate documents separate from those of any other Person;
	 
	 	(f)	 	has not commingled its assets or funds with those of any other Person provided
that after any assets or funds are deposited in a separate account of any Person
such assets or funds may be transferred to an account which account may hold the
assets or funds of more than one Person;
	 
	 	(g)	 	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;
	 
	 	(h)	 	has been adequately capitalized in light of its contemplated business operations;
	 
	 	(i)	 	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;

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-20

 

	 	(j)	 	has not acquired obligations or securities of any other Person;
	 
	 	(k)	 	in relation to a Borrower, except for loans made in the ordinary course of
business to Affiliates and deposits and investments in Cash Equivalents made in the
ordinary course of business, has not made loans or advances to any other Person;
	 
	 	(l)	 	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;
	 
	 	(m)	 	has paid the salaries of its own employees, if any, and maintained a
sufficient number of employees or has entered into binding agreements with third
parties to provide all required services that would otherwise be provided by
employees in light of its contemplated business operations;
	 
	 	(n)	 	has allocated fairly and reasonably any overhead for shared office space;
	 
	 	(o)	 	has not engaged in a non-exempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Internal Revenue Code to the extent it is subject
to ERISA;
	 
	 	(p)	 	has conducted its own business in its own name;
	 
	 	(q)	 	except as permitted under this Agreement, has not pledged its assets for the
benefit of any other entity or made any loans or advances to any person or entity
except in connection with the Credit Facility; and
	 
	 	(r)	 	in relation to Borrower shall not (i) acquire any real or personal property
other than the Mortgaged Properties and personal property related to the operation and
maintenance of the Mortgaged Properties, (ii) operate any business other than the
management and operation of the Mortgaged Properties, and (iii) shall not maintain its
assets in a way difficult to segregate and identify.

     “Subject Borrower” shall have the meaning set forth in Section 14.09 of the
Agreement.

     “Subordinated Obligations” shall have the meaning set forth in Section
14.08(a) of the Agreement.

     “Substitute Cash Collateral” shall have the meaning set forth in Section
3.04(d)(ii) of the Agreement.

     “Substitute Mortgaged Property” means each Multifamily Residential Property owned by
Borrower (either in fee simple or as tenant under a ground lease meeting all of the requirements
of Lender for similar loans anticipated to be sold to Fannie Mae) and added to the Collateral Pool
after the Initial Closing Date in connection with a substitution of Collateral as permitted by
Section 3.05.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-21

 

     “Substitution” shall have the meaning set forth in Section 3.05(a).

     “Substitution Deposit” shall have the meaning set forth in
Section 3.05(e).

     “Substitution Fee” means $35,000 with respect to each Additional Mortgaged Property
added as part of a Substitution.

     “Substitution Request” shall have the meaning set forth in Section 3.05 of
the Agreement.

     “Surveys” means the as-built surveys of the Mortgaged Properties prepared in
accordance with Lender’s requirements for similar loans that are anticipated to be sold to Fannie
Mae.

     “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 15.10.

     “Termination Date” means, at any time during which Variable Advances and Fixed
Advances are Outstanding, the latest maturity date for any Advance Outstanding.

     “Three-Month LIBOR” means the British Bankers Association fixing of the London
Inter-Bank Offered Rate for 3-month U.S. Dollar-denominated deposits as reported by Telerate
through electronic transmission. If the Index is no longer available, or is no longer posted
through electronic transmission, Lender will choose a new index that is based upon comparable
information and provide notice thereof to Borrower.

     “Title Company” means Chicago Title Insurance Company.

     “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
Lender’s requirements for similar loans anticipated to be sold to Fannie Mae, together with such
endorsements, coinsurance, reinsurance and direct access agreements with respect to such policies
as Lender may, from time to time, consider necessary or appropriate, including variable 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 the Conditions of the policy relating to
a Determination and Extent of Liability) equal to the Commitment.

     “Transfer” means —

	 	(a)	 	as used with respect to Ownership Interests in Borrower, Guarantor or General
Partner means (i) a sale, assignment, pledge, transfer or other disposition of any
Ownership Interest in Borrower, Guarantor or General Partner or in any entity
(including without limitation the General Partner) that has a direct or indirect
Ownership Interest in Borrower, or (ii) the issuance or other creation of new
Ownership Interests in Borrower or Guarantor or in any entity that has a direct or
indirect Ownership Interest in Borrower or Guarantor that is not in compliance

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-22

 

with the laws of the United States, or (iii) a merger or consolidation of Borrower,
Guarantor or General Partner or of any entity that has a direct or indirect
Ownership Interest in Borrower, as the case may be, into another entity or of
another entity into Borrower, Guarantor or General Partner or into any entity that
has a direct or indirect Ownership Interest in Borrower, as the case may be, or (iv)
the reconstitution of Borrower, Guarantor or General Partner or of any entity that
has a direct or indirect Ownership Interest in Borrower, Guarantor or General
Partner from one type of entity to another type of entity, or (v) the amendment,
modification or any other change in the governing instrument or instruments of a
Person which has the effect of changing the relative powers, rights, privileges,
voting rights or economic interests of the Ownership Interests in such Person.

	 	(b)	 	as used with respect to a Mortgaged Property means a sale (except with respect
to a Mortgaged Property for which a Release has been requested), 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.
Transfer does not include a conveyance of a Mortgaged Property at a judicial or
non-judicial foreclosure sale under any security instrument or the Mortgaged Property
becoming part of a bankruptcy estate by operation of law under the United States
Bankruptcy Code.

     “Treasurer” means the treasurer of Guarantor or any other person with responsibility
for any of the functions typically performed in a corporation by the treasurer.

     “Underwriting Requirements” means Lender’s overall underwriting requirements for
Multifamily Residential Properties in connection with loans anticipated to be sold to Fannie Mae
as such requirements may be amended, modified, updated, superseded, supplemented or replaced from
time to time.

     “Unused Capacity” shall mean, for any month up until the First Anniversary, the
difference between the Commitment less the aggregate amount of Advances borrowed. There shall be
no Unused Capacity and no Unused Capacity Fee on and after the First Anniversary.

     “Unused Capacity Fee” means for any month in which Unused Capacity is permitted, an
amount equal to the product obtained by multiplying: (i) 1/12, by (ii) 20 basis points (0.20%), by
(iii) the Unused Capacity. The Unused Capacity Fee shall be paid monthly in arrears pursuant to
the terms of Section 10.01.

     “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, by

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-23

 

	 	(ii)	 	the most recent Cap Rate determined by 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 Lender determines that changed market or property conditions warrant
that the value be determined as set forth in the preceding sentence.

     “Variable Advance” means a SARM Variable Advance.

     “Variable Facility” means the agreement of Lender to make Variable Advances to
Borrower pursuant to Section 1.01.

     “Variable Facility Availability Period” means the period beginning on the Initial
Closing Date and ending on the First Anniversary.

     “Variable Facility Commitment” means an aggregate amount of $0, which, when advanced,
shall be evidenced by one (1) or more Variable Facility Notes in the form attached hereto as
Exhibit C-l or Exhibit C-2, less such amount as Borrower may elect to convert from
the Variable Facility Commitment to the Fixed Facility Commitment in accordance with Section
1.06 less such amount upon which Borrower may elect to stop paying the Unused Capacity Fee in
accordance with Section 10.01.

     “Variable Facility Fee” means for any Variable Advance drawn, the number of basis
points determined at the time of such Variable Advance by Lender as the Variable Facility Fee for
such Variable Advance.

     “Variable Facility Note” means the promissory note, in the form attached as
Exhibit C-l or Exhibit C-2 to the Agreement, which has been issued by Borrower to
Lender to evidence Borrower’s obligation to repay SARM Variable Advances.

     “Voting Equity Capital” means Securities, membership interests 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).

     “Waiving Borrower” shall have the meaning set forth in Section 14.04.

Colonial/PNC ARCS — Master Credit Facility Agreement

Appendix-24

 

			
	 
	 	EXECUTION VERSION

COLONIAL/PNC ARCS

EXHIBIT A TO MASTER CREDIT FACILITY AGREEMENT

SCHEDULE OF INITIAL MORTGAGED PROPERTIES

AND INITIAL VALUATIONS

	 	 	 	 	 	 	 	 	 
	Property Name	 	Borrower	 	Address	 	Initial Valuation
	Colonial Grand at 

Liberty Park

	 	CMF 15 PORTFOLIO LLC,

a Delaware limited

liability company
	 	1750 Bartholdi
Parkway,
 Vestavia
Hills, Jefferson

County, Alabama
35242
	 	$	26,570,000	 
	Colonial Grand at 

Heathrow

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	1122 Greenstone
Blvd,
 Heathrow,
Seminole 
County,
Florida 32746
	 	$	30,700,000	 
	Colonial Grand at 

McGinnis Ferry

	 	CMF 15 PORTFOLIO LLC,

a Delaware limited

liability company
	 	4000 McGinnis Ferry

Road, Suwanee,
Gwinnett
 County,
Georgia
	 	$	38,000,000	 
	Colonial Grand at 

Mount Vernon

	 	CMF 15 PORTFOLIO LLC,

a Delaware limited

liability company
	 	100 Preston Woods
Trail,
 Dunwoody,
Fulton
 County,
Georgia 30338
	 	$	22,850,000	 
	Colonial Grand at 

Shiloh

	 	CMF 15 PORTFOLIO LLC,

a Delaware limited

liability company
	 	1750 Shiloh Road,
NW,
 Kennesaw, Cobb
County,
 Georgia
	 	$	45,400,000	 
	Colonial Grand at 

Arringdon

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	5710 Arringdon Park

Drive, Morrisville,

Durham County,
North
 Carolina
27560
	 	$	28,800,000	 
	Colonial Grand at 

Beverly Crest

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	7201 Shannopin
Drive,
 Charlotte,
Mecklenburg
 County,
North Carolina

28270
	 	$	23,100,000	 
	Colonial Grand at 

Crabtree Valley

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	3300 Grove at
Crabtree
 Crescent,
Raleigh, Wake

County, North
Carolina
 27613
	 	$	15,700,000	 
	Colonial Grand at 

Mallard Creek

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	3025 Mallard Hill
Drive,
 Charlotte,
Mecklenburg
 County,
North Carolina

28269
	 	$	23,300,000	 
	Colonial Grand at 

Mallard Lake

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	9401 Grove Hill
Drive,
 Charlotte,
Mecklenburg
 County,
North Carolina

28262
	 	$	26,300,000	 
	Colonial Grand at 

Patterson Place

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	100 Northcreek
Drive,
 Durham,
Durham County,

North Carolina
27707
	 	$	22,900,000	 
	Colonial Grand at 

Bear Creek

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	1200 Fuller Wiser
Road,
 Euless,
Tarrant County,

Texas 76039
	 	$	35,900,000	 
	Colonial Village at 

Oak Bend

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	195 E Round Grove
Road,
 Lewisville,
Denton
 County,
Texas 75067
	 	$	32,300,000	 

A-1

 

	 	 	 	 	 	 	 	 	 
	Property Name	 	Borrower	 	Address	 	Initial Valuation
	Colonial Village at 

Quarry Oaks

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	6263 McNeil Drive,

Austin, Travis
County,
 Texas 78729
	 	$	40,000,000	 
	Colonial Grand at 
Round Rock

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	1800 Plateau Vista

Boulevard, Round
Rock,
 Williamson
County, Texas
 78664
	 	$	36,500,000	 
	Colonial Village at 

Shoal Creek

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	2500 Central Park

Boulevard, Bedford,

Tarrant County,
Texas

76022
	 	$	34,000,000	 
	Colonial Village at 

Sierra Vista

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	1111 Southcreek
Drive,
 Round Rock,
Williamson
 County,
Texas 78664
	 	$	16,250,000	 
	Colonial Village at 

Willow Creek

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	2801 Airport
Freeway,
 Bedford,
Tarrant County,

Texas 76021
	 	$	39,400,000	 
	Colonial Village at 
West
End

	 	CMF 15 Portfolio LLC,

a Delaware limited

liability company
	 	4008 Gaelic Lane,
Glen
 Allen, Henrico
County,
 Virginia
23060
	 	$	18,800,000	 

A-2

 

EXHIBIT B -1 TO MASTER CREDIT FACILITY AGREEMENT

FIXED FACILITY NOTE

(Standard Maturity)

[Need to modify if partially IO.]

			
	US $                    
	 	                    , 20___

     FOR VALUE RECEIVED, the undersigned (individually and collectively, “Borrower”) jointly
and severally (if more than one) promises to pay to the order of PNC ARCS LLC, a Delaware
limited liability company (“Lender”) the principal sum of
                                                 AND NO/100 DOLLARS
(US $           ), with
interest accruing on the unpaid principal balance from the Disbursement Date until fully paid
at the Interest Rate.

     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as
amended, restated or otherwise modified from time to time, the “Master Agreement”), to
evidence the obligation of Borrower to repay a Fixed 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 Advance
evidenced hereby is made.

     1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used
in this Note, the following definitions shall apply:

Advance: The advance evidenced by this Note.

Advance Term:                                        months.

Amortization Period:                    . [Three hundred sixty (360) months or N/A depending on term.]

Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.

Debt Service Amounts: Amounts payable under this Note, the Security
Instrument or any other Loan Document.

Default Rate: A rate equal to the lesser of 4 percentage points above the
Interest Rate or the maximum interest rate which may be collected from
Borrower under applicable law.

Disbursement Date: The date of disbursement of Advance proceeds hereunder.

B-1-1

 

First Payment Date: The first day of                     , 20___. [For example: If the
Note date is January 1, then the First Payment Date will be February 1. If the Note
date is any day other than January 1, then the First Payment Date will be March 1.]

Indebtedness: The principal of, interest on, or any other amounts due at any time
under, this Note, the Security Instrument or any other Loan Document, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security Instrument.

Interest Rate: The annual rate of                                         percent (___%).

Lender: The holder of this Note.

Maturity Date: The first day of                     , ___, or any earlier date on
which the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise.

Security Instrument: Individually and collectively, various multifamily mortgages,
deeds to secure debt or deeds of trust described in the Master Agreement.

Yield Maintenance Period Term or Prepayment Premium Period Term:
                    months. [Typically 54, 90, or 114 months]

Yield Maintenance Period End Date or Prepayment Premium Period End

Date: The last day of                     , ___. [Insert the appropriate month and year,
calculating from the Maturity Date, e.g., if the advance is a 10-year advance with
a Maturity Date of July 1, 2015, and the yield maintenance period is 9.5 years,
then the month and year to insert is December, 2014]

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 Instrument.

     2. Address for Payment. All payments due under this Note shall be payable at
PNC ARCS LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, 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) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

B-1-2

 

     (b) Interest Computation. Interest under this Note shall be computed on the basis of
(check one only):

	 	o	 	30/360. A 360-day year consisting of twelve 30-day months.
	 
	 	o	 	Actual/360. A 360-day year. The amount of each monthly payment
made by Borrower pursuant to Paragraph 3(c) below will be based on the actual
number of calendar days during such month and shall be calculated by
multiplying the unpaid principal balance of this Note by the per annum
Interest Rate, dividing the product by three hundred sixty (360) and
multiplying the quotient by the actual number of days elapsed during the
month. Borrower understands that the amount of interest for each month will
vary depending on the actual number of calendar days during such month.

     (c) Monthly Installments (check one only):

	 	o	 	30/360. [Select only if 30/360 is selected in Paragraph 3(b)
above.] If interest accrues based on a 30/360 interest computation, then
consecutive monthly installments of interest only, each in the amount of
             
          
           
       
          
          
            
           
            
           
              
         
           
            
        Dollars (US $ 
             
            
             
            
         ), shall
be payable on the First Payment Date and on the first day of every month
thereafter, until the entire unpaid principal balance evidenced by this Note
is fully paid. The entire principal balance and accrued but unpaid interest
shall be due and payable on 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.

	 	o	 	Actual/360. [Select only if Actual/360 is selected in
Paragraph 3(b) above.] If interest accrues based on an Actual/360 interest
computation, the amount of        
            
           
           
            
          
              
             
           Dollars (US $  
             
            
             )
shall be payable on the First
Payment Date and thereafter consecutive monthly installments of interest
only, shall be payable as follows:

	 	(1)	 	                                                                    
            
                     Dollars (US $                                        ), shall be payable on the first
day of each month during the term hereof which follows a 28-day
month;
	 
	 	(2)	 	                                                                                
                     Dollars (US $                                        ), shall be payable on the first
day of each month during the term hereof which follows a 29-day
month,

B-1-3

 

	 	(3)	 	                                                                                
                     Dollars (US $                                        ), shall be payable on the first
day of each month during the term hereof which follows a 30-day
month, or

	 	(4)	 	                                                                                
                     Dollars (US $                                        ), shall be payable on the
first day of each month during the term hereof which follows a 31-day
month,

until the entire unpaid principal balance evidenced by this Note is fully
paid. The entire principal balance and accrued but unpaid interest shall be
due and payable on 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.

     (d) Payments Before Due Date. 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.

     (e) Accrued Interest. Any accrued interest remaining past due for thirty (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. Any reference herein to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any amount added
to principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates
specified in this Note and shall be payable with such interest upon demand by Lender and absent
such demand, as provided in this Note for the payment of principal and interest.

     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
Instrument, and reference is made to the Security Instrument 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-1-4

 

     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 Instrument 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 Advance 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 thirty (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 the Default Rate. 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 Advance, that, during the time that any
monthly installment or payment under this Note is delinquent for more than thirty (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 thirty (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 advance.

     9. Limits on Personal Liability. The provisions of Article 14 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) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay
all (or a portion) of the unpaid principal balance of this Note only on the last

B-1-5

 

calendar day of a calendar month (the “Last Day of the Month”) and only if Borrower has
complied with all of the following:

	 	(i)	 	Borrower must give Lender at least thirty (30) days (if
given via U.S. Postal Service) or twenty (20) days (if given via facsimile,
email or overnight courier), but not more than sixty (60) days, prior written
notice of Borrower’s intention to make a prepayment (the “Prepayment
Notice”). The Prepayment Notice shall be given in writing (via facsimile,
email, U.S. Postal Service or overnight courier) and addressed to Lender. The
Prepayment Notice shall include, at a minimum, the Business Day upon which
Borrower intends to make the prepayment (the “Intended Prepayment
Date”).
	 
	 	(ii)	 	Borrower acknowledges that the Lender is not required to
accept any voluntary prepayment of this Note on any day other than the Last
Day of the Month even if Borrower has given a Prepayment Notice with an
Intended Prepayment Date other than the Last Day of the Month or if the Last
Day of the Month is not a Business Day. Therefore, even if Lender accepts a
voluntary prepayment on any day other than the Last Day of the 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 Day of the Month shall be deemed to have been received by Lender on
the Last Day of the Month and any prepayment calculation will include
interest to and including the Last Day of the Month in which such prepayment
occurs. If the Last Day of the Month is not a Business Day, then Borrower
must make the payment on the Business Day immediately preceding the Last Day
of the Month.
	 
	 	(iii)	 	Any prepayment shall be made by paying (A) the amount of
principal being prepaid, (B) all accrued interest (calculated to the Last Day
of the Month), (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 (A)
within five (5) Business Days after the Intended Prepayment Date or (B) 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 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.”

B-1-6

 

     (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, (i) all accrued interest and all other sums
due Lender under this Note and the other Loan Documents, and (ii) 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 (1) with respect to any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument, or (2) as provided in
subparagraph (c) of Schedule A.

     (c) Schedule A is hereby incorporated by reference into this Note.

     (d) Any required prepayment of less than the entire unpaid principal balance of this
Note shall not extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments, unless Lender agrees otherwise in writing.

     (e) Borrower recognizes that any prepayment of the unpaid principal balance of this
Note, whether voluntary or involuntary or resulting from a default by Borrower, will result in
Lender’s incurring loss, including reinvestment loss, additional expense and frustration or
impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay
to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it
is extremely difficult and impractical to ascertain the extent of such damages. Borrower
therefore acknowledges and agrees that the formula for calculating prepayment premiums set
forth on Schedule A represents a reasonable estimate of the damages Lender will incur because
of a prepayment.

     (f) Borrower further acknowledges that the prepayment premium provisions of this
Note are a material part of the consideration for the Advance 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.

     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.

B-1-7

 

     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. Advance 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
Advance 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 Advance 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.

     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
15.06 of the Master Agreement (entitled “Choice of Law; Consent to

B-1-8

 

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 15.08 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. No Reborrowing. Advances borrowed under this Note may not be reborrowed.

     22. Fixed Advance. This Note is issued to evidence a Fixed Advance made in accordance with
the terms of the Master Agreement.

     23. 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-1-9

 

     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.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability

company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an

Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

B-1-10

 

     Pay to the order of                                                             , without recourse.

	 	 	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability  
company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

B-1-11

 

     ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	 	 
	 	þ	Schedule A Prepayment Premium (required)

	 	 	 
	 	o	Schedule B Modifications to Multifamily Note

B-1-12

 

SCHEDULE A

PREPAYMENT PREMIUM

[FOR STANDARD YIELD MAINTENANCE –

OTHER PREPAYMENT OPTIONS MAY BE AVAILABLE FOR A FEE]

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 Yield
Maintenance Period End Date, the prepayment premium shall be the greater of:

	 	(i)	 	one percent (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” ), on the
twenty-fifth (25th) Business Day preceding (x) the Intended Prepayment Date, or (y)
the date Lender accelerates the Advance or otherwise accepts a prepayment pursuant to
Paragraph 10(a)(3) of this Note, as the Yield Rate is reported in The Wall Street
Journal,

	 	 	 	by

	 	(C)	 	the present value factor calculated using the following formula:
	 
	 		 	1 - (1 + r)-n/12
r

	 	 	 	 	 
	 

	 	[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 Day of
the 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]

B-1-13

 

	 	 	 	 	 
	 

	 	 	 	In the event that no Yield Rate is published for the Specified U.S. Treasury
Security, then the nearest equivalent non-callable U.S. Treasury Security
having a maturity date closest to the Yield Maintenance Period End Date of this
Note 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 fourth (4th) month prior to the month in which the Maturity Date occurs, the
prepayment premium shall be one percent (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 fourth (4th)
month prior to the month in which the Maturity Date occurs.

[Remainder of page intentionally left blank.]

B-1-14

 

[Initial Page to Schedule A to Fixed Facility Note (Standard Maturity)]

 

INITIALS

B-1-15

 

EXHIBIT B-2 TO MASTER CREDIT FACILITY AGREEMENT

FIXED FACILITY NOTE

(Fixed+1 Maturity)

			
	 	 	 
	US [$         
              
               
             
         ]
	 	[     
             
            
          ,   
             
     ]

     FOR VALUE RECEIVED, the undersigned (individually and collectively, “Borrower”)
jointly and severally (if more than one) promises to pay to the order of PNC ARCS LLC, a Delaware
limited liability company (“Lender”), the principal sum of
           
             
            
            
           
          
        
         
            
             
              
      Dollars (US
$         
         
            
             
            
     ), with interest accruing at the Interest Rate on the unpaid principal balance
from the Disbursement Date until fully paid.

     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”), to evidence the
obligation of Borrower to repay a Fixed 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 Advance evidenced hereby is made.

     1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used in this
Note, the following definitions shall apply:

Adjustable Rate. From and after each Rate Change Date until the next Rate Change Date, the
Adjustable Rate shall be the sum of (i) the Current Index, and (ii) the Margin, which sum is
then rounded to three decimal places, subject to the limitations that the Adjustable Rate
shall not be less than the Margin.

Adjustable Rate Period: The period commencing on the First Rate Change Date and ending on
the Maturity Date.

