Document:

Amended and Restated Master Credit Facility

 Exhibit 10.12 
  
 AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT 
 (MAA II) 
  
 among 
  
 (i) MID-AMERICA APARTMENT COMMUNITIES, INC.,

 a Tennessee corporation, and 
  
 (ii) MID- AMERICA APARTMENTS, LP, 
 a Tennessee
limited partnership 
  
 and 
  
 PRUDENTIAL MULTIFAMILY MORTGAGE, INC., 
 a Delaware corporation, 
  
 dated as of 
  
 December 10, 2003 

 TABLE OF CONTENTS 
  

			
	 	  	Page

	 RECITALS
	  	1
		
	 ARTICLE I
	  	2
		
	 ARTICLE II
	  	24
		
	 SECTION 2.01 Variable Facility Commitment
	  	24
	 SECTION 2.02 Requests for Variable Advances
	  	24
	 SECTION 2.03 Maturity Date of Variable Advances
	  	24
	 SECTION 2.04 Interest on Variable Facility Advances
	  	24
	 SECTION 2.05 Coupon Rates for Variable Advances
	  	25
	 SECTION 2.06 Variable Facility Note
	  	25
	 SECTION 2.07 Extension of Variable Facility Termination Date
	  	25
	 SECTION 2.08 Reinstatement of Variable Commitment Upon Maturity of Fixed Facility Advances
	  	26
	 SECTION 2.09 Limitations on Right to Reborrow
	  	27
	 SECTION 2.10 Conditions Precedent to Reborrowing
	  	27
		
	 ARTICLE III
	  	28
		
	 SECTION 3.01 Fixed Facility Commitment
	  	28
	 SECTION 3.02 Requests for Fixed Facility Advances
	  	28
	 SECTION 3.03 Maturity Date of Fixed Facility Advances; Amortization
	  	28
	 SECTION 3.04 Interest on Fixed Facility Advances
	  	29
	 SECTION 3.05 Coupon Rates for Fixed Facility Advances
	  	29
	 SECTION 3.06 Fixed Facility Note
	  	29
	 SECTION 3.07 Conversion of Commitment from Variable Facility Commitment to Fixed Facility Commitment
	  	29
	 SECTION 3.08 Limitations on Right to Convert
	  	30
	 SECTION 3.09 Conditions Precedent to Conversion
	  	30
	 SECTION 3.10 Defeasance
	  	30
		
	 ARTICLE IV
	  	38
		
	 SECTION 4.01 Rate Setting for an Advance
	  	38
	 SECTION 4.02 Advance Confirmation Instrument for Variable Advances
	  	39
	 SECTION 4.03 Breakage and other Costs
	  	40
		
	 ARTICLE V
	  	40
		
	 SECTION 5.01 Initial Advance
	  	40
	 SECTION 5.02 Future Advances
	  	40
	 SECTION 5.03 Conditions Precedent to Future Advances
	  	40
	 SECTION 5.04 Determination of Allocable Facility Amount and Valuations
	  	41
		
	 ARTICLE VI
	  	42
		
	 SECTION 6.01 Right to Add Collateral
	  	42
	 SECTION 6.02 Procedure for Adding Collateral
	  	42
	 SECTION 6.03 Conditions Precedent to Addition of an Additional Mortgaged Property to the Collateral Pool
	  	43
		
	 ARTICLE VII
	  	44
		
	 SECTION 7.01 Right to Obtain Releases of Collateral
	  	44

  

			
	 SECTION 7.02 Procedure for Obtaining Releases of Collateral
	  	44
	 SECTION 7.03 Conditions Precedent to Release of Collateral Release Property from the Collateral
	  	45
	 SECTION 7.04 Substitutions
	  	47
		
	 ARTICLE VIII
	  	51
		
	 SECTION 8.01 Right to Increase Commitment
	  	51
	 SECTION 8.02 Procedure for Obtaining Increases in Commitment
	  	51
	 SECTION 8.03 Conditions Precedent to Increase in Commitment
	  	52
		
	 ARTICLE IX
	  	53
		
	 SECTION 9.01 Right to Complete or Partial Termination of Facilities
	  	53
	 SECTION 9.02 Procedure for Complete or Partial Termination of Facilities.
	  	53
	 SECTION 9.03 Conditions Precedent to Complete or Partial Termination of Facilities
	  	53
		