Advance: The Advance evidenced by this Note.

Advance Term:                                                   
           months. [Note: Include
both Fixed Rate Period and Adjustable
Rate Period.]

Amortization Period:         
             
              
            
            . [Three hundred
sixty (360) months or N/A depending on
term.]

Business Day: Any day other than a Saturday, Sunday or any other day on which Lender is not
open for business.

B-2-1

 

Current Index: The published Index that is effective on the fifteenth (15t)h day before the
applicable Rate Change Date.

Debt Service Amounts: Amounts payable under this Note, the Security Instrument or any other
Loan Document.

Default Rate: A rate equal to the lesser of four (4) percentage points above the Interest
Rate or the maximum interest rate which may be collected from Borrower under applicable law.

Disbursement Date: The date of disbursement of the Advance hereunder.

First Payment Change Date: The first day of                                                     
        , 20
         
            
             
      . [Insert the calendar
month and year immediately following the First Rate Change Date. For example: If the First
Rate Change Date is January 1, 2010, then the First Payment Change Date is February 1,
2010.]

First Payment
Date or First Interest Only Payment Date: The first day of     
             
            
           , 20 
               
    .
[For example: If the Note date is January 1, 2009, then the First Payment Date or First
Interest Only Payment Date will be February 1, 2009. If the Note date is any other day in
the month of January, then the First Payment Date or First Interest Only Payment Date will
be March 1, 2009.]

First Principal and Interest Payment Date: The first day of  
             
           
               , 20                    .
[Applicable only if there is a Partial Interest-Only Period. If a Partial
Interest-Only Period applies, insert the calendar month and year immediately following the
Last Interest-Only Payment Date. For example: If the Last Interest-Only Payment Date is
January 1, 2009, then the First Principal and Interest Payment Date is February 1, 2009.]

First Rate Change Date: The first day of                                         , 20           
         . [Insert the calendar month
that is twelve months prior to the Maturity Date. For example: If the Maturity Date is March
1, 2016, then the First Rate Change Date is March 1, 2015.]

Fixed Rate: The annual rate of                                          percent (                    %).

Indebtedness: The principal of, interest on, or any other amounts due at any time under,
this Note, the Security Instrument or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances to protect the security of the
Security Instrument under Section 12 of the Security Instrument.

Index: The British Bankers Association fixing of the London Inter-Bank Offered Rate for
1-month U.S. Dollar-denominated deposits as reported by Telerate through electronic
transmission. If the Index is no longer available, or is no longer posted through
electronic transmission, Lender will choose a new index

B-2-2

 

that is based upon comparable information and provide notice thereof to Borrower.

Last Interest-Only Payment Date: The first day of                                      
   , 20         
           . [Only applies if there is a Partial Interest-Only Period. Insert the date that the last
interest-only payment is due.]

Lender: The holder of this Note.

Margin: The Adjustable Rate Period margin is [2.40% — confirm].

Maturity Date: The first day of                                         ,                    
 , or any earlier date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or otherwise.
[Insert the final Maturity Date of the Note including the Adjustable Rate Period.]

Payment Change Date: The first day of the month following each Rate Change Date until this
Note is repaid in full.

Remaining Amortization Period: For an amortizing Advance, as of each Payment Change Date,
the Amortization Period minus the number of scheduled monthly principal and interest
payments that have elapsed since the date of this Note.

Rate Change Date: The First Rate Change Date and the first day of each month thereafter
until this Note is repaid in full.

Security Instrument: Individually and collectively, various multifamily mortgage, deeds to
secure debt or deeds of trust described in the Master Agreement.

Yield Maintenance Period Term or Prepayment Premium Period Term:                                          months. [Note: This
must be equal to the Fixed Rate Period.]

Yield Maintenance Period End Date or Prepayment Premium Period End Date: The last day of
                                        ,                     . [Insert the last day of the calendar month immediately preceding the First
Rate Change Date]

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 Instrument.

     2. Address for Payment. All payments due under this Note shall be payable at
PNC ARCS LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, or such other place
as may be designated by written notice to Borrower from or on behalf of Lender.

B-2-3

 

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

     (a) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

     (b) Interest Computation. Interest under this Note shall be computed on the basis of
(check one only):

	 	o	 	30/360. A 360-day year consisting of twelve 30-day months.
	 
	 	o	 	Actual/360. A 360-day year. The amount of each monthly payment made by
Borrower pursuant to Paragraph 3(d) below that is allocated to interest will be
based on the actual number of calendar days during such month and shall be
calculated by multiplying the unpaid principal balance of this Note by the per
annum Interest Rate, dividing the product by three hundred sixty (360) and
multiplying the quotient by the actual number of days elapsed during the month.
Borrower understands that the amount allocated to interest for each month will
vary depending on the actual number of calendar days during such month.

     (c) Interest Accrual. Interest shall accrue on the unpaid principal balance of this Note at
the Fixed Rate or the Adjustable Rate, as applicable. Interest shall accrue at the Fixed Rate until
the First Rate Change Date. Thereafter, interest shall accrue at the Adjustable Rate. During the
Adjustable Rate Period, the Adjustable Rate shall change on each Rate Change Date until the Advance
is repaid in full.

     (d) Monthly Installments.

	 	(1)	 	Fixed Rate Period. (Check one only.)

	 	o	 	Amortizing Advance.
	 
	 	 	 	Consecutive monthly installments of principal and interest, each
in the amount of                                  
        Dollars (US
$                    ), shall be payable on the First
Payment Date and on the first day of every month thereafter, until
and including the First Rate Change Date
	 
	 	o	 	Interest Only Advance. (Check one only)

	 	o	 	30/360. [Select only if 30/360 is selected in Paragraph
3(b) above.] If interest accrues based on a 30/360 interest
computation, then consecutive monthly installments of interest
only, each in the amount of

B-2-4

 

	 	 	 	         
            
             
       Dollars (US $    
             
            
           ),
shall be payable on the First Payment Date and on the first day
of every month thereafter, until and including the First Rate
Change Date.

	 	o	 	Actual/360. [Select only if Actual/360 is selected in
Paragraph 3(b) above.] If interest accrues based on an
Actual/360 interest computation, the amount of
                                         Dollars (US $                           
        
    ) shall be payable on the First Payment Date and thereafter
consecutive monthly installments of interest only, shall be
payable as follows:

	 	(1)	 	                                         Dollars (US
$                                         ), shall be payable on
the first day of each month during the term
hereof which follows a 28-day month;
	 
	 	(2)	 	                                         Dollars (US
$                                         ), shall be payable on
the first day of each month during the term
hereof which follows a 29-day month,
	 
	 	(3)	 	                                         Dollars (US
$                                         ), shall be payable on
the first day of each month during the term
hereof which follows a 30-day month, or
	 
	 	(4)	 	                                         Dollars (US
$                                         ), shall be payable on
the first day of each month during the term
hereof which follows a 31-day month,

	 	 	 	until and including the First Rate Change Date.

	 	o	 	Partial Interest Only Advance.

	 	(1)	 	Interest Only Period. Commencing on the First Interest
Only Payment Date and on the first day of every month until and
including the Last Interest Only Payment Date, consecutive monthly
installments of interest only shall be payable and in an amount
equal to one of the following (check one only):

	 	o	 	30/360. [Select only if 30/360 is selected in Paragraph
3(b) above.] If interest accrues based on a 30/360 interest
computation, then consecutive

B-2-5

 

	 	 	 	monthly installments of interest only, each in the amount of   
             
                          Dollars (US
$                                        ).
	 	o	 	Actual/360. [Select only if Actual/360 is selected in
Paragraph 3(b) above.] If interest accrues based on an
Actual/360 interest computation, the amount of
                                         Dollars (US
$                                        ) shall be payable on the First
Interest Only Payment Date and thereafter consecutive
monthly installments of interest only shall be payable as
follows:

	 	(i)	 	                                        
Dollars (US $          
            
                  ), shall be payable
on the first day of each month during the term hereof
which follows a 28-day month;
	 
	 	(ii)	 	                                        
Dollars (US $                                        ), shall be payable
on the first day of each month during the term hereof
which follows a 29-day month,
	 
	 	(iii)	 	                                        
Dollars (US $                                        ), shall be payable
on the first day of each month during the term hereof
which follows a 30-day month, or
	 
	 	(iv)	 	                                         Dollars (US
$                                        ), shall be payable on the first day
of each month during the term hereof which follows a
31-day month,

	 	(2)	 	Amortizing Period. Commencing on the First Principal and Interest
Payment Date and on the first day of every month thereafter, until and
including the First Rate Change Date, consecutive monthly installments of
principal and interest shall be due and payable, each in the amount of
                                         Dollars (US $                                       
 ).

B-2-6

 

	 	(2)	 	Adjustable Rate Period. (Check one only)

	 	o	 	Amortizing Advance. If the Advance is an amortizing Advance, consecutive
monthly installments of principal and interest, each in the amount of the
Required Monthly Payment (defined below), shall be payable on the first day
of each month beginning on the First Payment Change Date and on each
Payment Change Date thereafter until the entire unpaid principal balance
evidenced by this Note is fully paid. The initial Required Monthly Payment
shall be the amount required to pay the unpaid principal balance of this
Note in equal monthly installments, including accrued interest at the
Adjustable Rate over the Remaining Amortization Period. Thereafter, to the
extent that the Adjustable Rate has changed, the Required Monthly Payment
shall change on each Payment Change Date, and shall be in such amount as
shall cause the unpaid principal balance of the Note to be amortized over
the Remaining Amortization Period. Notwithstanding the interest accrual
method selected in paragraph 3(b) above, the amount of the initial and all
other Required Monthly Payments shall be calculated utilizing a 30/360
interest calculation payment schedule whether the amount allocated to
interest on the loan is based on a 360-day year consisting of twelve 30-day
months or on a 360-day year consisting of the actual number of days in each
month. Any remaining principal and interest, if not sooner paid, shall be
due and payable on the Maturity Date.
	 
	 	o	 	Interest-Only Advance. If the Advance is an interest-only Advance,
consecutive monthly installments of interest only, each in the amount of
the Required Monthly Payment (defined below), shall be payable on the First
Payment Change Date and on each Payment Change Date thereafter until the
entire unpaid principal balance evidenced by this Note is fully paid. The
initial Required Monthly Payment shall be calculated based on the
outstanding principal balance and the then-applicable Adjustable Rate.
Thereafter, to the extent that the Adjustable Rate has changed, the
Required Monthly Payment shall change on each Payment Change Date based on
the then-applicable Adjustable Rate. The amount of the initial and any
changed Required Monthly Payment shall be calculated utilizing the interest
accrual method selected in paragraph 3(b) above. The entire unpaid
principal balance and accrued but unpaid interest, if not sooner paid,
shall be due and payable on the Maturity Date.

          (i) Adjustable Rate. The Adjustable Rate shall be in effect beginning on the
First Rate Change Date. From and after each Rate Change Date until the next Rate
Change Date, the Adjustable Rate shall be

B-2-7

 

the sum of (a) the Current Index, and (b) the Margin, which sum is then
rounded to three decimal places, subject to the limitations that the
Adjustable Rate shall not be less than the Margin. Accrued interest on
this Note shall be paid in arrears.

     (ii) Notice of Interest Rate
Change. Before each Payment Change Date, Lender shall
re-calculate the Adjustable Rate and shall notify Borrower
(in the manner specified in the Security Instrument for
giving notices) of any change in the Adjustable Rate and the
Required Monthly Payment.

     (iii) Correction to Required Monthly Payment. If Lender at any time
determines, in its sole but reasonable discretion, that it has
miscalculated the amount of the Required Monthly Payment (whether because
of a miscalculation of the Adjustable Rate or otherwise), then Lender
shall give notice to Borrower of the corrected amount of the Required
Monthly Payment (and the corrected Adjustable Rate, if applicable) and (a)
if the corrected amount of the Required Monthly Payment represents an
increase, then Borrower shall, within thirty (30) calendar days
thereafter, pay to Lender any sums that Borrower would have otherwise been
obligated under this Note to pay to Lender had the amount of the Required
Monthly Payment not been miscalculated, or (b) if the corrected amount of
the Required Monthly Payment represents a decrease thereof and Borrower is
not otherwise in breach or default under any of the terms and provisions
of the Note, the Security Instrument or any other loan document evidencing
or securing the Note, then Borrower shall thereafter be paid the sums that
Borrower would not have otherwise been obligated to pay to Lender had the
amount of the Required Monthly Payment not been miscalculated.

     (e) Payments Before Due Date. Any regularly scheduled monthly installment of principal and
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.

     (f) Accrued Interest. Any accrued interest remaining past due for thirty (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. Any reference herein to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any amount added to
principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates
specified in this Note and shall be payable with such
interest upon demand by Lender and absent such demand, as provided in this Note for the payment of
principal and interest.

     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

B-2-8

 

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 Instrument, and
reference is made to the Security Instrument 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 Section 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 tenth (10th) day of each month or if any other amount payable under this Note or under
the Security Instrument or any other Loan Document is not received by Lender before or on 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 five percent (5%) 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 Advance 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 thirty (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 the Default Rate. 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 Advance, that, during the time that any monthly
installment or payment under this Note is delinquent for more than thirty (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 thirty (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

B-2-9

 

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 Advance.

     9. Limits on Personal Liability. The provisions of Article 14 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) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay all
or a portion of the unpaid principal balance of this Note only on the last calendar day of
a calendar month (the “Last Day of the Month”) and only if Borrower has complied
with all of the following:

	 	(i)	 	Borrower must give Lender at least thirty (30)
days (if given via U.S. Postal Service) or twenty (20) days (if given
via facsimile, email or overnight courier), but not more than sixty
(60) days, prior written notice of Borrower’s intention to make a
prepayment (the “Prepayment Notice”). The Prepayment Notice shall be
given in writing (via facsimile, email, U.S. Postal Service or
overnight courier) and addressed to Lender. The Prepayment Notice
shall include, at a minimum, the Business Day upon which Borrower
intends to make the prepayment (the “Intended Prepayment
Date”).

	 	(ii)	 	Borrower acknowledges that Lender is not
required to accept any voluntary prepayment of this Note on any day
other than the Last Day of the Month even if (A) Borrower has given a
Prepayment Notice with an Intended Prepayment Date other than the Last
Day of the Month or (B) the Last Day of the Month is not a Business
Day. Therefore, even if Lender accepts a voluntary prepayment on any
day other than the Last Day of the 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 Day of
the Month shall be deemed to have been received by Lender on the Last
Day of the Month and any prepayment calculation will include interest
to and including the Last Day of the Month in which such prepayment
occurs. If the Last Day of the Month is not a Business Day, then
Borrower must make the payment on the Business Day immediately
preceding the Last Day of the Month.

B-2-10

 

	 	(iii)	 	Any prepayment shall be made by paying (A) the amount of
principal being prepaid, (B) all accrued interest (calculated to the
Last Day of the Month), (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 (A) within five (5) Business Days after the Intended
Prepayment Date or (B) 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 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, (i) all accrued interest and all other sums
due Lender under this Note and the other Loan Documents, and (ii) 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
(1) with respect to any prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph
(b) of Schedule A.

     (c) Schedule A is hereby incorporated by reference into this Note.

     (d) Any required prepayment of less than the entire unpaid principal balance of this Note
shall not extend or postpone the due date of any subsequent monthly installments or change the
amount of such installments, unless Lender agrees otherwise in writing.

     (e) Borrower recognizes that any prepayment of the unpaid principal balance of this Note,
whether voluntary or involuntary or resulting from a default by Borrower, will result in Lender’s
incurring loss, including reinvestment loss, additional expense and frustration or impairment of
Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is extremely
difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges
and agrees that the formula for calculating prepayment premiums set

B-2-11

 

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 Advance 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.

     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 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. Advance 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
Advance 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 Advance 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

B-2-12

 

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.

     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. Captions. The captions of the paragraphs of this Note are for convenience only and shall
be disregarded in construing this Note.

     18. 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 accordance with
Section 15.08 of the Master Agreement.

     19. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. The provisions of Section
15.06 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.

     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. No Reborrowing. Advances borrowed under this Note may not be reborrowed.

     22. Fixed Advances. This Note is issued to evidence a Fixed Advance made in accordance with
the terms of the Master Agreement.

     23. 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-2-13

 

ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	 	 	 	 
	þ

	 	Schedule A
	 	Prepayment Premium (required)
	 
	 	 	 	 
	o

	 	Schedule B
	 	Modifications to Multifamily Note

[Remainder of page intentionally left blank.]

B-2-14

 

     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.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 	 	 	 	 
	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company	 	 
	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership	 	 
	 	 	Its:	 	Sole Member	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust	 	 
	 

	 	 	 	Its:
	 	General Partner
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

B-2-15

 

     Pay to the order of ___, without recourse.

	 	 	 	 	 	 	 
	 

	 	LENDER:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

B-2-16

 

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 Yield Maintenance Period End Date, the prepayment premium shall be the greater of:

	 	(i)	 	one percent (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 Fixed Rate on this
Note the yield rate (the “Yield Rate”) on the            % U.S.
Treasury Security due                      (the
“Specified U.S. Treasury Security”), on the twenty-fifth (25th)
Business Day preceding (x) the Intended Prepayment Date, or (y) the
date Lender accelerates the Advance or otherwise accepts a prepayment
pursuant to Paragraph 10(a)(3) of this Note, as the Yield
Rate is reported in The Wall Street Journal,

	 	 	 	by

	 	(C)	 	the present value factor calculated using the following formula:

	 
	 	 	 	1 - (1 + r)-n/12
r

	 	 	 	 	 
	 

	 	[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 Day of the 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 non-callable U.S.
Treasury Security having a maturity date closest to the Yield

B-2-17

 

	 	 	 
	 

	 	Maintenance Period End Date of this Note 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)	 	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 Yield
Maintenance Period End Date.

[Remainder of page intentionally left blank.]

B-2-18

 

[Initial Page to Schedule A to Fixed Facility Note (Fixed+1 Maturity)]

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	INITIALS	 	 

B-2-19

 

EXHIBIT C-1 TO MASTER CREDIT FACILITY AGREEMENT

VARIABLE FACILITY NOTE 

(1-Month LIBOR Index Structured ARM)

[Need to modify if partially IO.]

			
	 	 	 
	US $[                                                            ]
	 	[                                        , ___]

     FOR VALUE RECEIVED, the undersigned (“Borrower”) jointly and severally (if more than
one) promises to pay to the order of PNC ARCS LLC, a Delaware limited liability company
(“Lender”), the principal sum of       
             
              
            
             
   Dollars (US $          
              
                ),
with interest on the unpaid principal balance from the Disbursement Date until fully paid at the
rates applicable from time to time set forth in this Variable Facility Note (“Note”).

     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”), to evidence the
obligation of Borrower to repay a Variable 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 Variable Advance evidenced hereby is made.

     Section 1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used
in this Note, the following definitions shall apply:

Adjustable Rate. The initial Adjustable Rate shall be ___% per annum until the
first Rate Change Date. From and after each Rate Change Date until the next Rate
Change Date, the Adjustable Rate shall be the sum of (i) the Current Index, and
(ii) the Margin, which sum is then rounded to three decimal places, subject to the
limitations that the Adjustable Rate shall not be less than the Margin.

Advance: The advance evidenced by this Note.

Amortization Period:                     . [Three hundred sixty (360) months or N/A
depending on term.]

Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.

Current Index: The published Index that is effective on the Business Day
immediately preceding the applicable Rate Change Date.

C-1-1

 

Default Rate: A rate equal to the lesser of four (4) percentage points above the
then-applicable Adjustable Rate or the maximum interest rate which may be collected from
Borrower under applicable law.

Disbursement Date: The date of disbursement of Advance proceeds hereunder.

First Payment Date: The first day of                     , ___. [For example, if the Note date is
January 1, then the First Payment Date will be February 1. If the Note date is any day
other than January 1, then the First Payment Date will be March 1.]

Indebtedness: The principal of, interest on, or any other amounts due at any time under,
this Note, the Security Instrument or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances to protect the security of the
Security Instrument under Section 12 of the Security Instrument.

Index: The British Bankers Association fixing of the London Inter-Bank Offered Rate for
1-month U.S. Dollar-denominated deposits as reported by Telerate through electronic
transmission. If the Index is no longer available, or is no longer posted through
electronic transmission, Lender will choose a new index that is based upon comparable
information and provide notice thereof to Borrower.

Initial Adjustable Rate:                     % per annum until the first Rate Change Date.

Lender: The holder of this Note.

Loan Year: The period beginning on the Disbursement Date and ending on the day before the
twelfth Rate Change Date and each successive twelve- (12) month period thereafter.

Margin:                                         %, which amount includes the Variable Facility Fee.

Master Agreement: The Master Credit Facility Agreement dated as of February 27, 2009, and
executed by and among Borrower and Lender, as amended, supplemented or otherwise amended
and restated from time to time.

Maturity Date: The first
day of              
            
                
              
     ,   
          
        , or any earlier date on
which the unpaid principal balance of this Note becomes due and payable by acceleration or
otherwise.

Payment Change Date: The first day of the month following each Rate Change Date until this
Note is repaid in full.

Prepayment Lockout Period: That period of time as may be stated in Schedule A attached
hereto, if any.

C-1-2

 

Prepayment Premium Term: The period beginning on the Disbursement Date and ending
on the last calendar day of the fourth (4th) month prior to the month in which the
Maturity Date occurs.

Rate Change Date: The First Payment Date and the first day of each month
thereafter until this Note is repaid in full.

Security Instrument: Individually and collectively, various multifamily mortgages,
deeds to secure debt or deeds of trust described in the Master Agreement.

Servicing Payment Date: Two (2) Business Days prior to the date each monthly
payment is due under this Note.

Variable Facility Fee: Has the meaning set forth in the Master Agreement.

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 Instrument.

     Section 2. Address for Payment. All payments due under this Note shall be payable at PNC ARCS
LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, or such other place as may be
designated by written notice to Borrower from or on behalf of Lender.

     Section 3. Payment of Principal and Interest. This Note will accrue interest on the
outstanding principal balance at the Adjustable Rate. Principal and interest shall be paid as
follows:

          (a) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

          (b) Interest Accrual. Interest shall accrue on the unpaid principal balance of this Note at
the Adjustable Rate. The Adjustable Rate shall change on each Rate Change Date until the Advance is
repaid in full. Interest under this Note shall be computed on the basis of a 360-day year. The
amount of each monthly payment made by Borrower pursuant to Paragraph 3(c)(4) below that is
allocated to interest will be based on the actual number of calendar days during such month and
shall be calculated by multiplying the unpaid principal balance of this Note by the applicable
Adjustable Rate, dividing the product by three hundred sixty (360) and multiplying the quotient by
the actual number of days elapsed during the month. Borrower understands that the amount
allocated to interest for each month will vary depending on the actual number of calendar days
during such month.

C-1-3

 

          (c) Adjustable Rate. The Initial Adjustable Rate shall be in effect until the first Rate
Change Date. From and after each Rate Change Date until the next Rate Change Date, the Adjustable
Rate shall be the sum of (i) the Current Index, and (ii) the Margin, which sum is then rounded to
three decimal places, subject to the limitations that the Adjustable Rate shall not be less than
the Margin. Accrued interest on this Note shall be paid in arrears.

          (d) Monthly Payments. Borrower acknowledges and agrees to pay all payments required each
month as set forth below (the “Required Monthly Payments”) due under this Note to Lender on
the Servicing Payment Date even though such Required Monthly Payments are due on the first day of
every month. Select one only:

	 	 	 	 	 
	 

	 	o
	 	Amortizing Advance. If the Advance is an amortizing Advance, consecutive monthly
installments of principal and interest, each in the amount of the Required Monthly
Payment, shall be payable on the First Payment Date and on the first day of each
month thereafter until the entire unpaid principal balance evidenced by this Note
is fully paid. The initial Required Monthly Payment shall be the amount required to
pay the unpaid principal balance of this Note in equal monthly installments,
including accrued interest at the Initial Adjustable Rate over the Amortization
Period. Any remaining principal and interest, if not sooner paid, shall be due and
payable on the Maturity Date. The initial Required Monthly Payment shall be
           
           
            
           
            
             
           Dollars (US
$                                        ). Thereafter, to the extent that the Adjustable Rate has changed,
the Required Monthly Payment shall change on each Payment Change Date based on the
then-applicable Adjustable Rate, and shall be in an amount equal to the sum of (i)
a principal payment equal to                                                              Dollars (US
$                                        ) plus (ii) an interest payment calculated utilizing the accrual
method stated in Paragraph 3(b) above.
	 
	 	 	 	 
	 

	 	o
	 	Interest Only Advance. If the Advance is an interest-only Advance, consecutive
monthly installments of interest only, each in the amount of the Required Monthly
Payment, shall be payable on the First Payment Date and on the first day of each
month thereafter until the entire unpaid principal balance evidenced by this Note
is fully paid. The entire unpaid principal balance and accrued but unpaid interest,
if not sooner paid, shall be due and payable on the Maturity Date. The initial
Required Monthly Payment shall be ___Dollars (US
$___). Thereafter, to the extent that the Adjustable Rate has
changed, the Required Monthly Payment shall change on each Payment Change Date
based on the then-applicable Adjustable Rate. The amount of the initial and any
changed Required Monthly Payment shall be calculated utilizing the interest accrual
method stated in Paragraph 3(b) above.

          (e) [Intentionally deleted.]

          (f) Notice of Interest Rate Change. Before each Payment Change Date, Lender shall
re-calculate the Adjustable Rate and shall notify Borrower (in the manner specified

C-1-4

 

in the Security Instrument for giving notices) of any change in the Adjustable Rate and the
Required Monthly Payment.

          (g) Correction to Required Monthly Payment. If Lender at any time determines, in its sole but
reasonable discretion, that it has miscalculated the amount of the Required Monthly Payment
(whether because of a miscalculation of the Adjustable Rate or otherwise), then Lender shall give
notice to Borrower of the corrected amount of the Required Monthly Payment (and the corrected
Adjustable Rate, if applicable) and (i) if the corrected amount of the Required Monthly Payment
represents an increase, then Borrower shall, within thirty (30) calendar days thereafter, pay to
Lender any sums that Borrower would have otherwise been obligated under this Note to pay to Lender
had the amount of the Required Monthly Payment not been miscalculated, or (ii) if the corrected
amount of the Required Monthly Payment represents a decrease thereof and Borrower is not otherwise
in breach or default under any of the terms and provisions of the Note, the Security Instrument or
any other loan document evidencing or securing the Note, then Borrower shall thereafter be paid the
sums that Borrower would not have otherwise been obligated to pay to Lender had the amount of the
Required Monthly Payment not been miscalculated.

          (h) Payments Before Due Date. Any regularly scheduled monthly installment of principal and
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.

          (i) Accrued Interest. Any accrued interest remaining past due for thirty (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. Any reference herein to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any amount added to
principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates
specified in this Note and shall be payable with such interest upon demand by Lender and absent
such demand, as provided in this Note for the payment of principal and interest.

     Section 4. Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which 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.

     Section 5. Security. The Indebtedness is secured, among other things, by the Security
Instrument, and reference is made to the Security Instrument for other rights of Lender concerning
the collateral for the Indebtedness.

     Section 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 Section 10, if
any, and all other amounts payable under this Note and any other Loan Document

C-1-5

 

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.

     Section 7. Late Charge. MONTHLY PAYMENTS UNDER THIS NOTE ARE DUE ON THE FIRST DAY OF EACH
AND EVERY MONTH UNTIL THIS NOTE IS PAID IN FULL. BORROWER HEREBY AGREES THAT SUCH PAYMENTS SHALL BE
MADE TO LENDER ON THE SERVICING PAYMENT DATE. THERE IS NO "GRACE” PERIOD FOR ANY MONTHLY
INSTALLMENTS DUE HEREUNDER. If any monthly installment due hereunder is not received by Lender
on or before the first day of each month or if any other amount payable under this Note or under
the Security Instrument or any other Loan Document is not received by Lender before or on 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 five percent (5%) 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 Advance 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 Section 8.

     Section 8. Default Rate. So long as any monthly installment or any other payment due under
this Note remains past due for thirty (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 the Default Rate. 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 Advance, that, during the time that any monthly
installment or payment under this Note is delinquent for more than thirty (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 thirty (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 Advance.

     Section 9. Limits on Personal Liability; Joint and Several Obligation. The provisions of
Article 14 of the Master Agreement (entitled “Limits on Personal Liability”) are

C-1-6

 

hereby incorporated into this Note by this reference to the fullest extent as if the text of such
Sections were set forth in its entirety herein.

     Section 10. Lockout; Voluntary and Involuntary Prepayments.

          (a) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay all or a
portion of the indebtedness evidenced hereby subject to the prepayment provisions and any
Prepayment Lockout Period described in Schedule A.

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

               (i) At any time after the expiration of the Prepayment Lockout Period, 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 (the “Last Day of the Month”) and only if
Borrower has complied with all of the following:

               (1) Borrower must give Lender at least thirty (30) days (if given via U.S. Postal
Service) or twenty (20) days (if given via facsimile, email or overnight courier), but not
more than sixty (60) days, prior written notice of Borrower’s intention to make a
prepayment (the “Prepayment Notice”). The Prepayment Notice shall be given in
writing (via facsimile, email, U.S. Postal Service or overnight courier) and addressed to
Lender. The Prepayment Notice shall include, at a minimum, the Business Day upon which
Borrower intends to make the prepayment (the “Intended Prepayment Date”).

               (2) Borrower acknowledges that Lender is not required to accept any voluntary
prepayment of this Note on any day other than the Last Day of the Month even if Borrower
has given a Prepayment Notice with an Intended Prepayment Date other than the Last Day of
the Month or if the Last Day of the Month is not a Business Day. Therefore, even if Lender
accepts a voluntary prepayment on any day other than the Last Day of the 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 Day of the Month shall be
deemed to have been received by Lender on the Last Day of the Month and any prepayment
calculation will include interest to and including the Last Day of the Month in which such
prepayment occurs. If the Last Day of the Month is not a Business Day, then Borrower must
make the payment on the Business Day immediately preceding the Last Day of the Month.

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

               (4) If, for any reason, Borrower fails to prepay this Note within five (5) Business
Days after the Intended Prepayment Date, then Lender shall have the right, but not the
obligation, to recalculate the prepayment premium pursuant to Schedule

C-1-7

 

 A based upon the date that Borrower actually prepays this Note.
Notwithstanding the foregoing, if the delayed prepayment occurs in a month other than the
month stated in the original Prepayment Notice, then Lender shall (a) have the right, but
not the obligation, to recalculate the prepayment premium pursuant to Schedule A based upon
the date that Borrower actually prepays this Note and (b) recalculate the amount of
interest payable. In either instance, for purposes of recalculation, such new prepayment
date shall be deemed the “Intended Prepayment Date.”

               (ii) 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.

               (iii) 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.

          (c) Notwithstanding the provisions of Section 10(b), no prepayment premium shall be
payable (1) with respect to any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument, or (2) as provided in
subparagraph (c) of Schedule A.

          (d) Schedule A is hereby incorporated by reference into this Note.

          (e) Any required prepayment of less than the entire unpaid principal balance of this Note
shall not extend or postpone the due date of any subsequent monthly installments or change the
amount of such installments, unless Lender agrees otherwise in writing.

          (f) 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.

          (g) Borrower further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the Advance 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.

     Section 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

C-1-8

 

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.

     Section 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.

     Section 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.

     Section 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 Advance 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 Advance 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.

C-1-9

 

     Section 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.

     Section 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.

     Section 17. Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial. The provisions of
Section 15.06 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.

     Section 18. Captions. The captions of the paragraphs of this Note are for convenience only
and shall be disregarded in construing this Note.

     Section 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
15.08 of the Master Agreement.

     Section 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.

[Remainder of page intentionally left blank.]

C-1-10

 

ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	 	 	 	 	 	 
	 

	 	þ
	 	Schedule A Prepayment Premium (required)
	 	 
	 
	 	 	 	 	 	 
	 

	 	o
	 	Schedule B Modifications to Multifamily Note	 	 

[Remainder of page intentionally left blank.]

C-1-11

 

     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:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership	 	 
	 	 	Its:	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust	 	 
	 	 	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

C-1-12

 

Pay to the order of                                                                     
                                , without recourse.

	 	 	 	 	 	 	 
	 	 	LENDER: 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

C-1-13

 

SCHEDULE A

PREPAYMENT PREMIUM

[USE IF 5-4-3-2-1 PREPAYMENT PREMIUM OPTION IS ELECTED BY BORROWER]

[5-7-10] YEAR TERM ARM ADVANCE — GRADUATED PREPAYMENT PREMIUM

(5-4-3-2-1 Prepayment Option)

Any prepayment premium payable under Section 10 of this Note shall be computed as follows:

	 	(a)	 	If Borrower voluntarily prepays this Note, Lender accelerates the unpaid principal balance
of this Note, or Lender applies collateral held by Lender to the repayment of any portion of the
unpaid principal balance of this Note as permitted in Section 10(b)(iii) of the Note (if any), the
prepayment premium shall be equal to the following percentage of the amount of principal being
prepaid at the time of such prepayment, acceleration or application:

	 	 	 	 	 
	First Loan Year
	 	 	5.00	%
	Second Loan Year
	 	 	4.00	%
	Third Loan Year
	 	 	3.00	%
	Fourth Loan Year
	 	 	2.00	%
	Fifth [through Tenth] Loan Year (except as set forth in (c) below)
	 	 	1.00	%

(b) For the purposes of this Note, a “Loan Year” shall have the meaning ascribed to it in this
Note.

(c) Notwithstanding the provisions of Section 10(b) of this Note or the foregoing, no
prepayment premium shall be payable with respect to any prepayment made on or after the last
calendar day of the fourth (4th) month prior to the month in which the Maturity Date occurs.

	 	 	 	 	 
	 

	 	 

INITIAL(S)
	 	 

C-1-14

 

SCHEDULE A

PREPAYMENT PREMIUM

[USE IF 1% PREPAYMENT PREMIUM OPTION IS SELECTED]

     Notwithstanding Paragraph 10 of this Note, Borrower shall not have the right voluntarily to
prepay any of the principal of this Note before the first anniversary of the date 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.

     Any prepayment premium payable under Paragraph 10 of this Note shall be computed as follows:

(a) Borrower shall have no right to make a voluntary prepayment of this Note, in whole or in
part, during the Prepayment Lockout Period. If, during the Prepayment Lockout Period, Lender
accelerates the unpaid principal balance of this Note or otherwise applies collateral held by
Lender to the repayment of any portion of the unpaid principal balance as permitted in Section
10(b)(ii) of the Note (if any), the prepayment premium shall be equal to the following percentage
of the amount of principal being prepaid at the time of such acceleration or application:

5.00%

(b) If, during the second through the tenth Loan Years, Borrower makes a voluntary prepayment
of this Note, Lender accelerates the unpaid principal balance of this Note, or the Lender applies
collateral held by Lender to the repayment of any portion of the unpaid principal balance as
permitted in Section 10(b)(ii) of the Note (if any), the prepayment premium shall be equal to the
following percentage of the amount of principal being prepaid at the time of such prepayment,
acceleration or application:

	 	 	 	 	 
	Second Loan Year
	 	 	1.00	%
	Third Loan Year
	 	 	1.00	%
	Fourth Loan Year
	 	 	1.00	%
	Fifth [through Tenth] Loan Year
	 	 	1.00	%

C-1-15

 

     (c) Notwithstanding the foregoing or the provisions of Paragraph 10(b) of this Note, no
prepayment premium shall be payable with respect to any prepayment made on or after the last
calendar day of the fourth (4th) month prior to the month in which the Maturity Date occurs.

	 	 	 	 	 
	 

	 	 

Borrower Initials
	 	 

C-1-16

 

EXHIBIT C-2 TO MASTER CREDIT FACILITY AGREEMENT

VARIABLE FACILITY NOTE
 (3-Month LIBOR Index Structured ARM)

[Need to modify if partially IO.]

	 	 	 	 	 	 	 
	US $
	 	 	 	 	,	 
	 

	 
	 	 
	 	 

     FOR VALUE RECEIVED, the undersigned (“Borrower”) jointly and severally (if more than one)
promises to pay to the order of PNC ARCS LLC, a Delaware limited liability company (“Lender”), the
principal sum of                                          Dollars (US $                    ), with
interest on the unpaid principal balance at the rates applicable from time to time set forth in
this Variable Facility Note (“Note”).

     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”), to evidence the
obligation of Borrower to repay a Variable 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 Variable Advance evidenced hereby is made.

     Section 1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used
in this Note, the following definitions shall apply:

Adjustable Rate: The initial Adjustable Rate shall be                     % per annum until the
first Rate Change Date. From and after each Rate Change Date until the next Rate
Change Date, the Adjustable Rate shall be the sum of (i) the Current Index, and
(ii) the Margin, which sum is then rounded to three decimal places, subject to the
limitations that the Adjustable Rate shall not be less than the Margin.

Advance: The advance evidenced by this Note.

Amortization Period:                    . [Three hundred sixty (360) months or N/A
depending on term.]

Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.

Current Index: The published Index that is effective on the Business Day
immediately preceding the applicable Rate Change Date.

C-2-1

 

Default Rate: A rate equal to the lesser of four (4) percentage points above the
then-applicable Adjustable Rate or the maximum interest rate which may be collected
from Borrower under applicable law.

Disbursement Date: The date of disbursement of Advance proceeds hereunder.

First Payment Date: The first day of                     , ___. [For example, if the Note
date is January 1, then the First Payment Date will be February 1. If the Note date
is any day other than January 1, then the First Payment Date will be March 1.]

Indebtedness: The principal of, interest on, or any other amounts due at any time
under, this Note, the Security Instrument or any other Loan Document, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security Instrument.

Index: The British Bankers Association fixing of the London Inter-Bank Offered Rate
for 3-month U.S. Dollar-denominated deposits as reported by Telerate through
electronic transmission. If the Index is no longer available, or is no longer
posted through electronic transmission, Lender will choose a new index that is
based upon comparable information and provide notice thereof to Borrower.

Initial Adjustable Rate: ___% per annum until the first Rate Change Date.

Lender: The holder of this Note.

Loan Year: The period beginning on the Disbursement Date and ending on the day
before the fourth Rate Change Date and each successive twelve- (12) month period
thereafter.

Margin:                      %, which amount includes the Variable Facility Fee.

Master Agreement: The Master Credit Facility Agreement dated as of February 27,
2009, and executed by and among Borrower and Lender, as amended, supplemented or
otherwise amended and restated from time to time.

Maturity Date: The first day of                     , ___, or any earlier
date on which the unpaid principal balance of this Note becomes due and payable by
acceleration or otherwise.

Payment Change Date: The first day of the month following each Rate Change Date
until this Note is repaid in full.

Prepayment Lockout Period: That period of time as may be stated in Schedule A
attached hereto, if any.

C-2-2

 

Prepayment Premium Term: The period beginning on the Disbursement Date and ending
on the last calendar day of the fourth (4th) month prior to the month in which the
Maturity Date occurs.

Rate Change Date: The first day of the month which is the second month following
the First Payment Date and the first day of every third month thereafter until this
Note is repaid in full.

Security Instrument: Individually and collectively, various multifamily mortgages,
deeds to secure debt or deeds of trust described in the Master Agreement.

Servicing Payment Date: Two (2) Business Days prior to the date each monthly
payment is due under this Note.

Variable Facility Fee: Has the meaning set forth in the Master Agreement.

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 Instrument.

     Section 2. Address for Payment. All payments due under this Note shall be payable at PNC ARCS
LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, or such other place as may be
designated by written notice to Borrower from or on behalf of Lender.

     Section 3. Payment of Principal and Interest. This Note will accrue interest on the
outstanding principal balance at the Adjustable Rate. Principal and interest shall be paid as
follows:

          (a) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

          (b) Interest Accrual. Interest shall accrue on the unpaid principal balance of this Note at
the Adjustable Rate. The Adjustable Rate shall change on each Rate Change Date until the Advance is
repaid in full. Interest under this Note shall be computed on the basis of a 360-day year. The
amount of each monthly payment made by Borrower pursuant to Paragraph 3(c)(4) below that is
allocated to interest will be based on the actual number of calendar days during such month and
shall be calculated by multiplying the unpaid principal balance of this Note by the applicable
Adjustable Rate, dividing the product by three hundred sixty (360) and multiplying the quotient by
the actual number of days elapsed during the month. Borrower understands that the amount allocated
to interest for each month will vary depending on the actual number of calendar days during such
month.

C-2-3

 

          (c) Adjustable Rate. The Initial Adjustable Rate shall be in effect until the first Rate
Change Date. From and after each Rate Change Date until the next Rate Change Date, the Adjustable
Rate shall be the sum of (i) the Current Index, and (ii) the Margin, which sum is then rounded to
three (3) decimal places, subject to the limitations that the Adjustable Rate shall not be less
than the Margin. Accrued interest on this Note shall be paid in arrears.

          (d) Monthly Payments. Borrower acknowledges and agrees to pay all payments required each
month as set forth below (the “Required Monthly Payments”) due under this Note to Lender on the
Servicing Payment Date even though such Required Monthly Payments are due on the first day of every
month. Select one only:

	 	o	 	Amortizing Advance. If the Advance is an amortizing Advance, consecutive monthly
installments of principal and interest, each in the amount of the Required Monthly
Payment, shall be payable on the First Payment Date and on the first day of each
month thereafter until the entire unpaid principal balance evidenced by this Note
is fully paid. The initial Required Monthly Payment shall be the amount required to
pay the unpaid principal balance of this Note in equal monthly installments,
including accrued interest at the Initial Adjustable Rate over the Amortization
Period. Any remaining principal and interest, if not sooner paid, shall be due and
payable on the Maturity Date. The initial Required Monthly Payment shall be
                     Dollars
(US $             
       ). Thereafter, to the extent that the Adjustable Rate has changed,
the Required Monthly Payment shall change on each Payment Change Date based on the
then-applicable Adjustable Rate, and shall be in an amount equal to the sum of (i)
a principal payment equal to                      Dollars (US
$                    ) plus (ii) an interest payment calculated utilizing the accrual
method stated in Paragraph 3(b) above.
	 
	 	o 	 	Interest Only Advance. If the Advance is an interest-only Advance, consecutive
monthly installments of interest only, each in the amount of the Required Monthly
Payment, shall be payable on the First Payment Date and on the first day of each
month thereafter until the entire unpaid principal balance evidenced by this Note
is fully paid. The entire unpaid principal balance and accrued but unpaid interest,
if not sooner paid, shall be due and payable on the Maturity Date. The initial
Required Monthly Payment shall be                      Dollars (US
$                    ). Thereafter, to the extent that the Adjustable Rate has
changed, the Required Monthly Payment shall change on each Payment Change Date
based on the then-applicable Adjustable Rate. The amount of the initial and any
changed Required Monthly Payment shall be calculated utilizing the interest accrual
method stated in Paragraph 3(b) above.

               (e) [Intentionally deleted.]

               (f) Notice of Interest Rate Change. Before each Payment Change Date, Lender shall
re-calculate the Adjustable Rate and shall notify Borrower (in the manner specified in

C-2-4

 

the Security Instrument for giving notices) of any change in the Adjustable Rate and the Required
Monthly Payment.

          (g) Correction to Required Monthly Payment. If Lender at any time determines, in its sole but
reasonable discretion, that it has miscalculated the amount of the Required Monthly Payment
(whether because of a miscalculation of the Adjustable Rate or otherwise), then Lender shall give
notice to Borrower of the corrected amount of the Required Monthly Payment (and the corrected
Adjustable Rate, if applicable) and (i) if the corrected amount of the Required Monthly Payment
represents an increase, then Borrower shall, within thirty (30) calendar days thereafter, pay to
Lender any sums that Borrower would have otherwise been obligated under this Note to pay to Lender
had the amount of the Required Monthly Payment not been miscalculated, or (ii) if the corrected
amount of the Required Monthly Payment represents a decrease thereof and Borrower is not otherwise
in breach or default under any of the terms and provisions of the Note, the Security Instrument or
any other loan document evidencing or securing the Note, then Borrower shall thereafter be paid the
sums that Borrower would not have otherwise been obligated to pay to Lender had the amount of the
Required Monthly Payment not been miscalculated.

          (h) Payments Before Due Date. Any regularly scheduled monthly installment of principal and
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.

          (i) Accrued Interest. Any accrued interest remaining past due for thirty (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. Any reference herein to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any amount added to
principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates
specified in this Note and shall be payable with such interest upon demand by Lender and absent
such demand, as provided in this Note for the payment of principal and interest.

     Section 4. Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which 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.

     Section 5. Security. The Indebtedness is secured, among other things, by the Security
Instrument, and reference is made to the Security Instrument for other rights of Lender concerning
the collateral for the Indebtedness.

     Section 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 Section 10, if
any, and all other amounts payable under this Note and any other Loan Document

C-2-5

 

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.

     Section 7. Late Charge. MONTHLY PAYMENTS UNDER THIS NOTE ARE DUE ON THE FIRST DAY OF EACH AND
EVERY MONTH UNTIL THIS NOTE IS PAID IN FULL. BORROWER HEREBY AGREES THAT SUCH PAYMENTS SHALL BE
MADE TO LENDER ON THE SERVICING PAYMENT DATE. THERE IS NO "GRACE” PERIOD FOR ANY MONTHLY
INSTALLMENTS DUE HEREUNDER. If any monthly installment due hereunder is not received by Lender on
or before the first day of each month or if any other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender before or on 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 five percent (5%) 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 Advance 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 Section 8.

     Section 8. Default Rate. So long as any monthly installment or any other payment due under
this Note remains past due for thirty (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 the Default Rate. 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 Advance, that, during the time that any monthly
installment or payment under this Note is delinquent for more than thirty (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 thirty (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 Advance.

     Section 9. Limits on Personal Liability; Joint and Several Obligation. The provisions of
Article 14 of the Master Agreement (entitled “Limits on Personal Liability”) are

C-2-6

 

hereby incorporated into this Note by this reference to the fullest extent as if the text of such
Sections were set forth in its entirety herein.

     Section 10. Lockout; Voluntary and Involuntary Prepayments.

          (a) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay all or a
portion of the indebtedness evidenced hereby subject to the prepayment provisions and any
Prepayment Lockout Period described in Schedule A.

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

               (i) At any time after the expiration of the Prepayment Lockout Period, 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(the “Last Day of the Month”) and only if Borrower has
complied with all of the following:

               (1) Borrower must give Lender at least thirty (30) days (if given via U.S. Postal
Service) or twenty (20) days (if given via facsimile, email or overnight courier), but not
more than sixty (60) days, prior written notice of Borrower’s intention to make a
prepayment (the “Prepayment Notice”). The Prepayment Notice shall be given in writing (via
facsimile, email, U.S. Postal Service or overnight courier) and addressed to Lender. The
Prepayment Notice shall include, at a minimum, the Business Day upon which Borrower intends
to make the prepayment (the “Intended Prepayment Date”).