	 ARTICLE X
	  	54
		
	 SECTION 10.01 Right to Terminate Credit Facility
	  	54
	 SECTION 10.02 Procedure for Terminating Credit Facility
	  	54
	 SECTION 10.03 Conditions Precedent to Termination of Credit Facility
	  	55
		
	 ARTICLE XI
	  	55
		
	 SECTION 11.01 Conditions Applicable to All Requests
	  	55
	 SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Collateral Substitution Request,
Credit Facility Expansion Request or Future Advance Request
	  	57
	 SECTION 11.03 Delivery of Property-Related Documents
	  	57
		
	 ARTICLE XII
	  	58
		
	 SECTION 12.01 Representations and Warranties of the Borrower
	  	58
	 SECTION 12.02 Representations and Warranties of the Borrower
	  	62
	 SECTION 12.03 Representations and Warranties of the Lender
	  	65
		
	 ARTICLE XIII
	  	66
		
	 SECTION 13.01 Compliance with Agreements
	  	66
	 SECTION 13.02 Maintenance of Existence
	  	66
	 SECTION 13.03 Maintenance of REIT Status
	  	66
	 SECTION 13.04 Financial Statements; Accountants’ Reports; Other Information
	  	66
	 SECTION 13.05 Certificate of Compliance
	  	68
	 SECTION 13.06 Maintain Licenses
	  	69
	 SECTION 13.07 Access to Records; Discussions With Officers and Accountants
	  	69
	 SECTION 13.08 Inform the Lender of Material Events
	  	69
	 SECTION 13.09 Intentionally Omitted
	  	71
	 SECTION 13.10 Inspection
	  	71
	 SECTION 13.11 Compliance with Applicable Laws
	  	71
	 SECTION 13.12 Warranty of Title
	  	71
	 SECTION 13.13 Defense of Actions
	  	71
	 SECTION 13.14 Alterations to the Mortgaged Properties
	  	72
	 SECTION 13.15 ERISA
	  	72
	 SECTION 13.16 Loan Document Taxes
	  	72
	 SECTION 13.17 Further Assurances
	  	73
	 SECTION 13.18 Monitoring Compliance
	  	73
	 SECTION 13.19 Leases
	  	73

  

 ii 

			
	 SECTION 13.20 Intentionally Omitted
	  	73
	 SECTION 13.21 Transfer of Ownership Interests of the Borrower
	  	73
	 SECTION 13.22 Change in Senior Management
	  	75
	 SECTION 13.23 Date-Down Endorsements
	  	76
	 SECTION 13.24 Geographical Diversification
	  	76
	 SECTION 13.25 Ownership of Mortgaged Properties
	  	76
		
	 ARTICLE XIV
	  	76
		
	 SECTION 14.01 Other Activities
	  	76
	 SECTION 14.02 Value of Security
	  	76
	 SECTION 14.03 Zoning
	  	77
	 SECTION 14.04 Liens
	  	77
	 SECTION 14.05 Sale
	  	77
	 SECTION 14.06 Indebtedness
	  	77
	 SECTION 14.07 Principal Place of Business
	  	77
	 SECTION 14.08 Frequency of Requests
	  	77
	 SECTION 14.09 Change in Property Management
	  	77
	 SECTION 14.10 Condominiums
	  	78
	 SECTION 14.11 Restrictions on Partnership Distributions
	  	78
	 SECTION 14.12 Lines of Business
	  	78
	 SECTION 14.13 Limitation on Unimproved Real Property and New Construction
	  	78
	 SECTION 14.14 Dividend Payout
	  	78
		
	 ARTICLE XV
	  	79
		
	 SECTION 15.01 Financial Definitions
	  	79
	 SECTION 15.02 Compliance with Debt Service Coverage Ratios
	  	82
	 SECTION 15.03 Compliance with Loan to Value Ratios
	  	82
	 SECTION 15.04 Compliance with Concentration Test
	  	83
	 SECTION 15.05 Compliance with REIT’s Net Worth Test
	  	83
	 SECTION 15.06 Compliance with REIT’s Total Indebtedness to Consolidated Total Assets Ratio
	  	83
	 SECTION 15.07 Compliance with REIT’s Consolidated EBITDA to Interest Ratio
	  	83
	 SECTION 15.08 Compliance with REIT’s Consolidated EBITDA to Fixed Charge Ratio
	  	83
		