               (2) Borrower acknowledges that Lender is not required to accept any voluntary
prepayment of this Note on any day other than the Last Day of the Month even if Borrower
has given a Prepayment Notice with an Intended Prepayment Date other than the Last Day of
the Month or if the Last Day of the Month is not a Business Day. Therefore, even if Lender
accepts a voluntary prepayment on any day other than the Last Day of the 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 Day of the Month shall be
deemed to have been received by Lender on the Last Day of the Month and any prepayment
calculation will include interest to and including the Last Day of the Month in which such
prepayment occurs. If the Last Day of the Month is not a Business Day, then Borrower must
make the payment on the Business Day immediately preceding the Last Day of the Month.

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

               (4) If, for any reason, Borrower fails to prepay this Note within five (5) Business
Days after the Intended Prepayment Date, then Lender shall have the right, but not the
obligation, to recalculate the prepayment premium pursuant to Schedule

C-2-7

 

A based upon the date that Borrower actually prepays this Note. Notwithstanding the
foregoing, if the delayed prepayment occurs in a month other than the month stated in the
original Prepayment Notice, then Lender shall (a) have the right, but not the obligation,
to recalculate the prepayment premium pursuant to Schedule A based upon the date that
Borrower actually prepays this Note and (b) recalculate the amount of interest payable. In
either instance, for purposes of recalculation, such new prepayment date shall be deemed
the “Intended Prepayment Date.”

               (ii) 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.

               (iii) 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.

          (c) Notwithstanding the provisions of Section 10(b), no prepayment premium shall be payable
(1) with respect to any prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph
(c) of Schedule A.

          (d) Schedule A is hereby incorporated by reference into this Note.

          (e) Any required prepayment of less than the entire unpaid principal balance of this Note
shall not extend or postpone the due date of any subsequent monthly installments or change the
amount of such installments, unless Lender agrees otherwise in writing.

          (f) 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.

          (g) Borrower further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the Advance 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.

     Section 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

C-2-8

 

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.

     Section 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.

     Section 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.

     Section 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 Advance 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 Advance 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.

C-2-9

 

     Section 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.

     Section 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.

     Section 17. Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial. The provisions of
Section 15.06 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.

     Section 18. Captions. The captions of the paragraphs of this Note are for convenience only
and shall be disregarded in construing this Note.

     Section 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
15.08 of the Master Agreement.

     Section 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.

[Remainder of page intentionally left blank.]

C-2-10

 

ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	þ	 	Schedule A Prepayment Premium (required)
	 
	 	o	 	Schedule B Modifications to Multifamily Note

[Remainder of page intentionally left blank.]

C-2-11

 

     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:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited
liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership	 	 
	 	 	Its:	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust	 	 
	 	 	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

C-2-12

 

Pay to the order of                                        , without recourse.

	 	 	 	 	 
	 

	 	LENDER:	 	 
	 

	 	 

	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

C-2-13

 

SCHEDULE A

PREPAYMENT PREMIUM

[USE IF 5-4-3-2-1 PREPAYMENT PREMIUM OPTION IS ELECTED BY BORROWER]

5-YEAR TERM ARM ADVANCE — GRADUATED PREPAYMENT PREMIUM

(5-4-3-2-1 Prepayment Option)

Any prepayment premium payable under Section 10 of this Note shall be computed as follows:

	 	(a)	 	If Borrower voluntarily prepays this Note, Lender accelerates the unpaid principal balance
of this Note, or Lender applies collateral held by Lender to the repayment of any portion of the
unpaid principal balance of this Note as permitted in Section 10(b)(iii) of the Note (if
any), the prepayment premium shall be equal to the following percentage of the amount of principal
being prepaid at the time of such prepayment, acceleration or application:

	 	 	 	 	 
	First Loan Year
	 	 	5.00	%
	Second Loan Year
	 	 	4.00	%
	Third Loan Year
	 	 	3.00	%
	Fourth Loan Year
	 	 	2.00	%
	Fifth [through Tenth] Loan
Year (except as set forth in
(c) below)
	 	 	1.00	%

(b) For the purposes of this Note, a “Loan Year” shall have the meaning ascribed to it in
this Note.

(c) Notwithstanding the provisions of Section 10(b) of this Note or the foregoing, no
prepayment premium shall be payable with respect to any prepayment made on or after the
last calendar day of the fourth (4th) month prior to the month in which the Maturity Date
occurs.

	 	 	 
	 

	 	 
	 

	 	INITIAL(S)

C-2-14

 

SCHEDULE A

PREPAYMENT PREMIUM

[USE IF BORROWER ELECTS 1% PREPAYMENT PREMIUM OPTION]

     Notwithstanding Paragraph 10 of this Note, Borrower shall not have the right voluntarily to
prepay any of the principal of this Note before the first anniversary of the date 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.

     Any prepayment premium payable under Paragraph 10 of this Note shall be computed as follows:

(a) Borrower shall have no right to make a voluntary prepayment of this Note, in whole or in
part, during the Prepayment Lockout Period. If, during the Prepayment Lockout Period, Lender
accelerates the unpaid principal balance of this Note or otherwise applies collateral held by
Lender to the repayment of any portion of the unpaid principal balance as permitted in Section
10(b)(ii) of the Note (if any), the prepayment premium shall be equal to the following percentage
of the amount of principal being prepaid at the time of such acceleration or application:

5.00%

(b) If, during the second through the tenth Loan Years, Borrower makes a voluntary prepayment
of this Note, Lender accelerates the unpaid principal balance of this Note, or the Lender applies
collateral held by Lender to the repayment of any portion of the unpaid principal balance as
permitted in Section 10(b)(ii) of the Note (if any), the prepayment premium shall be equal to the
following percentage of the amount of principal being prepaid at the time of such prepayment,
acceleration or application:

	 	 	 	 	 
	Second Loan Year
	 	 	1.00	%
	Third Loan Year
	 	 	1.00	%
	Fourth Loan Year
	 	 	1.00	%
	Fifth
[through Tenth] Loan Year
	 	 	1.00	%

C-2-15

 

     (c) Notwithstanding the foregoing or the provisions of Paragraph 10(b) 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.

	 	 	 
	 

	 	 
	 

	 	Borrower Initials

C-2-16

 

EXHIBIT D TO MASTER CREDIT FACILITY AGREEMENT

INTEREST RATE CAP SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT

     THIS INTEREST RATE CAP SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT (this “Agreement”),
dated as of                     , 2009, is by and between (i) (a) CMF 15 PORTFOLIO LLC, a Delaware limited
liability company, together with their successors and assigns (“Borrower”), and (ii) PNC
ARCS LLC, a Delaware limited liability company, together with its successors and assigns
(“Lender”).

RECITALS:

     A. Borrower and Lender are party to or have joined into that certain Master Credit Facility
Agreement dated as of February 27, 2009, (such agreement, as the same may be amended, supplemented
or otherwise modified or amended and restated, from time to time, the “Master Agreement”),
pursuant to which Lender has agreed to provide certain Fixed Advances and Variable 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. The Advances made pursuant to the Master Agreement are evidenced by one or more notes
bearing the title Fixed Facility Note (collectively, the “Fixed Note”) and/or Variable
Facility Note (the “Variable Note”; together with the Fixed Note, the “Note”).

     C. The Note is secured by, among other things, the Cap Documents (defined below) and various
Multifamily Mortgages, Deeds of Trust, and/or Deeds to Secure Debt, Assignment of Rents and
Security Agreements from Borrower to Lender (the “Security Instrument”), granting a
lien on each property identified as a Mortgaged Property in the Master Agreement (collectively, the
“Property”).

     D. Lender has required, and Borrower has agreed, to acquire and maintain an interest rate cap
or caps (the “Interest Rate Cap”) pursuant to one or more interest rate cap agreements
attached as Exhibit A to this Agreement (the “Cap Documents”), in order to provide
additional support and collateral for Borrower’s obligations to Lender under the Note and other
Loan Documents.

     E. To the extent that the initial Interest Rate Cap acquired by Borrower terminates before the
last Maturity Date of the Variable Advances then outstanding (the “Variable Facility
Termination Date”), Borrower is required to make monthly deposits with Lender for the
acquisition of a subsequent Interest Rate Cap, such deposits to be held in an escrow account by
Lender pursuant to the terms of this Agreement.

     F. 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 has been or will be assigned to Fannie Mae pursuant to that certain Assignment of
Master Agreement and Other Loan Documents, dated as of even date with the Master Agreement (the
“Assignment”). Fannie Mae has not assumed and will not assume any

D-1

 

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.

     G. To (i) evidence Borrower’s obligations to maintain an Interest Rate Cap while Variable
Advances remain Outstanding, (ii) to the extent applicable, to make monthly deposits for the
acquisition of a subsequent Interest Rate Cap, and (iii) as further security for Borrower’s
obligations under the Master Agreement and the Note, Borrower and 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 by Borrower and Lender, Borrower and Lender agree as follows:

ARTICLE 1

DEFINITIONS; RULES OF CONSTRUCTION

     Section 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.

     Section 1.2. Capitalized Terms; Definitions. All 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. Unless otherwise defined in this
Agreement, terms used in this Agreement that are defined in the Uniform Commercial Code as adopted
in the District of Columbia (“UCC”) shall have the meaning given those terms in the UCC.

     Section 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.

     Section 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.

D-2

 

ARTICLE 2

TERMS OF INTEREST RATE CAP

     Section 2.1. General Terms. To protect against fluctuations in interest rates during
the term of the Variable Facility Commitment, Borrower shall make arrangements for an Interest Rate
Cap to be in place and maintained at all times with respect to the Variable Advance in accordance
with the following terms and conditions:

          (a) Term. Except as hereinafter permitted, the initial Interest Rate Cap purchased by
Borrower with respect to the Loan (the “Initial Interest Rate Cap”) shall be in effect for
a period beginning on the Closing Date of such Variable Advance and terminating not earlier than
the first to occur of (i) the last day of the sixtieth (60th) full calendar month thereafter and
(ii) the Variable Facility Termination Date. A subsequent Interest Rate Cap (the “Subsequent
Interest Rate Cap”) shall be required if (i) the Initial Interest Rate Cap expires or
terminates prior to the Variable Facility Termination Date and at such expiration Variable Advances
are Outstanding, or (ii) if and at such times as a new Variable Advance is funded. Each Subsequent
Interest Rate Cap must be in effect for a period beginning on the day of the expiration of the
prior Interest Rate Cap, or on the Closing Date of the new Variable Advance (as applicable), and
ending not earlier than the first to occur of (i) the last day of the sixtieth (60th) full calendar
month thereafter, and (ii) the Variable Facility Termination Date. It is the intention of the
parties, and a condition of the Variable Facility Commitment, that Borrower shall obtain, and shall
maintain at all times during the term of this Agreement so long as any Variable Facility Advance is
Outstanding, an Interest Rate Cap or Interest Rate Caps in an aggregate notional principal amount
equal to the Variable Advances Outstanding in effect from time to time and until the Variable
Facility Termination Date and meeting the conditions set forth in this Agreement.

          (b) Notional Amount. The notional amount of the Initial Interest Rate Cap shall be
equal to the original principal balance of the Variable Advances for the entire term of the Initial
Interest Rate Cap. The notional amount of any Subsequent Interest Rate Cap shall be equal to the
outstanding principal balance of the Variable Advances at the time that any Subsequent Interest
Rate Cap is to become effective if the Variable Facility Commitment decreases, Borrower may amend
the Interest Rate Cap or Interest Rate Caps to provide for a decrease in the notional amount to an
amount equal to the reduced amount of the Variable Facility Commitment, provided that Lender gives
its prior written approval to the documents reflecting the amendment (which approval shall not be
unreasonably withheld, delayed or conditioned).

          (c) Strike Rate. Each Initial and any Subsequent Interest Rate Cap shall have a strike
rate equal to the notional interest rate not greater than the lowest interest rate that would
result in an Aggregate Debt Service Coverage Ratio of not less than 1.10:1.0 (assuming no
amortization on a stressed basis as set forth in the Master Agreement) (the “Strike Rate”).

          (d) Interest Rate Cap Documents and Counterparty. All Interest Rate Caps shall be
evidenced, governed and secured on terms and conditions, and pursuant to rate cap agreements and
related documentation (the “Interest Rate Cap Documents”), in form and

D-3

 

content acceptable to Lender, and with an interest rate cap provider (the “Counterparty”)
approved by Lender.

     Section 2.2. Payments Made under Interest Rate Cap. The Interest Rate Cap Documents
shall require the Counterparty to make all payments due under the Interest Rate Cap directly to
Lender. Such payments will be paid over to Borrower only if (i) there is no Event of Default (as
hereinafter defined), and (ii) Lender has received payment in full for all amounts due under the
Note and other Loan Documents.

     Section 2.3. Termination of Interest Rate Cap. Borrower shall not terminate, transfer
or consent to any transfer of any existing Interest Rate Cap without Lender’s prior written
consent; provided, however, that if, and at such time as, any Variable Advances due and owing under
the Master Agreement and all other Loan Documents are paid in full or if all of the Variable
Advances are converted to Fixed Advances, Borrower shall have the right to terminate the existing
Interest Rate Cap with respect to such Variable Advances in accordance with Section 8.2 of this
Agreement.

ARTICLE 3

INTEREST RATE CAP RESERVE ACCOUNT

     Section 3.1. Obligation to Maintain Interest Rate Cap Reserve Account. During any
period in which an Interest Rate Cap expiring prior to the Variable Facility Termination Date is in
effect, Borrower is required to make Monthly Deposits (as defined below), to be held in an interest
bearing escrow account (the “Interest Rate Cap Reserve Account”) to provide a cash reserve
for the purchase of a Subsequent Interest Rate Cap. Borrower shall, with each monthly payment due
under the Master Agreement, deposit with Lender the Monthly Deposit (defined below) into the
Interest Rate Cap Reserve Account.

     Section 3.2. Monthly Deposit. The “Monthly Deposit” means, with respect to
the first twelve (12) months after the purchase of the Initial Interest Rate Cap, an amount equal
to one-sixtieth (1/60) of one hundred percent (100%) of the cost, as reasonably estimated by
Lender, to obtain any required Subsequent Interest Rate Cap. At the end of each twelve (12) month
period thereafter, Lender shall estimate the cost of the Subsequent Interest Rate Cap and shall
adjust the Monthly Deposit based on the then current estimate for purchase of the Subsequent
Interest Rate Cap. No adjustment shall be made to the Monthly Deposit if Lender determines that the
current estimate of the cost of the Subsequent Interest Rate Cap remains the same or has decreased.
Borrower shall continue to make the Monthly Deposits at the level required for the most recent
twelve (12) month period until Lender delivers written notice of a change in the amount of the
Monthly Deposit.

     Section 3.3. Terms of Interest Rate Cap Reserve Account. Lender shall deposit the
Monthly Deposits into an Interest Rate Cap Reserve Account that meets the standards for custodial
accounts as required by Lender from time to time. (All Monthly Deposits and all other funds in the
Interest Rate Cap Reserve Account are referred to collectively as the “Interest Rate Cap
Reserve.”) Lender or a designated representative of Lender shall have the sole right to make
withdrawals from the Interest Rate Cap Reserve Account. All interest earned on or profits realized
from amounts on deposit in the Interest Rate Cap Reserve Account shall be added to and

D-4

 

become part of the Interest Rate Cap Reserve. Lender shall not be responsible for any losses
resulting from the investment of the Interest Rate Cap Reserve or for obtaining any specific level
or percentage of earnings on such investment. If applicable law requires and provided no Event of
Default exists under any of the Loan Documents, Lender shall pay to Borrower the interest earned on
the Interest Rate Cap Reserve on January 1 of each year. Otherwise, all interest earnings shall
remain in the Interest Rate Cap Reserve Account.

     Section 3.4.
Lender’s Duties Regarding the Interest Rate Cap Reserve Account. Lender
acknowledges that:

          (a) it will hold the Monthly Deposits and any investments in the Interest Rate Cap Reserve
pursuant to the terms of this Agreement;

          (b) it will credit all Monthly Deposits and any investments in the Interest Rate Cap Reserve
on its own books and records to the Interest Rate Cap Reserve Account, subject to the security
interests created in this Agreement;

          (c) it will hold all Monthly Deposits for the credit of the Interest Rate Cap Reserve, subject
to the security interest and the terms of this Agreement; and

          (d) it will keep accurate records regarding amounts on deposit in the Interest Rate Cap
Reserve Account and any interest earned on or profits realized from amounts on deposit in the
Interest Rate Cap Reserve Account.

     Section 3.5. Irrevocable Deposits in Escrow. All deposits into the Interest Rate Cap
Reserve Account constitute irrevocable payments in escrow solely for use as described in this
Agreement. Borrower shall not have any control over the use of, or any right to withdraw any moneys
from the Interest Rate Cap Reserve Account or any proceeds thereof except as provided in
Section 3.7 of this Agreement, nor shall Borrower have any right, title or interest in the
Interest Rate Cap Reserve Account, other than Borrower’s right to receive interest pursuant to
Section 3.3 above and Borrower’s right to the return of the Interest Rate Cap Reserve
Account pursuant to Section 3.8 below.

     Section 3.6. Request For Disbursement. At least ten (10) Business Days prior to the
date on which the Initial Interest Rate Cap is to expire, Borrower shall be required to purchase
the Subsequent Interest Rate Cap on terms and conditions satisfactory to Lender. In such event, and
provided that funds are available in the Interest Rate Cap Reserve Account, Borrower shall request
a withdrawal from the Interest Rate Cap Reserve Account to acquire the Subsequent Interest Rate
Cap. Each written request for disbursement from the Interest Rate Cap Reserve Account shall
specify (i) the purchase price of the Subsequent Interest Rate Cap (the “Purchase Price”);
(ii) the name, address, contact name, telephone number and wiring instructions of the Counterparty;
(iii) the date by which the Counterparty requires payment of the Purchase Price (the “Payment
Date”); and (iv) such other information as Lender may require.

     Section 3.7. Disbursement for Purchase of Subsequent Interest Rate Cap. Upon receipt
by Lender of a written request from Borrower in accordance with Section 3.6 above, and the
determination by Lender that all applicable terms and conditions of this Agreement have been
satisfied, Lender shall disburse to the Counterparty of the Subsequent Interest Rate Cap, an

D-5

 

amount from the Interest Rate Cap Reserve Account equal to the lesser of (i) the Purchase Price, or
(ii) the amount then on deposit in the Interest Rate Cap Reserve Account. In no event shall Lender
be obligated to disburse funds from the Interest Rate Cap Reserve Account if an Event of Default
has occurred.

     Section 3.8. Return of Interest Rate Cap Reserve Account to Borrower. The parties
acknowledge that:

          (a) For so long as Borrower has no obligation to purchase additional Subsequent Interest Rate
Caps under the terms of this Agreement or the Master Agreement, any balance remaining in the
Interest Rate Cap Reserve Account after payment of the Purchase Price shall be delivered to
Borrower on or promptly following the Payment Date and Borrower shall have no further obligation to
make Monthly Deposits hereunder.

          (b) If the Outstanding Variable Advances are paid in part or in full, or if all or any portion
of the Variable Facility Commitment is converted to a Fixed Facility Commitment, the balance of the
Interest Rate Cap Reserve Account shall be adjusted in proportion to the amount equal to the
reduction of the Outstanding Variable Advances or the portion of the Variable Facility Commitment
converted to a Fixed Facility Commitment. Lender shall deliver to Borrower any excess funds in the
Interest Rate Cap Reserve Account on account of such adjustment promptly following such payment or
conversion. In addition, Borrower’s obligation to make future Monthly Deposits hereunder shall
cease and terminate to the extent and upon the earlier of (i) conversion of all or a portion of the
Variable Facility Commitment to a Fixed Facility Commitment, and (ii) payment in part or in full of
the Outstanding Variable Advances.

ARTICLE 4

SECURITY INTEREST IN COLLATERAL; FURTHER ASSURANCES

     Section 4.1. Security Interest in Collateral. As security for the due, punctual, full
and exact payment, performance or observance by Borrower of: (i) all Borrower’s obligations under
the Master Agreement, the Note and the other Loan Documents (the “Obligations”), whether at
stated maturity, by acceleration or otherwise, whether now outstanding or hereafter arising, and
(ii) all other obligations which may be owing to Lender from time to time under the Loan Documents,
Borrower hereby transfers, grants, hypothecates, pledges, sets over and delivers to Lender, its
successors and assigns, a lien and continuing security interest in all of Borrower’s right, title
and interest in and to the following property whether now owned or hereafter acquired (all of which
is collectively called the “Collateral”):

               (i) the Interest Rate Cap and the Interest Rate Cap Documents representing the initial
Interest Rate Cap and all Subsequent Interest Rate Caps;

               (ii) any and all moneys (collectively, “Payments”) payable to Borrower, from time to
time, pursuant to the Interest Rate Cap Documents by the Counterparty, whether credited to the
Interest Rate Cap Reserve Account, held in the course of payment or collection by Lender, or
otherwise;

               (iii) any residual right, title or interest Borrower may have in the Interest Rate Cap Reserve
Account (to the extent required by this Agreement);

D-6

 

          (iv) all Monthly Deposits, whether credited to the Interest Rate Cap Reserve Account, held in
the course of payment or collection by Lender, or otherwise;

          (v) all interest earned and profits realized on funds in the Interest Rate Cap Reserve
Account;

          (vi) 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 Interest Rate Cap Documents;

          (vii) all cash, funds, investments, securities, accounts, general intangibles and all other
property held from time to time in the Interest Rate Cap Reserve Account and all certificates and
instruments representing or evidencing any of the foregoing;

          (viii) all rights of Borrower under any of the foregoing, including all rights of Borrower to
the Payments, contract rights and general intangibles now existing or hereafter arising with
respect to any or all of the foregoing;

          (ix) all documents, writings, books, files, records and other documents arising from or
relating to any of the foregoing, whether now existing or hereafter arising;

          (x) all extensions, renewals and replacements of the foregoing; and

          (xi) all cash and non-cash proceeds and products of any of the foregoing, including, without
limitation, interest, dividends, cash, instruments, proceeds of any insurance, and other property
from time to time received, receivable or otherwise distributed or distributable in respect of or
in exchange for any or all of the foregoing.

     Borrower hereby authorizes Lender to file financing statements, continuation statements and
financing statement amendments in such form as Lender may require to perfect or continue the
perfection of this security interest in the Collateral and Borrower agrees, if Lender so requests,
to execute and deliver to Lender such financing statements, continuation statements and amendments.
Borrower shall pay all filing costs and all costs and expenses of any record searches for financing
statements that Lender may require.

     Section 4.2. Further Assurances. At any time and from time to time, at the expense of
Borrower, Borrower shall promptly give, execute, deliver, file and record any notice, statement,
instrument, document, agreement or other paper and do such other acts and things that may be
necessary, or that Lender may request, in order to perfect, continue and protect any security
interest granted or purported to be granted by this Agreement or to enable Lender to exercise and
enforce its rights and remedies under this Agreement.

     Section 4.3. Competing Security Arrangements. Borrower shall not execute, file,
permit to be filed or suffer to remain on file in any jurisdiction any security agreement,
financing statement or like agreement or instrument with respect to the Collateral, or any part of
the Collateral, naming anyone other than Lender as the secured party. Borrower shall not sell,
exchange or transfer or otherwise dispose of any of the Collateral, or any interest in the
Collateral, other than any security interest or other lien in favor of Lender.

D-7

 

     Section 4.4. No Change. Borrower will not voluntarily or involuntarily change its
principal place of business, chief executive office, name or identity, without at least thirty (30)
days prior written notice to Lender, except in the event of a change in principal place of business
or chief executive office necessitated by fire, flood or other calamity, in which case such notice
shall be provided as soon as practicable.