	 ARTICLE XVI
	  	83
		
	 SECTION 16.01 Standby Fee and Rate Preservation Fee
	  	83
	 SECTION 16.02 Origination Fees
	  	84
	 SECTION 16.03 Due Diligence Fees
	  	84
	 SECTION 16.04 Legal Fees and Expenses
	  	84
	 SECTION 16.05 MBS-Related Costs
	  	85
	 SECTION 16.06 Failure to Close any Request
	  	85
	 SECTION 16.07 Other Fees
	  	85
		
	 ARTICLE XVII
	  	85
		
	 SECTION 17.01 Events of Default
	  	85
		
	 ARTICLE XVIII
	  	88
		
	 SECTION 18.01 Remedies; Waivers
	  	88
	 SECTION 18.02 Waivers; Rescission of Declaration
	  	88
	 SECTION 18.03 The Lender’s Right to Protect Collateral and Perform Covenants and Other Obligations
	  	88

  

 iii 

			
	 SECTION 18.04 No Remedy Exclusive
	  	89
	 SECTION 18.05 No Waiver
	  	89
	 SECTION 18.06 No Notice
	  	89
	 SECTION 18.07 Application of Payments
	  	89
		
	 ARTICLE XIX
	  	89
		
	 SECTION 19.01 Special Pool Purchase Contract
	  	89
	 SECTION 19.02 Assignment of Rights
	  	89
	 SECTION 19.03 Release of Collateral
	  	89
	 SECTION 19.04 Replacement of Lender
	  	90
	 SECTION 19.05 Fannie Mae and Lender Fees and Expenses
	  	90
	 SECTION 19.06 Third-Party Beneficiary
	  	90
		
	 ARTICLE XX
	  	90
		
	 SECTION 20.01 Insurance and Real Estate Taxes
	  	90
	 SECTION 20.02 Replacement Reserves
	  	90
		
	 ARTICLE XXI
	  	91
		
	 SECTION 21.01 Swap.
	  	91
	 SECTION 21.02 Swap Terms.
	  	91
	 SECTION 21.03 Swap Security Agreement; Delivery of Swap Payments.
	  	92
	 SECTION 21.04 Termination.
	  	92
	 SECTION 21.05 Performance Under Swap Documents.
	  	92
		
	 ARTICLE XXII
	  	92
		
	 SECTION 22.01 Personal Liability to the Borrower
	  	92
		
	 ARTICLE XXIII
	  	94
		
	 SECTION 23.01 Counterparts
	  	94
	 SECTION 23.02 Amendments, Changes and Modifications
	  	94
	 SECTION 23.03 Payment of Costs, Fees and Expenses
	  	94
	 SECTION 23.04 Payment Procedure
	  	95
	 SECTION 23.05 Payments on Business Days
	  	95
	 SECTION 23.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial
	  	95
	 SECTION 23.07 Severability
	  	97
	 SECTION 23.08 Notices
	  	97
	 SECTION 23.09 Further Assurances and Corrective Instruments
	  	99
	 SECTION 23.10 Term of this Agreement
	  	99
	 SECTION 23.11 Assignments; Third–Party Rights
	  	99
	 SECTION 23.12 Headings
	  	100
	 SECTION 23.13 General Interpretive Principles
	  	100
	 SECTION 23.14 Interpretation
	  	100
	 SECTION 23.15 Standards for Decisions, Etc
	  	100
	 SECTION 23.16 Decisions in Writing
	  	100
	 SECTION 23.17 Joint and Several Liability
	  	100

  