     Section 4.5. Defense of Collateral. Borrower will defend the Collateral against all
claims and demands of all persons at any time claiming the same or any interest in the Collateral.

ARTICLE 5

DELIVERY OF INTEREST RATE CAP DOCUMENTS

     Section 5.1. Acquisition of Interest Rate Cap; Delivery of Interest Rate Cap
Documents. Borrower has, on or before the date of this Agreement, executed and delivered the
Interest Rate Cap Documents to the Counterparty and has delivered to Lender fully executed
originals of such Interest Rate Cap Documents. True, complete and correct copies of the Interest
Rate Cap Documents and all amendments thereto, fully executed by all parties, are attached as
Exhibit A hereto. Borrower hereby represents and warrants to Lender that there is no additional
security for or any other arrangements or agreements relating to the Interest Rate Cap Documents
and that the Counterparty has consented to Borrower’s pledge of its rights and interests in the
Interest Rate Cap to Lender as security for the Loan.

     Section 5.2. Obligations Remain Absolute. Nothing contained herein shall relieve
Borrower of its primary obligation to pay all amounts due in respect of its obligations under the
Note and the other Loan Documents.

     Section 5.3. Subsequent Interest Rate Caps. Borrower agrees to execute and deliver to
Lender a Supplemental Agreement substantially in the form of the
attached Exhibit B attached hereto
on each occasion on which Borrower acquires a Subsequent Interest Rate Cap. Borrower shall, on or
before the date any Subsequent Interest Rate Cap is to become effective, execute and deliver the
Interest Rate Cap Documents representing the Subsequent Interest Rate Cap to the Counterparty and
deliver to Lender fully executed originals of such Interest Rate Cap Documents to be held under
this Agreement as a part of the Collateral.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

     Section 6.1. Representations and Warranties of Borrower. Borrower represents and
warrants to Lender that:

          (a) Borrower has paid to the Counterparty the entire cost of the initial Interest Rate Cap.

          (b) The individuals who are signing and delivering this Agreement on behalf of Borrower have
been duly authorized to do so in accordance with the documents and instruments pursuant to which
Borrower is organized and which govern the conduct of Borrower’s business.

D-8

 

          (c) No consent of any other person or entity and no authorization, approval, or other action
by, and no notice to or filing with, any governmental authority or regulatory body is required or
will be required (i) for the pledge by Borrower of the Collateral pursuant to this Agreement or any
Supplemental Agreement or for the execution, delivery or performance of this Agreement or any
Supplemental Agreement by Borrower, (ii) for the perfection or maintenance of the security interest
created hereby or by any Supplemental Agreement (including the first priority nature of such
security interest) other than the filing of any financing statement as may be required by the UCC,
or (iii) for the execution, delivery or performance of this Agreement by Borrower; there are no
conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

          (d) Neither the execution nor delivery of this Agreement or any Supplemental Agreement nor the
performance by Borrower of its obligations under this Agreement or any Supplemental Agreement, nor
the consummation of the transactions contemplated by this Agreement or any Supplemental Agreement,
will (i) conflict with any provision of the organizational documents of Borrower; (ii) conflict
with, result in a breach of, or constitute a default (or an event which would, with the passage of
time or the giving of notice or both, constitute a default) under, or give rise to a right to
terminate, amend, modify, abandon or accelerate, any contract, agreement, promissory note, lease,
indenture, instrument or license to which Borrower is a party or by which Borrower’s assets or
properties may be bound or affected; (iii) violate or conflict with any federal, state or local
law, statute, ordinance, rule, regulation, order, judgment, decree or arbitration award which is
either applicable to, binding upon or enforceable against Borrower; (iv) result in or require the
creation or imposition of any lien, security interest, option or other charge or encumbrance
(“Liens”) upon or with respect to the Collateral, other than Liens in favor of Lender; (v)
violate any legally protected right of any Person or give to any Person a right or claim against
Borrower; or (vi) require the consent, approval, order or authorization of, or the registration,
declaration or filing (except to the extent that the filing of financing statements may be
applicable) with, any federal, state or local government entity.

          (e) Borrower is and shall be the sole legal and beneficial owner of, and has and will have
good and marketable title to (and has full right and authority to pledge and assign), the
Collateral, free and clear of all Liens (other than in favor of Lender), all fiduciary obligations
of any kind and any adverse claim of title thereto and the Collateral is not subject to any offset,
right of redemption, defense or counterclaim of a third party. There is no additional security for
or any other arrangements or agreements relating to the Interest Rate Cap Documents, except as may
have been disclosed to Lender in writing.

          (f) The security interest of Lender in the Collateral is, or when it attaches shall be, a
first, prior and perfected security interest. No financing statement covering the Collateral, or
any part of the Collateral (other than any financing statement naming only Lender as the secured
party), is outstanding or is on file in any public office.

          (g) Borrower’s exact legal name is set forth in the first paragraph of this Agreement.

D-9

 

          (h) Absence of Bankruptcy. Borrower has not commenced (within the meaning of Title
11, U.S. Code, and any similar state law for the relief of debtors, a “Bankruptcy Law”) a
voluntary case, consented to the entry of an order for relief against it in an involuntary case, or
consented to the appointment of a receiver or custodian of it or for any part of its property, nor
has a court of competent jurisdiction entered an order or decree under any Bankruptcy Law that is
for relief against it in an involuntary case or appointed a receiver or custodian for Borrower or
any part of its property.

          (i) Borrower is an “eligible contract participant” within the meaning of the Commodities
Futures Modernization Act of 2000.

ARTICLE 7

EVENTS OF DEFAULT: RIGHTS AND REMEDIES

     Section 7.1. Event of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default under this Agreement:

          (a) the failure by Borrower to observe and perform any duty, obligation or covenant required
to be observed or performed by this Agreement or any Supplemental Agreement;

          (b) any representation or warranty on the part of Borrower contained in this Agreement or
repeated and reaffirmed in this Agreement or any Supplemental Agreement proves to be false,
misleading or incorrect when made or deemed made;

          (c) the occurrence of an event which would, with the passage of time or the giving of notice
or both, constitute an Event of Default under the Master Agreement, the Note, the Security
Instrument or any other Loan Document; and

          (d) the occurrence of an Event of Default under the Master Agreement, the Note, the Security
Instrument or any other Loan Document.

     Section 7.2. Remedies on Default. If any Event of Default under this Agreement has
occurred and is continuing:

          (a) At the direction of Lender, Borrower shall deliver all Collateral to Lender or its
designee;

          (b) Lender may, without further notice, exercise all rights, privileges or options pertaining
to the Collateral as if Lender were the absolute owner of such Collateral, upon such terms and
conditions as Lender may determine, all without liability except to account for property actually
received by Lender, and Lender shall have no duty to exercise any of those rights, privileges or
options and shall not be responsible for any failure to do so or delay in so doing; and

          (c) Lender may exercise in respect of the Collateral, in addition to other rights and remedies
provided for in this Agreement or otherwise available to it, all of the rights and remedies of a
secured party under the UCC and also may, without notice except as specified

D-10

 

below, sell the Collateral at public or private sale, at any of the offices of Lender or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as may be commercially
reasonable. Borrower agrees that, to the extent notice of sale shall be required by applicable law,
at least ten (10) days prior notice to Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable notification. Lender
shall not be obligated to make any sale of Collateral regardless of notice of sale having been
given. Lender may adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at the time and place
to which it was so adjourned. In case of any sale by Lender of any of the Collateral, the
Collateral so sold may be retained by Lender until the selling price is paid by the purchaser, but
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 Lender), Lender shall apply the residue
of the proceeds of any sale or sales in such manner as Lender may deem advisable.

The foregoing rights and remedies (i) shall be cumulative and concurrent, (ii) may be pursued
separately, successively or concurrently against Borrower and any other party obligated under the
Obligations, or against the Collateral, or any other security for the Obligations, at the sole
discretion of Lender, (iii) may be exercised as often as occasion therefor shall arise, it being
agreed by Borrower that the exercise or failure to exercise any of same shall not in any 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. Nothing in this Agreement shall require or be construed
to require Lender to accept tender of performance of any of Borrower’s obligations under this
Agreement after the expiration of any time period set forth in this Agreement for the performance
of such obligations and the expiration of any applicable cure periods, if any.

     Section 7.3. Application of Proceeds. Lender shall apply the Collateral or the cash
proceeds actually received from any sale or other disposition of the Collateral in its sole and
absolute discretion as follows:

          (a) to
reimburse Lender for any amounts due to it pursuant to
Section 8.1 of this Agreement
including the expenses of preparing for sale, selling and the like and to reasonable attorneys’
fees and legal expenses incurred by Lender in connection therewith;

          (b) to the repayment of all amounts then due and unpaid on the Obligations in such order of
priority as Lender may determine; and

          (c) to purchase any required Subsequent Interest Rate Cap that meets the requirements of this
Agreement or any of the other Loan Documents.

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,
Borrower shall remain liable for the deficiency, except to the extent that Borrower’s liability for
payment and performance of the Obligations is limited by the terms of the Note and Master
Agreement.

D-11

 

     Section 7.4. No Additional Waiver Implied by One Waiver. If any agreement contained
in this Agreement is breached by Borrower and thereafter waived by Lender in writing, such waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other
breach under this Agreement.

     Section 7.5. Lender Appointed Attorney-in-Fact. Borrower hereby appoints Lender,
through any duly authorized officer of Lender, as Borrower’s attorney-in-fact, with full authority
in the place and stead of Borrower and in the name of Borrower or otherwise, from time to time in
Lender’s discretion during the continuance of an Event of Default, to take any action and to
execute any instrument which Lender may deem necessary or advisable to exercise the rights and
remedies granted in this Agreement, including, to receive, endorse and collect all instruments made
payable to Borrower representing any interest payment, dividend, or other distribution in respect
of the Collateral or any part of the Collateral and to give full discharge for the same. Borrower
agrees that the power of attorney established pursuant to this Section 7.5 shall be deemed
coupled with an interest and shall be irrevocable.

     Section 7.6.
Nature of Lender’s Rights. The right of Lender to the Collateral held for
its benefit under this Agreement shall not be subject to any right of redemption Borrower might
otherwise have and shall not be suspended, discontinued or reduced or terminated for any cause,
including, without limiting the generality of the foregoing, any event constituting force majeure
or any acts or circumstances that may constitute commercial frustration of purpose.

ARTICLE 8

MISCELLANEOUS PROVISIONS

     Section 8.1. Fees, Costs and Expenses; Indemnification. Borrower agrees to reimburse
Lender, on demand, for all out-of-pocket costs and expenses incurred by Lender in connection with
the administration and enforcement of this Agreement or any Supplemental Agreement and agrees to
indemnify and hold harmless Lender from and against any and all losses, costs, claims, damages,
penalties, causes of action, suits, judgments, liabilities and expenses (including, without
limitation, reasonable attorneys’ fees and expenses) incurred by Lender under this Agreement or any
Supplemental Agreement or in connection with this Agreement or any Supplemental Agreement, unless
such liability shall be due to willful misconduct or gross negligence on the part of Lender or its
agents or employees. If Borrower fails to do any act or thing which it has covenanted to do under
this Agreement or any Supplemental Agreement or any representation or warranty on the part of
Borrower contained in this Agreement or any Supplemental Agreement or repeated and reaffirmed in
this Agreement or any Supplemental Agreement is breached, Lender may (but shall not be obligated
to) do the same or cause it to be done or remedy any such breach, and may expend its funds for such
purpose. Any and all amounts so expended by Lender shall be repayable to it by Borrower upon
Lender’s demand. The obligations of Borrower under this Section shall survive the termination of
this Agreement or any Supplemental Agreement and the discharge of the other obligations of Borrower
under this Agreement or any Supplemental Agreement.

     Section 8.2. Termination. This Agreement and each Supplemental Agreement and the
assignments, pledges and security interests created or granted by this Agreement and each
Supplemental Agreement shall create a continuing security interest in the Collateral and shall

D-12

 

automatically terminate without any further action upon the earlier to occur of (i) payment in full
of all amounts due under the Note and all Loan Documents, (ii) the conversion of the Variable
Facility Commitment to a Fixed Facility Commitment pursuant to the terms of the Master Agreement,
or (iii) on the Variable Facility Termination Date, subject to repayment of all Variable Advances.
Upon termination of this Agreement, if requested by Borrower, Lender shall execute and deliver to
Borrower for recording or filing in each office in which any assignment or financing statement
relative to the Collateral or the agreements relating thereto or any part of the Collateral, shall
have been filed or recorded, a termination statement or release under applicable law (including, if
relevant, any financing statement), releasing Lender’s interest in the Collateral and such other
documents and instruments as Borrower may reasonably request, all without recourse to or any
warranty whatsoever by Lender and at the cost and expense of Borrower. Upon termination of this
Agreement, Borrower and Counterparty are hereby authorized to amend, modify or restate the Rate Cap
Agreement as necessary to delete all references to Fannie Mae and Lender and to evidence the
termination of any rights or interests granted to Fannie Mae and Lender therein.

     Section 8.3. 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.

     Section 8.4. Entire Agreement. This Agreement and all Supplemental Agreements created
from time to time constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties to this Agreement with respect to the
subject matter of this Agreement.

     Section 8.5. Successors and Assigns. This Agreement shall inure to the benefit of,
and be enforceable by, Borrower, 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. Borrower shall not assign any of the rights, interests or
obligations under this Agreement without the prior written consent of Lender.

     Section 8.6. Amendment. This Agreement may be amended, changed, waived or modified
only by an instrument in writing executed by the duly authorized representatives of the parties.

     Section 8.7. 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 15.08 of the Master Agreement.

     Section 8.8. Governing Law. The provisions of Section 15.06 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.

D-13

 

     Section 8.9. Severability. If any term or other provision of this Agreement or any
Supplemental 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 and the Supplemental
Agreements 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.

     Section 8.10. 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.

     Section 8.11. Non-Recourse. The provisions of Article 14 of the Master Agreement
hereby are incorporated into this Agreement by this reference.

[Remainder of page intentionally left blank.]

D-14

 

     Borrower 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.

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member	 	 

	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	Its:	 	General Partner	 	 

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 	 	 

S-1

 

	 	 	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

S-2

 

EXHIBIT A

Interest Rate Cap Documents

[TO BE SUPPLIED]

A-1

 

EXHIBIT B

SUPPLEMENTAL INTEREST RATE CAP SECURITY,

PLEDGE AND ASSIGNMENT AGREEMENT

     THIS SUPPLEMENTAL INTEREST RATE CAP SECURITY, PLEDGE AND ASSIGNMENT AGREEMENT
(“Supplemental Agreement”), dated as of                     , 2___, is by and between (i) CMF 15
PORTFOLIO LLC, a Delaware limited liability company, together with their successors and assigns (“Borrower”), and (ii) PNC ARCS LLC, a Delaware
limited liability company, together with its successors and assigns (“Lender”).

     This
Supplemental Agreement supplements the Interest Rate Cap Security, Pledge and Assignment
Agreement dated as of
             , 2009, by and between Borrower and Lender (the “Agreement”).

RECITALS

     A. Borrower and Lender entered into the Agreement pursuant to which Borrower is, subject to
the terms of Section 1.09 of the Master Agreement, required to acquire and maintain or replace, as
appropriate, an Interest Rate Cap at all times during the term of the Variable Facility Commitment
which Variable Advances are Outstanding. Each Interest Rate Cap will be represented by one or
more Interest Rate Cap Documents.

     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 Master
Agreement and Other Loan Documents, dated as of even date with the Master Agreement (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. [Borrower has obtained a new Variable Advance under the Master Agreement]
OR [The Initial Interest Rate Cap has expired] and Borrower is entering into a Subsequent
Interest Rate Cap (as such term is defined in the Agreement) as required by the Master Agreement
and the Agreement.

     D. As security for Borrower’s obligations under the Master Agreement, the Note and the other
Loan Documents, Borrower is entering into this Supplemental Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth in this
Supplemental Agreement and other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by Borrower, the parties agree as follows:

     Section 1. Definitions. All capitalized terms used in this Supplemental Agreement
have the meanings given to those terms in the Agreement or elsewhere in this Supplemental
Agreement unless the context or use clearly indicates a different meaning.

B-1

 

     Section 2. Rules of Construction. The rules of construction set forth in the
Agreement shall apply to this Supplemental Agreement in their entirety, except that in applying
such rules, the term “Supplemental Agreement” shall be substituted for the term
“Agreement”.

     Section 3. Grant of Security Interest. As security for the due, punctual, full and
exact payment, performance or observance by Borrower of: (i) all Obligations, as defined in the
Agreement, whether at stated maturity, by acceleration or otherwise, whether now outstanding or
hereafter arising, and (ii) all other obligations which may be owing to Lender from time to time
under the Loan Documents, Borrower confirms and grants to Fannie Mae a continuing security
interest in and to the Collateral, as defined in the Agreement, as it relates to the Subsequent
Interest Rate Cap described in the attached Interest Rate Cap Documents and all such Interest Rate
Cap Documents, whether now owned or hereafter acquired.

     Section 4. Acquisition of Interest Rate Cap; Delivery of Interest Rate Cap Documents.
Borrower has, on or before the date of this Supplemental Agreement, executed and delivered the
Interest Rate Cap Documents representing the Subsequent Interest Rate Cap to the Counterparty and
has delivered to Fannie Mae fully executed originals of such Interest Rate Cap Documents to be
held under the Agreement as a part of the Collateral. The documents attached to this Supplemental
Agreement as Attachment I are true, complete and correct copies of the Interest Rate Cap
Documents and all amendments thereto, representing the Subsequent Interest Rate Cap, fully
executed by all parties. There is no and shall be no additional security for or any other
arrangements or agreements relating to the Interest Rate Cap or the Interest Rate Cap Documents.

     Section 5. Representations and Warranties. As of the date of this Supplemental
Agreement, Borrower repeats and confirms all representations and warranties made by Borrower in
the Agreement.

     Section 6. Agreement Confirmed. Except as supplemented by this Supplemental
Agreement, Borrower confirms the original Agreement as previously supplemented and amended from
time to time.

     Section 7. Obligations Remain Absolute. Nothing contained in this Supplemental
Agreement shall relieve Borrower of its primary obligation to pay all amounts due in respect of its
obligations under the Loan Documents.

     Section 8. Governing Law. The provisions of Section 8.8 of the Agreement are hereby
incorporated into this Supplemental Agreement by this reference to the fullest extent as if the
text of such provisions were set forth in their entirety herein.

[Remainder of page intentionally left blank; signature page follows]

B-2

 

     Borrower and Lender have caused this Agreement to be signed and sealed, on the date first
written above, by their officers or representatives duly authorized.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a
Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Realty Limited Partnership, a
Delaware limited partnership
	 

	 	Its:
	 	Sole Member

	 	 	 	 	 
	 

	 	By:
	 	Colonial Properties Trust, an
Alabama real estate investment trust
	 

	 	Its:
	 	General Partner

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

B-3

 

	 	 	 	 	 	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability
company	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

 

 

ATTACHMENT I

Interest Rate Cap Documents for Subsequent Interest Rate Cap

[TO BE SUPPLIED]

 

 

EXHIBIT E-1 TO MASTER CREDIT FACILITY AGREEMENT

GUARANTY

     This Guaranty (the “Guaranty”) is made and entered into as of                    , 2009,
by COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Guarantor”), for
the benefit of PNC ARCS LLC, a Delaware limited liability company (“Lender”).

RECITALS

     A. Lender has agreed to execute that certain Master Credit Facility Agreement, dated as of
February 27, 2009, (as amended, supplemented or otherwise modified or amended and restated from
time to time, the “Master Agreement”), pursuant to which, inter alia, Lender has agreed,
subject to the terms, conditions and limitations of the Master Agreement, to loan to Borrower
signatory thereto (the “Borrower”) from time to time Advances (each, an “Advance”
and, collectively, the “Advances”) to be evidenced by various Notes entitled Fixed Facility
Note and Variable Facility Note by Borrower for the benefit of Lender (individually and
collectively, the “Note”).

     B. The repayment of the Advances and all of the other Obligations of Borrower under the Master
Agreement or the other Loan Documents are guaranteed by this Guaranty to the extent of Borrower’s
personal liability as provided in Article 14 of the Master Agreement.

     C. Guarantor owns, directly or indirectly, an ownership interest in Borrower and will receive
a direct and material benefit from the Advances to Borrower.

     D. Lender is willing to make the Advances to Borrower only if Guarantor agrees to enter into
this Guaranty.

     NOW, THEREFORE, in order to induce Lender to make the Advances to Borrower, and in
consideration thereof, Guarantor hereby agrees as follows:

     Section 1. Definitions. All capitalized terms used but not defined in this Guaranty
shall have the meanings ascribed to such terms in the Master Agreement.

     Section 2. Guaranty of Payment and Performance. Guarantor irrevocably, absolutely and
unconditionally guarantees to Lender all of the following
(collectively, the “Guaranteed Obligations”):

          (a) The due and punctual payment of all amounts for which Borrower is personally liable under
Article 14 of the Master Agreement; and

          (b) Subject to the limitations on the personal liability of Borrower in Article 14 of the
Master Agreement and, solely to the extent of Borrower’s personal liability thereunder, the due and
punctual performance of all the Obligations of Borrower under the Master

E-1-1

 

Agreement, and all of the obligations of Borrower under any other Loan Documents from time to time
executed by Borrower.

This Guaranty shall be an unconditional guaranty of payment and performance, and not of collection,
and is in no way conditioned upon any attempt by Lender to pursue or exhaust any remedy against
Borrower. This Guaranty is a continuing guaranty which shall remain in full force and effect until
all of the Guaranteed Obligations have been paid and performed in full; and Guarantor shall not be
released from any Guaranteed Obligations to Lender under this Guaranty as long as any amount
payable by Borrower to Lender, or any Obligation by Borrower, under the Loan Documents is not
performed, satisfied, settled or paid in full.

     Section 3. Form of Payment. All payments under this Guaranty shall be made to Lender
in immediately available funds, without reduction by any recoupment, set-off, counterclaim or
cross-claim against Lender.

     Section 4. Guarantor’s Obligations are Absolute. The obligations of Guarantor under
this Guaranty shall be absolute and unconditional, shall not be subject to any counterclaim,
set-off, recoupment, deduction, or defense based upon any claim Guarantor may have against Lender
or Borrower and shall remain in full force and effect without regard to, and shall not be
released, discharged or terminated or in any other way affected by, any circumstance or condition
(whether or not Guarantor shall have any knowledge or notice thereof), including, without
limitation:

          (a) any amendment or modification of, or extension of time for payment of any of the principal
of, interest on or other amounts payable under the Loan Documents;

          (b) any exercise or non-exercise by Lender of any right, power or remedy under or in respect
of the Loan Documents, or any waiver, consent, forbearance, indulgence or other action, inaction or
omission by Lender under or in respect of the Loan Documents;

          (c) any assignment, sale or other transfer of Borrower’s interest in all or any part of the
real or personal property which at any time constitutes collateral for the payment of the
Guaranteed Obligations, including, without limitation, a conveyance of such property by Borrower to
Lender by deed in lieu of foreclosure;

          (d) any bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation
or other like proceeding involving or affecting Borrower or Lender or their respective properties
or creditors, or any action taken with respect to the Loan Documents by any trustee or receiver of
Borrower or Lender, or by any court, in any such proceeding;

          (e) any invalidity or unenforceability, in whole or in part, of any term or provision of the
Loan Documents or Borrower’s incapacity or lack of authority to enter into the Loan Documents;

          (f) any release, compromise, settlement or discharge with respect to all or any portion of
Borrower’s obligations under the Loan Documents;

E-1-2

 

          (g) any acceptance of additional or substituted collateral for payment of the Guaranteed
Obligations or any release or subordination of any collateral held at any time by Lender as
security for the payment of the Guaranteed Obligations; or

          (h) any resort to Guarantor for payment of all or any portion of the Guaranteed Obligations,
whether or not Lender shall have resorted to any collateral securing the Guaranteed Obligations, if
any, or shall have proceeded to pursue or exhaust its remedies against Borrower (or any other
Person) primarily or secondarily liable for the Guaranteed Obligations.

No exercise, delay in exercise or non-exercise by Lender of any right hereby given it, no dealing
by Lender with Borrower, Guarantor or any other Person, no change, impairment or suspension of any
right or remedy of Lender, and no act or thing which, but for this provision, could act as a
release or exoneration of the liabilities of Guarantor hereunder, shall in any way affect,
decrease, diminish or impair any of the obligations of Guarantor hereunder or give Guarantor or any
other Person any recourse or defense against Lender.

     Section 5. Waiver. Guarantor unconditionally waives the following:

          (a) notice of acceptance of this Guaranty and notice of any of the matters referred to in
Section 4 hereof;

          (b) all notices which may be required by statute, rule of law or otherwise to preserve intact
any rights which Lender may have against Guarantor under this Guaranty, including, without
limitation, any demand, proof or notice of non-payment of any of the principal of, interest on or
other amounts payable under the Loan Documents, and notice of any failure on the part of Borrower
to perform and comply with any covenant, agreement, term or condition of the Loan Documents;

          (c) any right to the enforcement, assertion or exercise of any right, power or remedy
conferred upon Lender in the Loan Documents or otherwise;

          (d) any requirement that Lender act with diligence in enforcing its rights under the Loan
Documents or this Guaranty;

          (e) any right to require Lender to proceed against or exhaust its recourse against Borrower or
any security or collateral held by Lender, if any, at any time for the payment of the Guaranteed
Obligations or to pursue any other remedy in its power before being entitled to payment from
Guarantor under this Guaranty or before proceeding against Guarantor;

          (f) any failure by Lender to file or enforce a claim against the estate (either in
administration, bankruptcy or any other proceeding) of Borrower or any other Person;

          (g) any defense based upon an election of remedies by Lender which destroys or otherwise
impairs the subrogation rights of Guarantor or the right of Guarantor (after payment of the
Guaranteed Obligations) to proceed against Borrower for reimbursement, or both;

          (h) any defense based upon any taking, modification or release of any collateral for the
Guaranteed Obligations, if any, or any failure to perfect any security interest in,

E-1-3

 

or the taking of, or failure to take any other action with respect to, any collateral securing
payment of the Guaranteed Obligations, if any;

          (i) any defense based upon the addition, substitution or release, in whole or in part, of any
Person(s), including, without limitation, another guarantor, primarily or secondarily liable for
or in respect of the Guaranteed Obligations;

          (j) any rights or defenses based upon an offset by Guarantor against any obligation now or
hereafter owed to Guarantor by Borrower; and

          (k) all other notices which may or might be lawfully waived by Guarantor;

it being the intention hereof that Guarantor shall remain liable as principal, to the extent set
forth in this Guaranty, until the payment and performance in full of the Guaranteed Obligations,
notwithstanding any act, omission or thing which might otherwise operate as a legal or equitable
discharge of Guarantor other than the payment and performance in full of the Guaranteed
Obligations. No delay by Lender in exercising any rights and/or powers hereunder or in taking any
action to enforce Borrower’s obligations under the Loan Documents shall operate as a waiver as to
such rights or powers or in any manner prejudice any and all of Lender’s rights and powers
hereunder against Guarantor. The intention of Guarantor under this Guaranty is that, so long as any
of the Guaranteed Obligations remains unsatisfied, the obligations of Guarantor hereunder shall not
be discharged except by payment or performance and then only to the extent of such performance.
Guarantor agrees that Guarantor’s obligations hereunder shall not be affected by any circumstances,
whether or not referred to in this Guaranty, which might constitute a legal or equitable discharge
of a surety or guarantor.

     Section 6. Election of Remedies. This Guaranty may be enforced from time to time, as
often as occasion therefor may arise, and without any requirement that Lender must first pursue or
exhaust any remedies available to it against Borrower under the Loan Documents or against any
other Person or resort to any collateral at any time held by it for performance of the Guaranteed
Obligations, if any, or any other source or means of obtaining payment of any of the Guaranteed
Obligations.

     Section 7. Representations and Warranties of Guarantor. Guarantor hereby represents
and warrants to Lender as follows:

          (a) Due Organization; Qualification. Guarantor 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 Guarantor to perform the Guaranteed Obligations.

          (b) Power and Authority. Guarantor 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 Guaranteed Obligations, and (ii) to execute and deliver this
Guaranty and to carry out the transactions contemplated by this Guaranty.

E-1-4

 

          (c) Due Authorization. The execution, delivery and performance of this Guaranty has
been duly authorized by all necessary action and proceedings by or on behalf of Guarantor, and to
the best of Guarantor’s knowledge, 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 Guarantor as
a condition to the valid execution, delivery and performance by Guarantor of this Guaranty.

          (d) Valid and Binding Obligations. This Guaranty has been duly authorized, executed
and delivered by Guarantor and constitutes the legal, valid and binding obligations of Guarantor,
enforceable against Guarantor in accordance with its 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 Guaranty,
nor the fulfillment of or compliance with the terms and conditions of this Guaranty nor the payment
or performance of the Guaranteed Obligations:

               (i) 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
Guarantor, any of the Mortgaged Properties or any other portion of the Collateral or assets of
Guarantor, or any judgment or order applicable to Guarantor or to which Guarantor is subject;

               (ii) 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 Guarantor’s
Organizational Documents, any indenture, existing agreement or other instrument to which Guarantor
is a party or to which Guarantor, any of the Mortgaged Properties or any other portion of the
Collateral or other assets of Guarantor is subject; or

               (iii) does or will require the consent or approval of any creditor of Guarantor, 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 Guarantor, threatened action, suit, proceeding or investigation, at law or in equity,
before any court, board, body or official of any Governmental Authority or arbitrator which, if
decided adversely to Guarantor, would have, or may reasonably be expected to have, a Material
Adverse Effect on Guarantor. Guarantor is not in default with respect to any order of any
Governmental Authority.

          (g) Solvency. Guarantor is not insolvent and will not be rendered insolvent by the
transaction contemplated by this Guaranty and after giving effect to such transaction, Guarantor
will not be left with an unreasonably small amount of capital with which to engage in its business
or undertakings, nor will Guarantor have incurred, have intended to incur, or believe that it has
incurred, debts beyond its ability to pay such debts as they mature. Guarantor did not receive less
than a reasonably equivalent value in exchange for incurrence of the Guaranteed

E-1-5

 

Obligations. There (i) is no contemplated, pending or, to the best of Guarantor’s knowledge,
threatened bankruptcy, reorganization, receivership, insolvency or like proceeding, whether
voluntary or involuntary, affecting Guarantor and (ii) has been no assertion or exercise of
jurisdiction over Guarantor by any court empowered to exercise bankruptcy powers.

          (h) No Contractual Defaults. There are no defaults by Guarantor or, to the knowledge
of Guarantor, by any other Person under any contract to which Guarantor is a party other than
defaults which do not permit the non-defaulting party to terminate the contract or which do not
have, and are not reasonably be expected to have, a Material Adverse Effect on Guarantor. Neither
Guarantor nor, to the knowledge of Guarantor, 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 material contracts.

          (i) Representations True and Correct. The representations and warranties made by
Guarantor in this Guaranty are true, complete and correct as of the Initial Closing Date and do
not contain any untrue statement 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. Guarantor is in compliance in all material respects with all applicable
provisions of ERISA and has not incurred any liability to the PBGC on a Plan under Title IV of
ERISA. None of the assets of Guarantor constitute plan assets (within the meaning of Department of
Labor Regulation § 2510.3-101) of any employee benefit plan subject to Title I of ERISA.

          (k) Financial Information. The financial statements of Guarantor which have been
furnished to Lender are complete and accurate in all material respects and present fairly the
financial condition of Guarantor, 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 on Guarantor,
and there has not been any material transaction entered into by Guarantor other than transactions
related to the business of owning, managing and operating real estate. Guarantor 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 Lender by Guarantor in connection with this Guaranty or any other Loan Document or in
connection with the consummation of the transactions contemplated hereby and thereby contains any
material misstatement of fact or omits to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not misleading.

          (m) No Conflicts of Interest. To the best knowledge of Guarantor, no member, officer,
agent or employee of 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 Guaranty, the Loan Documents,
or any Mortgaged Property, in any contract for property or materials to be

E-1-6

 

furnished or used in connection with such Mortgaged Property or in any aspect of the transactions
contemplated by the Loan Documents.

          (n) Governmental Approvals. To the best of Guarantor’s knowledge, no Governmental
Approval not already obtained or made is required for the execution and delivery of this Guaranty
or the performance of the terms and provisions hereof by Guarantor.

          (o) Governmental Orders. Guarantor 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. Guarantor acknowledges, represents and warrants that it understands
the nature and structure of the transactions contemplated by this Guaranty 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 Lender or Fannie Mae for any guidance or expertise in analyzing the financial or other
consequences of the transactions contemplated by this Guaranty or any other Loan Document or
otherwise relied on Lender or Fannie Mae in any manner in connection with interpreting, entering
into or otherwise in connection with this Guaranty, any other Loan Document or any of the matters
contemplated hereby or thereby.

          (q) Compliance with Applicable Law. Guarantor 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 on Guarantor.

          (r) Contracts with Affiliates. Guarantor has not entered into and is not a party to
any contract, lease or other agreement with any Affiliate of Guarantor for the provision of any
service, materials or supplies relating to any Mortgaged Property.

     Section 8. Affirmative Covenants of Guarantor. Guarantor agrees and covenants
with Lender that, at all times during the Term of this Guaranty:

          (a) Maintenance of Existence. Guarantor shall maintain its existence and continue
to be a Delaware limited partnership organized under the laws of the state of its organization.
Guarantor 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 materially and adversely affect the validity of, the enforceability of, or the ability to
perform, its obligations under this Guaranty.

          (b) Financial Statements; Accountants’ Reports: Other Information. The
Guarantor shall keep and maintain at all times complete and accurate books of accounts and records
in sufficient detail to correctly reflect all of the Guarantor’s financial transactions and

E-1-7

 

assets. In addition, the Guarantor shall furnish, or cause to be furnished, to Lender the
financial statements required by the Master Agreement.

          (c) Maintain Licenses. Guarantor 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.

          (d) Access to Records; Discussions With Officers and Accountants. To the extent
permitted by law, Guarantor shall permit Lender to take all actions set forth in Section 7.06 of
the Master Agreement.

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

          (e) Inform Lender of Material Events. Guarantor shall promptly, but in any event
within five (5) Business Days, inform Lender in writing of any of the following (and shall deliver
to Lender copies of any related written communications, complaints, orders, judgments and other
documents relating to the following) of which Guarantor has actual knowledge:

               (i) Defaults. The occurrence of any Event of Default or any Potential Event of
Default under any Loan Document;

               (ii) Regulatory Proceedings. Upon obtaining actual knowledge thereof, 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 on
Guarantor;

               (iii) Legal Proceedings. The commencement or threat of, or amendment to, any
proceedings by or against Guarantor 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 on
Guarantor;

               (iv) Bankruptcy Proceedings. The commencement of any proceedings by or against
Guarantor 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;

               (v) Regulatory Supervision or Penalty. The receipt of notice from any Governmental
Authority having jurisdiction over Guarantor that (A) Guarantor is being placed under regulatory
supervision, (B) any license, Permit, charter, membership or registration material to the conduct
of Guarantor’s business or the Mortgaged Properties is to be suspended or revoked or (C) Guarantor
is to cease and desist any practice, procedure or policy employed by Guarantor, 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;

E-1-8

 

               (vi) Material Adverse Effect. The occurrence of any act, omission, change or event
which has a Material Adverse Effect on Guarantor subsequent to the date of the most recent audited
financial statements delivered to Lender pursuant to the Master Agreement;

               (vii) Accounting Changes. Any material change in Guarantor’s accounting policies or
financial reporting practices;

               (viii) 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 Guarantor; and

               (ix) Default on Indebtedness. The occurrence of any event that results in or, with
the giving of notice, if applicable, or the passing of time, or both, would result in (i) any
imminent default, default or waiver of default in respect of any Indebtedness of Guarantor having
an aggregate principal amount in excess of $100,000, (ii) the failure of Guarantor to pay when due
or within any applicable grace period any Indebtedness of Guarantor, or (iii) any Indebtedness of
Guarantor 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.

               (x) Restructuring of Guarantor. Any restructuring or reorganization of any Guarantor.

          (f) ERISA. Guarantor shall at all times remain in compliance in all material respects
with all applicable provisions of ERISA and similar requirements of the PBGC.

          (g) Further Assurances. Guarantor, at the request of Lender, but without incurring
any liability beyond the Guaranteed Obligations, 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 Lender from time
to time may request as reasonably necessary, desirable or proper to carry out more effectively the
purposes of this Guaranty 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.

          (h) Monitoring Compliance. Upon the request of Lender, but without incurring any
liability beyond the Guaranteed Obligations, from time to time, Guarantor shall promptly provide
to Lender such documents, certificates and other information as may be deemed reasonably necessary
to enable Lender to perform its functions under that certain MATS Addendum to Mortgage Selling and
Servicing Contract executed by Lender and Fannie Mae.

          (i) Guarantor shall comply with the provisions of Article 8 of the Master Agreement.

E-1-9

 

     Section 9. Negative Covenants of Guarantor.

          (a) Other Activities. Guarantor shall not violate the provisions of Section 9.01 of the Master
Agreement.

          (b) Material Adverse Effect. Guarantor shall not take or permit any action which could
reasonably be expected to have any Material Adverse Effect on Guarantor.

          (c) Principal Place of Business. Guarantor shall not change its principal place of business or
the location of its books and records, each as set forth in Section 18, without first giving thirty
(30) days’ prior written notice to Lender.

     Section 10. Expenses. Guarantor agrees to pay all reasonable costs and out-of-pocket expenses,
including court costs and expenses and the reasonable fees and disbursements of legal counsel,
incurred by or on behalf of Lender in connection with the enforcement of Guarantor’s obligations
under this Guaranty or the protection of Lender’s rights under this Guaranty. The covenants
contained in this Section shall survive the payment of the Guaranteed Obligations.

     Section 11. Condition of Borrower. Guarantor is fully aware of the financial condition of
Borrower and is executing and delivering this Guaranty based solely upon Guarantor’s own
independent investigation of all matters pertinent hereto and is not relying in any manner upon any
representation or statement made by Lender. Guarantor represents and warrants that Guarantor is in
a position to obtain, and Guarantor hereby assumes full responsibility for obtaining, any
additional information concerning Borrower’s financial condition and any other matters pertinent
hereto as Guarantor may desire and Guarantor is not relying upon or expecting Lender to furnish to
Guarantor any information now or hereafter in Lender’s possession concerning the same or any other
matter. By executing this Guaranty, Guarantor knowingly accepts the full range of risks encompassed
within a contract of this type, which risks Guarantor acknowledges.

     Section 12. Further Assurances. Guarantor agrees at any time and from time to time upon
request by Lender to take, or cause to be taken, any action and to execute and deliver any
additional documents which, in the reasonable opinion of Lender, may be necessary in order to
assure to Lender the full benefits of this Guaranty.

     Section 13. Subordination. Guarantor hereby irrevocably and unconditionally agrees that any
claims, direct or indirect, Guarantor may have by subrogation or other form of reimbursement,
against Borrower or to any security or any interest therein, by virtue of this Guaranty or as a
consequence of any payment made by Guarantor pursuant to this Guaranty, shall be fully subordinated
in time and right of payment to the payment in full of the Guaranteed Obligations and all other
obligations of Guarantor to Lender under this Guaranty.

     Section 14. No Subrogation. Guarantor shall not have any right of subrogation against Borrower
by reason of any payment by Guarantor under this Guaranty until such time as all of the Guaranteed
Obligations have been satisfied in full. Nothing in the foregoing shall affect any claim which any
Guarantor has against Borrower under the terms of the Organizational Documents of Borrower.

E-1-10

 

     Section 15. Insolvency and Liability of Borrower. So long as any of the Guaranteed Obligations
is unpaid and this Guaranty is in effect, and to the extent not prohibited by the applicable
bankruptcy court, Guarantor agrees to file all claims against Borrower in any bankruptcy or other
proceeding in which the filing of claims is required by law in connection with Indebtedness owed by
Borrower to Guarantor and to assign to Lender all rights of Guarantor thereunder up to the lesser
of (i) the amount of such Indebtedness or (ii) the amount of the Guaranteed Obligations. In all
such cases the Person or Persons authorized to pay such claims shall pay to Lender the full amount
thereof to the full extent necessary to pay the Guaranteed Obligations, and Guarantor hereby
assigns to Lender all of Guarantor’s rights to all such payments to which Guarantor would otherwise
be entitled. Notwithstanding the foregoing, and except to the extent that any sums owed by Borrower
to Lender under the Loan Documents shall have been fully satisfied thereby, the liability of
Guarantor hereunder shall in no way be affected by

          (a) the release or discharge of Borrower in any creditors’, receivership, bankruptcy or other
proceedings; or

          (b) the impairment, limitation or modification of the liability of Borrower or the estate of
Borrower in bankruptcy resulting from the operation of any present or future provisions of the
Bankruptcy Code or other statute or from the decision in any court.

     Section 16. Preferences, Fraudulent Conveyances, Etc. If Lender is required to refund, or
voluntarily refunds, any payment received from Borrower because such payment is or may be avoided,
invalidated, declared fraudulent, set aside or determined to be void or voidable as a preference,
fraudulent conveyance, impermissible setoff or a diversion of trust funds under the bankruptcy laws
or for any similar reason, including, without limitation, any judgment, order or decree of any
court or administrative body having jurisdiction over Lender or any of its property, or any
settlement or compromise of any claim effected by Lender with Borrower or other claimant (a
“Rescinded Payment”), then Guarantor’s liability to Lender shall continue in full force and effect,
or Guarantor’s liability to Lender shall be reinstated, as the case may be, with the same effect
and to the same extent as if the Rescinded Payment had not been received by Lender, notwithstanding
the cancellation or termination of any Note or any of the other Loan Documents. In addition,
Guarantor shall pay, or reimburse Lender for, all expenses (including all reasonable attorneys’
fees, court costs and related disbursements) incurred by Lender in the defense of any claim that a
payment received by Lender in respect of all or any part of the Guaranteed Obligations from
Guarantor must be refunded. The provisions of this Section shall survive the termination of this
Guaranty and any satisfaction and discharge of Borrower by virtue of any payment, court order or
any federal or state law.

     Section 17. Waiver. Neither this Guaranty nor any term hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by Lender and Guarantor
expressly referring to this Guaranty and to the provisions so changed or limited. No such waiver
shall extend to or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of Lender in exercising any right
under this Guaranty shall operate as a waiver thereof or otherwise by prejudice thereto.

E-1-11

 

     Section 18. Notices. All notices or other communications hereunder shall be sufficiently given
and shall be deemed given when sent in the manner and to the addresses prescribed by the Master
Agreement.

     Section 19. Assignability by Lender. Lender may, without notice to Guarantor, assign or
transfer the Advances and the Loan Documents, in whole or in part. In such event, each and every
immediate and successive assignee, transferee or holder of all or any part of the Advances and the
Loan Documents shall have the right to enforce this Guaranty, by legal action or otherwise, as
fully as if such assignee, transferee, or holder were by name specifically given such right and
power in this Guaranty. Lender shall have an unimpaired right to enforce this Guaranty for its
benefit as to so much of the Advances and the Loan Documents as Lender has not sold, assigned or
transferred. Guarantor shall not assign this Guaranty, or delegate any of its obligations
hereunder, without the prior written consent of lender.

     Section 20. Guarantor Bound by Judgment Against Borrower. Guarantor shall be conclusively
bound, in any jurisdiction, by the judgment in any action by Lender against Borrower in connection
with the Loan Documents (wherever instituted) as if Guarantor were a party to such action even if
not so joined as a party.

     Section 21. Governing Law. The provisions of Section 15.06 of the Master Agreement (entitled
“Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this
Agreement by this reference to the fullest extent as if the text of such Section were set forth in
its entirety herein.

     Section 22. Invalid Provisions. If any provision of this Guaranty or the application thereof
to Guarantor or any circumstance in any jurisdiction whose laws govern this Guaranty shall, to any
extent, be invalid or unenforceable under any applicable statute, regulation or rule of law, then
such provision shall be deemed inoperative to the extent of such invalidity or unenforceability and
shall be deemed modified to conform to such statute, regulation or rule or law. The remainder of
this Guaranty and the application of any such invalid or unenforceable provision to parties,
jurisdictions or circumstances other than those to whom or to which it is held invalid or
unenforceable, shall not be affected by such invalidity or unenforceability nor shall such
invalidity or unenforceability affect the validity or enforceability of any other provision of this
Guaranty.

     Section 23. General Provisions. This Guaranty shall be binding upon the respective successors
and assigns of Guarantor, and shall inure to the benefit of Lender and its successors and assigns,
including, without limitation, each successive holder of the Notes. The descriptive headings of the
Sections of the Guaranty have been inserted herein for convenience of reference only and shall not
define or limit the provisions hereof.

     Section 24. Obligations Joint and Several. The obligations of Guarantor hereunder shall be
joint and several with the obligations of any other guarantors under this and any other guaranty
and the obligations of Borrower under the Loan Documents.

[Remainder of page intentionally left blank.]

E-1-12

 

     IN WITNESS WHEREOF, Guarantor has signed this Guaranty under seal as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	GUARANTOR:
	 
	 	 	 	 	 	 
	 	 	COLONIAL REALTY LIMITED

PARTNERSHIP, a Delaware limited partnership
	 
	 	 	 	 	 	 
	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

E-1-13

 

EXHIBIT E-2 TO MASTER CREDIT FACILITY AGREEMENT

CONFIRMATION OF GUARANTY

     THIS CONFIRMATION OF GUARANTY is made as of the ___day of                     , 20___, by (i) COLONIAL
REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (“Guarantor”), for the benefit of PNC
ARCS LLC, a Delaware limited liability company (“Lender”).

     Guarantor entered into that certain Guaranty dated as of [Guaranty Date], for the benefit of
Lender (the “Guaranty”) to guaranty the Guaranteed Obligations (as defined in the Guaranty) under
that certain Master Credit Facility Agreement dated as of February 27, 2009, by and between
borrowers signatory thereto (individually and collectively, the “Borrower”) and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”).

     Borrower and Lender have [increased] [expanded] [other] the credit facility under the Master
Agreement and made certain other changes to the terms and conditions of the Master Agreement
pursuant to that certain [                    ] Amendment to Master Agreement dated as of even date herewith
(the “[                    ] Amendment”). As a condition to the entering into the
[                     ] Amendment, Guarantor is required to confirm its obligations under the Guaranty.

     Guarantor hereby (i) acknowledges and consents to the [addition of the Additional Borrower
under the Master Agreement], (ii) acknowledges and consents to the [increase and expansion of the
credit facility and the] other changes and the terms and conditions of the Master Agreement all as
set forth in the [                    ] Amendment, and (iii) confirms to Lender and Fannie Mae that the terms
and provisions of the Guaranty remain in full force and effect.

     Guarantor hereby confirms and ratifies the Loan Documents it has previously executed in
connection with the Master Agreement.

[Remainder of page intentionally left blank.]

E-2-1

 

Dated as of                     , 2___

	 	 	 	 	 	 	 
	 	 	GUARANTOR:
	 
	 	 	 	 	 	 
	 	 	COLONIAL REALTY LIMITED

PARTNERSHIP, a Delaware limited partnership
	 
	 	 	 	 	 	 
	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

E-2-2

 

EXHIBIT F TO MASTER CREDIT FACILITY AGREEMENT

COMPLIANCE CERTIFICATE

     The undersigned (individually and collectively, “Borrower”) hereby certifies to PNC ARCS LLC,
a Delaware limited liability company (“Lender”) and Fannie Mae as follows:

     Section 1. Master Agreement. Borrower is a party to or has joined into that certain Master
Credit Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as
amended, restated, modified or supplemented from time to time, the “Master Agreement”). The rights
of 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. Borrower hereby represents, warrants and covenants to
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.

[Remainder of page intentionally left blank.]

F-1

 

Dated:                    

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 

F-2

 

EXHIBIT G-1 TO MASTER CREDIT FACILITY AGREEMENT

ORGANIZATIONAL CERTIFICATE

(Borrower)

     I, the undersigned,                     , hereby certify as follows:

     Section 1. Position. I am the [Secretary/Officer] of CMF 15 PORTFOLIO LLC, a Delaware limited
liability company (individually and collectively, “Borrower”), and I am authorized to deliver this
Certificate on behalf of Borrower.

     Section 1. Master Agreement. Borrower entered into that certain Master Credit Facility
Agreement, dated as of February 27, 2009, by and between Borrower and PNC ARCS LLC, a Delaware
limited liability company (“Lender”) (as amended, restated or otherwise modified from time to time,
the “Master Agreement”). The rights of 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. Due Authorization of Request. I hereby certify that no action by the directors,
general partners or members, as applicable, of Borrower 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 3. No Changes. Since the date of the most recent Organizational Certificate delivered
to 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 Borrower, except as set forth in Exhibit B to
this Certificate, and Borrower remains duly qualified in the jurisdictions in which it is required
to be qualified under the terms of the Master Agreement.

     Section 4. 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 below:

	 	 	 	 	 	 	 	 	 
	 

	 	Name
	 	 
	 	Title
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

     Section 5. Capitalized Terms. All capitalized terms used but not defined in this Certificate
shall have the meanings ascribed to such terms in the Master Agreement.

[Remainder of page intentionally left blank.]

G-1-1

 

Dated:                    

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	[Secretary/Officer]

 

 

Exhibit A

Resolutions

See attached.

 

 

Exhibit B

Changes to Organizational Documents

 

 

EXHIBIT G-2 TO MASTER CREDIT FACILITY AGREEMENT

ORGANIZATIONAL CERTIFICATE

(Guarantor)

     I, the undersigned,                     , hereby certify as follows:

     Section 1. Position. I am the                      of COLONIAL REALTY LIMITED PARTNERSHIP, a
Delaware limited partnership (“Guarantor”), and I am authorized to deliver this Certificate on
behalf of Guarantor.

     Section 2. Guaranty. Guarantor entered into that certain Guaranty, dated as of February 27,
2009, by and between Guarantor and PNC ARCS LLC, a Delaware limited liability company (“Lender”)
(as amended from time to time, the “Guaranty”). The rights of Lender under the Guaranty have been
assigned to Fannie Mae. This Certificate is issued pursuant to the terms of the Guaranty.

     Section 3. Due Authorization of Request. I hereby certify that no action by the members of
Guarantor 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 Lender, or, if there are none, since the date of the Guaranty, there have been no changes in any
of the Organizational Documents of Guarantor, except as set forth in Exhibit B to this Certificate,
and Guarantor remains in existence and is duly qualified in the jurisdictions in which it is
required to be qualified under the terms of the Guaranty.

     Section 5. Incumbency Certificate. One or more of the persons authorized to execute and
deliver any documents required to be delivered by Guarantor in connection with the Request are as
follows:

	 	 	 	 	 	 	 	 	 
	 

	 	Name
	 	 
	 	Office
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

     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 Credit Facility Agreement between (i)
CMF 15 PORTFOLIO LLC, a Delaware limited liability company, and (ii) Lender dated as of February
27, 2009.

[Remainder of page intentionally left blank.]

G-2-1

 

Dated:                     , 2009

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	[Secretary/Officer]

S-1

 

Exhibit A

Resolutions

 

 

Exhibit B

Changes to Organizational Documents

None.

 

 

EXHIBIT H TO MASTER CREDIT FACILITY AGREEMENT

CONVERSION REQUEST

     THE MASTER AGREEMENT 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 THIRTY (30) BUSINESS DAYS AFTER YOUR
RECEIPT OF THE CONVERSION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE) AND ALL CONDITIONS
CONTAINED IN SECTION 1.08 OF THE MASTER AGREEMENT ARE SATISFIED.

	 	 	 	 	 
	                    ,                     	 	 
	 
	 	 	 	 
	VIA:
	 	 	 	 
	 

	 	 

	 	 

PNC ARCS LLC, a Delaware limited liability company (“Lender”)

                    

                    

                    [LENDER TO CONFIRM]

[Note: Subject to change in the event Lender or its address changes]

			
	Re:	 	CONVERSION REQUEST issued pursuant to that certain Master Credit Facility Agreement, dated as
of February 27, 2009, by and between the undersigned
(“Borrower”) and Lender (as amended, restated or otherwise modified 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. Borrower hereby requests that there occur a conversion of all or a portion
of a Variable Advance to a Fixed Advance and all or a portion of the Variable Facility Commitment
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) Conversion Type:

	 	 	 	___ SARM to Fixed
	 
	 	(c)	 	Prepayment of Variable Advances. (If any) The Variable Advances Outstanding which will be
prepaid on the Closing Date for the conversion are as follows:

H-1

 

	 	 	 	 	 	 	 
	 

	 	Closing Date of Variable Advance:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Maturity Date of Variable Advance:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Amount of Advance:	 	 	 	 
	 

	 	 	 	 

	 	 

(Note: Any Fixed Advances made in conjunction with a conversion of all or a portion of the
Variable Facility Commitment to the Fixed Facility Commitment must be accompanied by an
Advance Request and shall be reviewed in accordance with the terms of the Master
Agreement.)

          (d) Accompanying Documents. All documents, instruments and certificates required to be
delivered pursuant to the conditions contained in Section 1.08 of the Master Agreement, including
(i) the Conversion Documents, as well as (ii) a Compliance Certificate and (iii) an Organizational
Certificate will be delivered on or before the Closing Date.

     Section 2. Capitalized Terms. All capitalized terms used but not defined in this Request shall
have the meanings ascribed to such terms in the Master Agreement.

[Remainder of page intentionally left blank.]

H-2

 

	 	 	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 

S-1

 

EXHIBIT I TO MASTER CREDIT FACILITY AGREEMENT

RATE FORM

     Pursuant to Section 2.01(b) of that certain Master Credit Facility Agreement dated as of
February 27, 2009, (as amended, restated, supplemented or otherwise modified from time to time, the
“Master Agreement”) by and among PNC ARCS LLC, a Delaware limited liability company (“Lender”), the
undersigned (“Borrower”), Borrower hereby requests that Lender issue to it an advance with the
following terms:

	 	 	 	 	 
	 

	 	Designation of Advance
	 	o Fixed Advance
	 
	 	 	 	 
	 

	 	(Check One)
	 	o Variable Advance

     FOR SARM VARIABLE ADVANCE ONLY:

	 	 	 	 	 
	 

	 	Proposed Adjustable Rate
	 	                     %
	 
	 	 	 	 
	 

	 	Advance Amount
	 	$                                        
	 
	 	 	 	 
	 

	 	Term
	 	                     months
	 
	 	 	 	 
	 

	 	Initial 1-/3-Month Libor
	 	                    
	 
	 	 	 	 
	 

	 	Margin
	 	                                         bps
	 
	 	 	 	 
	 

	 	Proposed Initial Adjustable Rate
	 	                    
	 
	 	 	 	 
	 

	 	Breakage Fee Deposit
	 	$                                        
	 
	 	 	 	 
	 

	 	Amortization/Interest Only:
	 	                                        
	 
	 	 	 	 
	 

	 	Closing Date no later than
	 	                    ,                     
	 
	 	 	 	 
	 

	 	Fannie Mae Settlement Date:
	 	                                        

     FOR FIXED ADVANCE ONLY:

	 	 	 	 	 
	 

	 	Proposed Cash Interest Rate
	 	                     %
	 
	 	 	 	 
	 

	 	Advance Amount
	 	$                                        
	 
	 	 	 	 
	 

	 	Term
	 	                     months
	 
	 	 	 	 
	 

	 	Fixed Facility Fee
	 	                                         bps
	 
	 	 	 	 
	 

	 	All-in Note Rate
	 	                     %

I-1

 

	 	 	 	 	 
	 

	 	Amortization Period
	 	                                        
	 
	 	 	 	 
	 

	 	Closing Date no later than
	 	                    ,                     
	 
	 	 	 	 
	 

	 	*Settlement Date
	 	                    ,                     

     Lender will provide Borrower with written confirmation when and if it has obtained a
commitment having the characteristics described above. In the event that the lowest available
Coupon Rate is greater than that specified above, Lender will not proceed without the prior written
authorization of Borrower.

     Borrower certifies that all conditions contained in Article 2 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.

[Remainder of page intentionally left blank.]

I-2

 

Dated:                                         , 2009

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 

	 	Its:
	 	Sole Member

	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Colonial Properties Trust, an Alabama real estate investment trust
	 

	 	 	 	Its:
	 	General Partner

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

I-3

 

Pursuant to Section 2.01(c) of the Master Agreement, Lender hereby confirms that it has obtained a
commitment for the purchase by Fannie Mae of the Note for cash in conformance with the terms noted
above except for the following:

Dated:                     

	 	 	 	 	 	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

Rate Setting Date:  
              
            
             ,  
            
       ,      : 
     AM/PM Eastern Time

I-4

 

EXHIBIT J TO MASTER CREDIT FACILITY AGREEMENT

CERTIFICATE OF BORROWER PARTIES

     All Capitalized Terms used in this Certificate of Borrower Parties have the meanings given to
those terms in the Master Credit Facility Agreement (as amended, restated or otherwise modified
from time to time, the “Master Agreement”) or elsewhere in this Certificate of Borrower
Parties unless the context or use clearly indicates a different meaning.

     In addition to all other representations, warranties and covenants made by (i) CMF 15
PORTFOLIO LLC, a Delaware limited liability company (individually and collectively,
“Borrower”) and (ii) COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
(the “Guarantor”; together with Borrower, individually and together, “Borrower
Parties”) in connection with:

          (a) the making by Lender of the Advance(s) in the amount of $                     pursuant to the
Master Agreement;

          (b) the securing of the Obligations of Borrower and Guarantor under the Master Agreement and
the other Loan Documents by the Security Instruments and any other Security Documents; and

          (c) the purchase by Fannie Mae of the Notes.

     Borrower Parties hereby represent, warrant and covenant to Lender and Fannie Mae, as of
                    , 2009, with respect to themselves, as follows:

     Section 1. Review of Documents. Borrower has reviewed the Note, the Security
Instruments, the Master Agreement, and each of the other Loan Documents and Security Documents, and
Guarantor has reviewed the Guaranty and the Master Agreement.

     Section 2. Purpose of Certificate. This Certificate is delivered to Lender and Fannie
Mae, in order to induce (a) Lender to enter into the Master Agreement and to make the Advances to
Borrower; and (b) Fannie Mae to agree to purchase the Notes.

     Section 3. Due Organization; Qualification.

          (a) Borrower Parties are qualified to transact business and are in good standing in the State
in which each is organized and in each other jurisdiction in which such qualification and/or
standing is necessary to the conduct of its business with respect to the Mortgaged Properties and
where the failure to be so qualified would adversely affect the validity of, the enforceability of,
or the ability of Borrower Parties to perform the Obligations under the Master Agreement and the
other Loan Documents. Borrower is
qualified to transact business and is in good standing in each State in which it owns a
Mortgaged Property.

          (b) Borrower’s and Guarantor’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
15.08 of the Master Agreement.

J-1

 

     Section 4. Power and Authority. Each Borrower Party has the requisite power and
authority (a) 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 under the Master
Agreement or Guaranty, as applicable, and under the other Loan Documents to which it is a party and
(b) to execute and deliver the Master Agreement or Guaranty, as applicable, and the other Loan
Documents and to carry out the transactions contemplated by the Master Agreement and the other Loan
Documents to which it is a party.

     Section 5. Due Authorization. The execution, delivery and performance of the Master
Agreement and the other Loan Documents to which it is a party by each Borrower Party have been duly
authorized by all necessary action and proceedings by or on behalf of each Borrower Party, 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 each Borrower Party as a condition to the valid
execution, delivery and performance by each Borrower Party of the Master Agreement or any of the
other Loan Documents to which it is a party, except filings required to perfect and maintain the
Liens to be granted under the Loan Documents and routine filings to maintain good standing and
Permits.

     Section 6. Valid and Binding Obligations. The Master Agreement and the other Loan
Documents to which it is a party have been duly authorized, executed and delivered by each Borrower
Party and constitute the legal, valid and binding obligations of each Borrower Party, enforceable
against each Borrower Party in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles affecting the enforcement of creditors’ rights generally or by
equitable principles or by the exercise of discretion by any court.

     Section 7. Single-Purpose Status. Except as otherwise expressly approved by Fannie
Mae in writing, Borrower is a Single-Purpose entity and does not own any real property or assets
other than the Mortgaged Properties and does not operate any business other than the management and
operation of the Mortgaged Properties.

     Section 8. No Default. The execution, delivery and performance of the Obligations
imposed on any Borrower Party under the Loan Documents to which it is a party and the Security
Documents will not cause such Borrower Party to be in default under the provisions of any
agreement, judgment or order to which such Borrower Party is a party or by which such Borrower
Party is bound.

     Section 9. Financial Statements. The financial statements of each Borrower Party
furnished to Lender, are, in each case, complete and accurate in all material respects and present
fairly the financial condition of such entities or persons, as of its date in accordance with GAAP,
applied on a consistent basis.

     Section 10. Financial Condition. No adverse change in the financial condition of any
Borrower Party has occurred between the respective dates of the most recent financial statements
which were furnished to Lender relating to such entities or persons and the date hereof which has
had or would reasonably be expected to have a Material Adverse Effect.

J-2

 

     Section 11. No Insolvency or Judgment. Neither Borrower, nor Guarantor, nor any
general partner, nor any managing member of Borrower (if applicable) is currently (a) the subject
or a party as debtor to any completed or pending bankruptcy, reorganization or insolvency
proceeding; or (b) the subject of any judgment in an amount in excess of $300,000 individually
and/or $550,000 in the aggregate which is unpaid, unstayed on appeal, undischarged, unbonded, not
fully insured or undismissed for a period of sixty (60) days.

     Section 12. Taxes Paid. Borrower has filed all federal, state, county and municipal
tax returns required to have been filed by Borrower, and has paid all taxes which have become due
pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no
knowledge of any basis for additional assessment with respect to such taxes. To the best of
Borrower’s knowledge, there are not presently pending any special assessments against any Mortgaged
Property or any part thereof.

     Section 13. Insolvency. Each Borrower Party is not presently insolvent, and the
proposed Advance will not render any Borrower Party insolvent.

     Section 14. Working Capital. After the Advance is made, each Borrower Party will have
sufficient working capital to pay all of such Borrower Party’s outstanding debts as they come due
and payable.

     Section 15. ERISA. Each Borrower Party is in compliance in all material respects with
all applicable provisions of ERISA and has not incurred any liability to the PBGC on a Plan under
Title IV of ERISA. None of the assets of Borrower constitute plan assets (within the meaning of
Department of Labor Regulation § 2510.3-101) of any employee benefit plan subject to Title I of
ERISA.

     Section 16. Governmental Approvals; Governmental Orders. No Governmental Approval not
already obtained or made is required for the execution and delivery of the Master Agreement or any
other Loan Document or the performance of the terms and provisions thereof by Borrower. 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 the terms and provisions of the Master Agreement or any other Loan Document, 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.

     Section 17. Impositions. Borrower has paid all of the following items which have
become due and payable regarding any Mortgaged Property (or is in good faith contesting same):
taxes, government assessments; insurance premiums; water, sewer and municipal charges; leasehold
payments; ground rents; all parties furnishing labor and materials and, except for such liens or
claims insured against by the policy of title insurance to be issued in connection with the Master
Agreement, there are no mechanics’, laborers’ or materialmen’s liens or claims outstanding for
work, labor or materials affecting any Mortgaged Property, whether prior to, equal with or subordinate to the lien
of any Security Instrument; and any other charges affecting any Mortgaged Property, except for liens
securing unpaid taxes and statutory liens for amounts not yet due and payable or being
contested in good faith.

J-3

 

     Section 18. Compliance with Applicable Laws. 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 Borrower nor, to
the knowledge of 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 Borrower otherwise aware of
any such pending actions or proceedings.

     Section 19. Leases.

          (a) Borrower has delivered to Lender a true and correct copy of the current form apartment
lease for each Mortgaged Property, and each Lease with respect to such Mortgaged Property that
Borrower has entered into is in the form thereof, with no material modifications thereto, except as
previously disclosed in writing to 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 Borrower
Parties upon not more than thirty (30) days’ written notice, (ii) provides for prepayment of more
than two (2) months rent, or (iii) was entered into in other than the ordinary course of business.

          (b) 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 the Master
Agreement, Borrower is the owner and holder of the landlord’s interest under each of the Leases 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.

          (c) Each Lease constitutes the legal, valid and binding obligation of Borrower and, to the
knowledge of 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
Lender, no notice of any default by Borrower which remains uncured has been sent by any tenant
under any such Lease, other than defaults which do not have, and are not reasonably expected to
have, a Material Adverse Effect on the Mortgaged Property subject to the Lease.

          (d) 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.

     Section 20. Non-Residential Leases.

          (a) Not more than twenty percent (20%) of the net rentable space of any Mortgaged Property is
being used for non-residential purposes and copies of all commercial leases, if any, have been
delivered to Lender.

          (b) Neither Borrower, nor any general partner of Borrower, nor any Guarantor, nor any
individual having a ten percent (10%) or greater interest in Borrower is an

J-4

 

affiliate or otherwise related to (i) the lessee under any leases for laundry equipment or (ii) the
lessee or provider of any telecommunications, television or similar systems or services on or about
any Mortgaged Property.

          (c) Any lease for laundry services at each Mortgaged Property has been supplied to Lender and
either: (i) currently contains language which by its terms subordinates the interest of the lessee
thereunder to Lender’s lien, (ii) is not below market rent and provides for termination by Borrower
for cause; or (iii) has been subordinated to the terms of the Security Instrument. Borrower further
certifies that any future leases of laundry space at any Property (or any renewals of the current
lease) shall either include language, acceptable to Lender, subordinating the interest of the
lessee thereunder to the lien of the Security Instrument or shall be at or above market rent and
contain provisions for termination for cause.

     Section 21. Condition of the Mortgaged Properties. Except as disclosed in any third
party report delivered to Lender prior to the date on which any Mortgaged Property is added to the
Collateral Pool, or otherwise disclosed in writing by Borrower to 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 Borrower,
latent or otherwise) and 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 by Borrower 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 which has not been satisfied. 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 Lender. There are no proceedings pending for partial or total condemnation
of any Mortgaged Property except as disclosed in writing to Lender.

     Section 22. Operations and Maintenance Plan. Borrower agrees that it has adopted any
operations and maintenance plan for asbestos, lead-based paint, mold or other environmental concern
that Lender has required in writing.

     Section 23. Representations and Warranties True. Each and every representation and
warranty contained herein will remain true and correct at all times from the date hereof until all
Obligations have been performed in full in accordance with the terms of the Loan Documents and the
Security Documents. In the event that any representation or warranty contained herein becomes
untrue, in whole or in part, after the date hereof, Borrower will so advise Lender and Fannie Mae
in writing immediately.

     Section 24. Ratification. Borrower covenants that it shall, promptly upon the request
of Lender or Fannie Mae ratify and affirm this Certificate of Borrower in writing, as of such date
or dates as such Person shall specify.

J-5

 

     Section 25. Survival. The representations, warranties and covenants set forth in this
Certificate of Borrower shall survive the execution and delivery of the Loan Documents, regardless
of any investigation made by Lender or Fannie Mae.

     Section 26. OFAC Requirements.

          (a) Representations and Warranties. Borrower, Guarantor, any general partner of Borrower or
any managing member of Borrower, as applicable, Mortgaged Property manager and, to the best of
Borrower’s knowledge, after having made reasonable inquiry, (a) each Person owning a direct or
indirect interest of twenty percent (20%) or more in Borrower, Guarantor, any general partner of
Borrower or any managing member of Borrower, the Mortgaged Property manager (if the Mortgaged
Property manager is an affiliate of Borrower), and (b) each commercial tenant at the Mortgaged
Property: (i) is not currently identified on OFAC List, and (ii) is not a Person with whom a
citizen of the United States is prohibited to engage in transactions by any trade embargo, economic
sanction, or other prohibition of United States law, regulation, or Executive Order of the
President of the United States. Borrower and Guarantor shall confirm this representation and
warranty in writing on an annual basis.

          (b) Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. Each
Borrower Party shall comply with all Requirements of Law relating to money laundering,
anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Without limiting
the foregoing, no Borrower Party shall take any action, or permit any action to be taken, that
would cause any Borrower Party’s representations and warranties, as set forth in subsection (a)
above, to become untrue or inaccurate at any time during the term of the Advance. Each Borrower
Party shall notify Lender promptly of Borrower Party’s actual knowledge that such representations
and warranties may no longer be accurate or that any other violation of the foregoing Requirements
of Law has occurred or is being investigated by Governmental Authorities. In connection with such
an event, each Borrower Party shall comply with all Requirements of Law and directives of
Governmental Authorities and, at Lender’s request, provide to Lender copies of all notices, reports
and other communications exchanged with, or received from, Governmental Authorities relating to
such event. Each Borrower Party shall also reimburse Lender for any expense incurred by Lender in
evaluating the effect of such an event on the Advance and Lender’s interest in the collateral for
the Advance, in obtaining any necessary license from Governmental Authorities as may be necessary
for Lender to enforce its rights under the Loan Documents, and in complying with all Requirements
of Law applicable to Lender as the result of the existence of such an event and for any penalties
or fines imposed upon Lender as a result thereof.

          (c) Definitions. As used in this Section 26, certain defined terms shall have the following
meanings:

               (1) “Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any Person exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to
such government having jurisdiction over Borrower or the Mortgaged Properties.

J-6

 

               (2) “OFAC List” means the list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of
Foreign Assets Control and any other similar list maintained by the U.S. Treasury Department,
Office of Foreign Assets Control pursuant to any Requirements of Law, including, without
limitation, trade embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List is currently accessible through the internet
website www.treas.gov/ofac/t11sdn.pdf.

               (3) “Person” means an individual, partnership, limited partnership, corporation,
limited liability company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.

               (4) “Requirements of Law” means (a) the organizational documents of an entity, and (b)
any law, regulation, ordinance, code, decree, treaty, ruling or determination of an arbitrator,
court or other Governmental Authority, or any Executive Order issued by the President of the United
States, in each case applicable to or binding upon such Person or to which such Person, any of its
property or the conduct of its business is subject including, without limitation, laws, ordinances
and regulations pertaining to the zoning, occupancy and subdivision of real property.

     Section 27. Joint and Several. The provisions of Article 14 of the Master Agreement
hereby are incorporated into this Certificate of Borrower Parties by this reference.

[Remainder of page intentionally left blank.]

J-7

 

IN WITNESS WHEREOF, Borrower Parties have executed this Certificate of Borrower Parties as of the
day and year first above written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 

	 	Its:
	 	Sole Member

	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Colonial Properties Trust, an Alabama real estate investment trust
	 

	 	 	 	Its:
	 	General Partner

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

J-8

 

	 	 	 	 	 
	 	 	GUARANTOR:
	 
	 	 	 	 
	 	 	COLONIAL REALTY LIMITED
	 	 	PARTNERSHIP, a Delaware limited partnership
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Properties Trust, an Alabama real estate investment trust
	 

	 	Its:
	 	General Partner

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

J-9

 

EXHIBIT K TO MASTER CREDIT FACILITY AGREEMENT

ADVANCE REQUEST

[SELECT THE APPROPRIATE LANGUAGE:]

[INITIAL ADVANCE:

THE MASTER AGREEMENT REQUIRES YOU TO MAKE THE REQUESTED INITIAL ADVANCE, IF ALL CONDITIONS
CONTAINED IN SECTION 2.03(a) AND 5.02 OF THE MASTER AGREEMENT ARE SATISFIED, AT A CLOSING TO BE
HELD ON THE INITIAL CLOSING DATE.]

[FUTURE ADVANCE:

THE MASTER AGREEMENT REQUIRES YOU TO MAKE THE REQUESTED FUTURE ADVANCE, IF ALL CONDITIONS CONTAINED
IN SECTION 2.03(b) AND 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, WHICH DATE SHALL BE NOT MORE THAN
THREE (3) BUSINESS DAYS AFTER OUR RECEIPT OF THE CONFIRMED RATE FORM (OR ON SUCH OTHER DATE AS WE
MAY AGREE).]

                                        ,                     

VIA:                                         

PNC ARCS LLC, a Delaware limited liability company (“Lender”)

                                        

                                        

                                         [LENDER TO CONFIRM]

[Note: Subject to change in the event Lender or its address changes]

			
	Re:	 	ADVANCE REQUEST issued pursuant to that certain Master Credit Facility Agreement, dated as of
February 27, 2009, by and between the undersigned (“Borrower”), and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes an Advance Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. Borrower hereby requests that 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:

K-1

 

     (a) Amount. The amount of the [Initial] [Future] Advance shall be
$                                        .

	 	(b)	 	Designation of Facility. The [Initial]
[Future] Advance is a: [Check one]

                     Fixed
Advance
	 
	 	 	 	                               Standard Yield Maintenance 
	 
	 	 	 	                               Fixed + 1
	 
	 	 	 	                     Variable Advance 
	 
	 	 	 	                              SARM

	 	(c)	 	Maturity Date. The Maturity Date of the Advance is as follows:                     .
	 
	 	(d)	 	Interest Only/Amortization Period.                     .
	 
	 	(e)	 	Accompanying Documents. All documents, instruments and certificates required to be
delivered pursuant to the conditions contained in Article 5 of the Master Agreement,
including (i) a confirmed Rate Form, (ii) a Variable Facility Note, (iii) a Fixed Facility
Note (for Fixed Advances only), (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 Lender, in accordance with
the terms of the Master Agreement.

Currently Available Fixed Facility Commitment

Currently Available Variable Facility Commitment

Proposed Amount Drawn on Fixed Facility Commitment

Remaining Fixed Facility Commitment after Proposed Draw

Proposed Amount Drawn on Variable Facility Commitment

Remaining Variable Facility Commitment after Proposed Draw

     For these purposes, the terms

	 	(a)	 	“Available Fixed Facility Commitment” means, at any time, the maximum amount of Fixed
Facility Advances which could be issued and outstanding in compliance with the requirements of the
Master Agreement; and
	 
	 	(b)	 	“Available Variable Facility Commitment” means, at any time, the maximum amount of
Variable Advances which could be issued and outstanding in compliance with the requirements of the
Master Agreement.

K-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.

[Remainder of page intentionally left blank.]

K-3

 

	 	 	 	 	 
	 

	 	Sincerely,	 	 
	 
	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Realty Limited Partnership, a Delaware limited partnership 
	 

	 	Its:
	 	Sole Member

	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Colonial Properties Trust, an Alabama real estate investment trust
	 

	 	 	 	Its:
	 	General Partner

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

S-1

 

EXHIBIT L TO MASTER CREDIT FACILITY AGREEMENT

REQUEST

(Addition/Release/Substitution)

                    ,                     

PNC ARCS LLC, a Delaware limited liability company (“Lender”)

                                        

                                        

                                        [LENDER TO CONFIRM]

[Note: Subject to change in the event Lender or its address changes]

			
	Re:	 	REQUEST issued pursuant to that certain Master Credit Facility Agreement, dated as of February
27, 2009, by and between the undersigned (“Borrower”) and Lender (as amended, restated or
otherwise modified from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes [an Addition] [a Release] [a Substitution] Request pursuant to the terms of the
above-referenced Master Agreement.

[SELECT APPROPRIATE SECTIONS]

     Section 1. Addition Request. Borrower hereby requests that the Multifamily
Residential Property described in this Request be added to the Collateral Pool [in connection with
a substitution of Collateral] in accordance with the terms of the Master Agreement. Following is
the information required by the Master Agreement with respect to this Request:

          (a) Property Description Package. Attached to this Request is the information and
documents relating to the proposed Additional Mortgaged Property required by Lender and the Master
Agreement;

          (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 10.03(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 3.02(c) and 5.04] [or in connection with
a Substitution, Sections 3.05(f) and 5.06] of the Master Agreement will be delivered on or before
the Closing Date.

     Section 2. [Substitution Fee][Addition Fee]. If Lender consents to the addition of the
proposed Additional Mortgaged Property to the Collateral Pool, and Borrower elects to add the
Additional Mortgaged Property to the Collateral Pool, Borrower shall pay the [Substitution

L-1

 

Fee] [Addition Fee] to Lender as one of the conditions to the closing of the Additional Mortgaged
Property.

     OR

     Section 1. Release Request. Borrower hereby requests that the 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 Release Property. The name, address and location (county and state)
of the Mortgaged Property, or other designation of the proposed Release Property is as follows:

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Location:	 	 	 	 
	 

	 	 	 	 

	 	 

          (b) Accompanying Documents. All documents, instruments and certificates required to
be delivered pursuant to the conditions contained in Section 3.04(b) and Section 5.05 of the Master
Agreement will be delivered on or before the Closing Date.

     Section 2. Release Price and Release Fee. Borrower shall pay the Release Price, if
applicable, and the Release Fee as a condition to the closing of the release of the Release
Property from the Collateral Pool.

[Remainder of page intentionally left blank.]

L-2

 

	 	 	 	 	 
	 	 	Sincerely,
	 
	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 
	 

	 	By:
	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 

	 	Its:
	 	Sole Member

	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Colonial Properties Trust, an Alabama real estate investment trust
	 

	 	 	 	Its:
	 	General Partner

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 

L-3

 

EXHIBIT M TO 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 (i) CMF 15 PORTFOLIO LLC, a Delaware limited liability
company (individually and collectively, “Borrower”), for the benefit of PNC ARCS LLC, a
Delaware limited liability company (“Lender”).

RECITALS

     A. Borrower and Lender are parties to that certain Master Credit Facility Agreement, dated as
of February 27, 2009, (as amended, restated or otherwise modified from time to time, the
“Master Agreement”).

     B. All of 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 Master Credit
Facility Agreement and other Loan Documents, dated as of February 27, 2009, (the
“Assignment”). Fannie Mae has not assumed any of the obligations of Lender under the Master
Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated Lender as
the servicer of the Advances contemplated by the Master Agreement.

     C. Borrower has delivered to Lender a Release Request pursuant to the Master Agreement to
release a Release Property from the Collateral Pool.

     D. Lender has consented to the 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 Release Property from the Collateral Pool.

     NOW, THEREFORE, Borrower, in consideration of Lender’s consent to the release of the Release
Property from the Collateral Pool and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Confirmation of Obligations. Borrower confirms that, except with respect
to the Release Property, none of its respective obligations under the Master Agreement and the Loan
Documents is affected by the release of the Release Property from the Collateral Pool, and each of
its respective obligations under the Master Agreement and the Loan Documents shall remain in full
force and effect, and it shall be
fully liable for the observance of all such obligations, notwithstanding the release of the
Release Property from the Collateral Pool.

     Section 2. Beneficiaries. This Confirmation of Obligations is made for the express
benefit of both Lender and Fannie Mae.

M-1

 

     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.

[Remainder of page intentionally left blank.]

M-2

 

     IN WITNESS WHEREOF, the parties hereto have executed the Confirmation of Obligations as an
instrument under seal as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 

M-3

 

	 	 	 	 	 	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

M-4

 

EXHIBIT N TO MASTER CREDIT FACILITY AGREEMENT

CREDIT FACILITY TERMINATION REQUEST

     THE MASTER AGREEMENT 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 THIRTY (30) BUSINESS DAYS AFTER THE YOUR RECEIPT
OF THE CREDIT FACILITY TERMINATION REQUEST (OR ON SUCH OTHER DATE AS WE MAY AGREE), AS LONG AS ALL
CONDITIONS CONTAINED IN SECTION 4.02(b) AND 5.08 OF THE MASTER AGREEMENT ARE SATISFIED. REFERENCE
IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF LENDER‘S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

           
                     
        ,      
              

VIA:         
                     
                    
          

PNC ARCS LLC, a Delaware limited liability company (“Lender”)

         
                    
                   
            

            
                     
                     
      

            
                     
                     
      

[Note: Subject to change in the event Lender or its address changes]

	 	 	 
	Re:

	 	CREDIT FACILITY TERMINATION REQUEST issued pursuant to that certain Master Credit Facility
Agreement, dated as of February 27, 2009, by and among the undersigned
(“Borrower”) and Lender (as amended, restated or otherwise modified 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. 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 4.02(b) and 5.08 of the Master Agreement will be delivered on or before the Closing Date.

     Section 2. Prepayments. Borrower shall, in accordance with the terms of the Master
Agreement, pay in full all Notes Outstanding, the Release Fee, and any required
prepayment premiums as a condition to the termination of the Master Agreement and the Credit
Facility.

N-1

 

     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,	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a Delaware limited partnership
	 	 	Its:	 	Sole Member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an Alabama real estate investment trust
	 	 	 	 	Its:	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 

N-2

 

EXHIBIT O TO MASTER CREDIT FACILITY AGREEMENT

FORM OF LETTER OF CREDIT

[Bank’s letterhead]

IRREVOCABLE LETTER OF CREDIT NO.                     

DATE

Fannie Mae

3900 Wisconsin Avenue, N.W.

Washington, DC 20016-2899

Ladies and Gentlemen:

For the account of                                                             
[Insert name of account party/customer], we hereby
open in your favor our Irrevocable Letter of Credit No.                      (“Credit”) for an amount not
exceeding a total of U.S. $                    , effective immediately and expiring on                     ,
20___. 
                    

Funds under this Credit are available to you against a sight draft(s) on us completed by you or
                                         [Insert Lender’s name] on your behalf, completed in substantially the
form attached as Exhibit 1, for all or any part of this Credit.

We will promptly honor all drafts drawn in compliance with the terms of this Credit if received on
or before the expiration date at     
            
            
             
           
           
            
             
            
           
            
           
            
             
             
               
                 
            
            
             
           
             
             
          [Insert Bank’s address].

Drafts presented at our office at the address set forth above no later than 10:00 a.m. shall be
honored on the date of presentation, by payment in accordance with your payment instructions that
accompany each such draft. If requested by you, payment under this Credit may be made by wire
transfer of immediately available funds to your account as specified in the draft (whether executed
by you or                                          [Insert Lender’s name]), or by deposit of same days funds in
your designated account that you maintain with us.

This Credit shall be governed by and subject to the Uniform Customs and Practice for Documentary
Credits (2007 revision), International Chamber of Commerce Publication No. 600 (“UCP 600”), and to
the extent not inconsistent with the UCP 600, laws of the State of                     .

Sincerely,

[Insert Bank’s name]

O-1

 

 

	 	 	 	 	 
	 

	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

SIGHT DRAFT

[Insert Issuing Bank’s name and address]

                    , 20__

Pay on demand to Fannie Mae the sum of U.S. $                                        . This draft is drawn under
your Irrevocable Letter of Credit No.                     .

Fannie Mae

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

-OR-

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 	 	 
	[Insert Lender’s name]

	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Title:EX-10.2

Exhibit 10.2

FIXED FACILITY NOTE 

(Standard Maturity)

			
	 	 	 
	US $259,000,000.00
	 	February 27, 2009

     FOR VALUE RECEIVED, the undersigned (individually and collectively, “Borrower”)
jointly and severally (if more than one) promises to pay to the order of PNC ARCS LLC, a Delaware
limited liability company (“Lender”) the principal sum of TWO HUNDRED FIFTY-NINE MILLION
AND NO/100 DOLLARS (US $259,000,000.00), with interest accruing on the unpaid principal balance
from the Disbursement Date until fully paid at the Interest Rate.

     This Note is executed and delivered by Borrower pursuant to that certain Master Credit
Facility Agreement, dated as of February 27, 2009, by and between Borrower and Lender (as amended,
restated or otherwise modified from time to time, the “Master Agreement”), to evidence the
obligation of Borrower to repay a Fixed 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 Advance evidenced hereby is made.

     1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used in this
Note, the following definitions shall apply:

Advance: The advance evidenced by this Note.

Advance Term: 120 months.

Amortization Period: N/A

Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.

Debt Service Amounts: Amounts payable under this Note, the Security Instrument or
any other Loan Document.

Default Rate: A rate equal to the lesser of 4 percentage points above the Interest
Rate or the maximum interest rate which may be collected from Borrower under
applicable law.

Disbursement Date: The date of disbursement of Advance proceeds hereunder.

First Payment Date: The first day of April, 2009.

Indebtedness: The principal of, interest on, or any other amounts due at any time
under, this Note, the Security Instrument or any other Loan Document, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security Instrument.

1

 

Interest Rate: The annual rate of six and seven one-hundredths percent (6.07%).

Lender: The holder of this Note.

Maturity Date: The first day of March, 2019, or any earlier date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or
otherwise.

Security Instrument: Individually and collectively, various multifamily mortgages,
deeds to secure debt or deeds of trust described in the Master Agreement.

Yield Maintenance Period Term or Prepayment Premium Period Term: 114 months.

Yield Maintenance Period End Date or Prepayment Premium Period End Date: The last
day of August, 2018.

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 Instrument.

     2. Address for Payment. All payments due under this Note shall be payable at
PNC ARCS LLC, 26901 Agoura Road, Suite 200, Calabasas Hills, California 91301, 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) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

     (b) Interest Computation. Interest under this Note shall be computed on the basis of (check
one only):

	 	o	 	30/360. A 360-day year consisting of twelve 30-day months.
	 
	 	þ	 	Actual/360. A 360-day year. The amount of each monthly payment made by
Borrower pursuant to Paragraph 3(c) below will be
based on the actual number of calendar days during such month and shall be
calculated by multiplying the unpaid principal balance of this Note by the per
annum Interest Rate, dividing the product by three hundred sixty (360) and
multiplying the quotient by the actual number of days elapsed during the month.
Borrower understands that the amount of interest for each month

2

 

	 	 	 	will vary depending on the actual number of calendar days during such
month.

     (c) Monthly Installments (check one only):

	 	o	 	30/360. [Select only if 30/360 is selected in Paragraph 3(b) above.] If
interest accrues based on a 30/360 interest computation, then consecutive
monthly installments of interest only, each in the amount of
                                                             Dollars (US $
                                        ), shall be payable on the First Payment
Date and on the first day of every month thereafter, until the entire unpaid
principal balance evidenced by this Note is fully paid. The entire principal
balance and accrued but unpaid interest shall be due and payable on 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.
	 
	 	þ	 	Actual/360. [Select only if Actual/360 is selected in Paragraph 3(b)
above.] If interest accrues based on an Actual/360 interest computation, the
amount of One Million Three Hundred Ten Thousand One Hundred Eight and 33/100
Dollars (US $1,310,108.33) shall be payable on the First Payment Date and
thereafter consecutive monthly installments of interest only, shall be payable
as follows:

	 	(1)	 	One Million Two Hundred Twenty-Two Thousand Seven Hundred Sixty-Seven
and 78/100 Dollars (US $1,222,767.78), shall be payable on the first day
of each month during the term hereof which follows a 28-day month;
	 
	 	(2)	 	One Million Two Hundred Sixty-Six Thousand Four Hundred Thirty-Eight
and 06/100 Dollars (US $1,266,438.06), shall be payable on the first day
of each month during the term hereof which follows a 29-day month,
	 
	 	(3)	 	One Million Three Hundred Ten Thousand One Hundred Eight and 33/100
Dollars (US $1,310,108.33), shall be payable on the first day of each
month during the term hereof which follows a 30-day month, or
	 
	 	(4)	 	One Million Three Hundred Fifty-Three Thousand Seven Hundred
Seventy-Eight and 61/100 Dollars (US $1,353,778.61), shall be payable on
the first day of each month during the term hereof which follows a 31-day
month,

	 	 	 	until the entire unpaid principal balance evidenced by this Note is fully
paid. The entire principal balance and accrued but unpaid interest shall
be

3

 

	 	 	 	due and payable on 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.

     (d) Payments Before Due Date. 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.

     (e) Accrued Interest. Any accrued interest remaining past due for thirty (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. Any reference herein to “accrued interest” shall refer to
accrued interest which has not become part of the unpaid principal balance. Any amount added to
principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates
specified in this Note and shall be payable with such interest upon demand by Lender and absent
such demand, as provided in this Note for the payment of principal and interest.

     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 Instrument, and
reference is made to the Security Instrument 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 Instrument 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 Advance 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

4

 

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 thirty (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 the Default Rate. 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 Advance, that, during the time that any monthly installment or payment
under this Note is delinquent for more than thirty (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 thirty (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 advance.

     9. Limits on Personal Liability. The provisions of Article 14 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) Subject to the terms of the Master Agreement, Borrower may voluntarily prepay all (or a
portion) of the unpaid principal balance of this Note only on the last calendar day of a calendar
month (the “Last Day of the Month”) and only if Borrower has complied with all of the
following:

	 	(i)	 	Borrower must give Lender at least thirty (30) days (if given via U.S.
Postal Service) or twenty (20) days (if given via facsimile, email or
overnight courier), but not more than sixty (60) days, prior written
notice of Borrower’s intention to make a
prepayment (the “Prepayment Notice”). The Prepayment Notice shall
be given in writing (via facsimile, email, U.S. Postal Service or
overnight courier) and addressed to Lender. The Prepayment Notice shall
include, at a minimum, the Business Day upon which

5

 

	 	 	 	Borrower intends to make the prepayment (the “Intended
Prepayment Date”).
	 
	 	(ii)	 	Borrower acknowledges that the Lender is not required to accept any
voluntary prepayment of this Note on any day other than the Last Day of
the Month even if Borrower has given a Prepayment Notice with an Intended
Prepayment Date other than the Last Day of the Month or if the Last Day of
the Month is not a Business Day. Therefore, even if Lender accepts a
voluntary prepayment on any day other than the Last Day of the 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 Day of the Month shall be deemed to have been received by
Lender on the Last Day of the Month and any prepayment calculation will
include interest to and including the Last Day of the Month in which such
prepayment occurs. If the
Last Day of the Month is not a Business Day, then Borrower must
make the payment on the Business Day immediately preceding the
Last Day of the Month.
	 
	 	(iii)	 	Any prepayment shall be made by paying (A) the amount of principal
being prepaid, (B) all accrued interest (calculated to the Last Day of the
Month), (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 (A) within
five (5) Business Days after the Intended Prepayment Date or (B) 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 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, (i) all accrued interest and all other sums
due Lender under this Note and the other Loan Documents, and (ii) 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.

6

 

     (b) Notwithstanding the provisions of Paragraph 10(a), no prepayment premium shall be payable
(1) with respect to any prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph
(c) of Schedule A.

     (c) Schedule A is hereby incorporated by reference into this Note.

     (d) Any required prepayment of less than the entire unpaid principal balance of this Note
shall not extend or postpone the due date of any subsequent monthly installments or change the
amount of such installments, unless Lender agrees otherwise in writing.

     (e) Borrower recognizes that any prepayment of the unpaid principal balance of this Note,
whether voluntary or involuntary or resulting from a default by Borrower, will result in Lender’s
incurring loss, including reinvestment loss, additional expense and frustration or impairment of
Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is extremely
difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges
and agrees that the formula for calculating prepayment premiums set forth on Schedule A represents
a reasonable estimate of the damages Lender will incur because of a prepayment.

     (f) Borrower further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the Advance 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.

     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 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

7

 

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. Advance 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
Advance 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 Advance 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.

     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
15.06 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 15.08 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

8

 

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. No Reborrowing. Advances borrowed under this Note may not be reborrowed.

     22. Fixed Advance. This Note is issued to evidence a Fixed Advance made in accordance with
the terms of the Master Agreement.

     23. 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.]

9

 

     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.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CMF 15 Portfolio LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Colonial Realty Limited Partnership, a
 Delaware limited partnership	 	 
	 	 	Its:	 	Sole Member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Colonial Properties Trust, an
 Alabama real estate investment trust	 	 
	 	 	 	 	Its:	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jerry A. Brewer
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Jerry A. Brewer	 	 
	 

	 	 	 	 	 	Title:	 	Executive Vice President	 	 

S-1

 

     Pay to the order of                                         , without recourse.

	 	 	 	 	 	 	 
	 	 	LENDER:	 	 
	 
	 	 	 	 	 	 
	 	 	PNC ARCS LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Tim White
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Tim White	 	 
	 

	 	Title:
	 	President	 	 

S-2

 

ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	þ	 	Schedule A           Prepayment Premium (required)
	 
	 	o	 	Schedule B           Modifications to Multifamily Note

 

 

     SCHEDULE A

PREPAYMENT PREMIUM

[FOR STANDARD YIELD MAINTENANCE –

OTHER PREPAYMENT OPTIONS MAY BE AVAILABLE FOR A FEE]

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 Yield
Maintenance Period End Date, the prepayment premium shall be the greater of:

	 	(i)	 	one percent (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 3.75% U.S. Treasury Security
due November 2018 (the “Specified U.S. Treasury Security”), on the
twenty-fifth (25th) Business Day preceding (x) the Intended Prepayment
Date, or (y) the date Lender accelerates the Advance or otherwise accepts
a prepayment pursuant to Paragraph 10(a)(3) of this Note, as the Yield
Rate is reported in The Wall Street Journal,

	 	 	 	by

	 	(C)	 	the present value factor calculated using the following formula:
	 
	 	 	 	

[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 Day of the 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]

A-1

 

In the event that no Yield Rate is published for the Specified
U.S. Treasury Security, then the nearest equivalent non-callable
U.S. Treasury Security having a maturity date closest to the Yield
Maintenance Period End Date of this Note 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 fourth (4th) month prior to the month in which the Maturity
Date occurs, the prepayment premium shall be one percent (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 fourth (4th) month prior to the month in which the Maturity Date occurs.

[Remainder of page intentionally left blank.]

A-2

 

[Initial Page to Schedule A to Fixed Facility Note (Standard Maturity)]

	 	 	 	 	 
	 

	 	JAB	 	 
	 

	 	 

	 	 
	 

	 	INITIALS	 	 

A-3

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