 iv 

					
	 SCHEDULE I
	  	-	  	Summary of Credit Facility Structure
	 EXHIBIT A
	  	-	  	Schedule of Initial Mortgaged Properties and Initial Valuations
	 EXHIBIT B
	  	-	  	Fixed Facility Note
	 EXHIBIT C
	  	-	  	Intentionally Omitted
	 EXHIBIT D
	  	-	  	Compliance Certificate
	 EXHIBIT E
	  	-	  	Sample Facility Debt Service
	 EXHIBIT F
	  	-	  	Organizational Certificate
	 EXHIBIT G
	  	-	  	Intentionally Omitted
	 EXHIBIT H
	  	-	  	Revolving Credit Endorsement
	 EXHIBIT I
	  	-	  	Variable Facility Note
	 EXHIBIT J
	  	-	  	Tie-In Endorsement
	 EXHIBIT K
	  	-	  	Conversion Request
	 EXHIBIT L
	  	-	  	Conversion Amendment
	 EXHIBIT M
	  	-	  	Rate Setting Form
	 EXHIBIT N
	  	-	  	Rate Confirmation Form
	 EXHIBIT O
	  	-	  	Advance Confirmation Instrument
	 EXHIBIT P
	  	-	  	Future Advance Request
	 EXHIBIT Q
	  	-	  	Collateral Addition Request
	 EXHIBIT R
	  	-	  	Collateral Addition Description Package
	 EXHIBIT S
	  	-	  	Collateral Addition Supporting Documents
	 EXHIBIT T
	  	-	  	Collateral Release Request
	 EXHIBIT U
	  	-	  	Confirmation of Obligations
	 EXHIBIT V
	  	-	  	Credit Facility Expansion Request
	 EXHIBIT W
	  	-	  	Variable Facility Termination Request
	 EXHIBIT X
	  	-	  	Variable Facility Termination Document
	 EXHIBIT Y
	  	-	  	Credit Facility Termination Request
	 EXHIBIT Z
	  	-	  	Collateral Substitution Request
	 EXHIBIT AA
	  	-	  	Schedule of Approved Property Management Agreements
	 EXHIBIT BB
	  	-	  	Independent Unit Encumbrances
	 EXHIBIT CC
	  	-	  	Reborrowing Request
	 EXHIBIT DD
	  	-	  	Collateral Substitution Description Package
	 EXHIBIT EE
	  	-	  	Collateral Substitution Supporting Documents
	 EXHIBIT FF
	  	-	  	Reborrowing Amendment
	 EXHIBIT GG
	  	 	  	Swap Security Agreement
	 EXHIBIT HH
	  	 	  	DUS Properties

  

 v 

 AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT 
 (MAA II) 
  
 THIS AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT is made as of the 10th
day of December, 2003 by and among (i) (a) MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee corporation (the “REIT”) and (b) MID-AMERICA APARTMENTS, L.P., a
Tennessee limited partnership (“OP”; the REIT and OP being collectively referred to as the “Borrower”), and (ii) PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation (“Lender”). 

 
 RECITALS 
  
 A. Borrower and Lender entered into that certain Master Credit Facility
Agreement dated as of August 22, 2002 (the “Original Agreement”), pursuant to which Lender agreed to make credit available to Borrower under the terms and conditions set forth in the Original Agreement. 
  
 B. Pursuant to various amendments to the Original Agreement, among other
things various Mortgaged Properties (each capitalized term used but not defined has the meaning ascribed to such term in Article I of this Agreement) were added to the Collateral Pool. 
  
 C. The Borrower has requested that various terms and conditions of the Original Agreement be modified. The Borrower and the
Lender now wish to amend and restate the Original Agreement in its entirety. 
  
 D. The REIT owns, directly and indirectly, 85% of the voting interests in OP. 
  
 E. The Borrower owns Multifamily Residential Properties as more particularly described in Exhibit A to this Agreement. 
  
 F. Pursuant to the Original Agreement, the Lender established a $198,192,000
credit facility, comprised of a $0 Fixed Facility Commitment and a $198,192,000 Variable Facility Commitment. 
  
 G. Pursuant to various amendments to the Original Agreement, the Lender has increased the Credit Facility to $419,020,000. 
  
 H. Borrower and Lender desire to increase the amount by which the Commitment
may be expanded, modify certain other terms of the Original Agreement as set forth hereinafter, and confirm that the Credit Facility is $419,020,000 comprised of a $419,020,000 Variable Facility, all or part of which can be converted to a Fixed
Facility in accordance with, and subject to, the terms and conditions of this Agreement, subject to the rights of Borrower to elect to 

  

 
increase the Fixed Facility Commitment and the Variable Facility Commitment in accordance with Article VIII hereof. 
  
 I. To secure the obligations of the Borrower under this Agreement and the
other Loan Documents issued in connection with the Credit Facility, the Borrower has created a Collateral Pool in favor of the Lender. The Collateral Pool also secures the Borrower’s obligations under that certain Second Amended and Restated
Master Credit Facility Agreement between Lender, Borrower and Mid-America Apartments of Texas, L.P. dated of even date herewith (the “Other Credit Agreement”). The Collateral Pool is comprised of (i) Security Instruments on certain
Multifamily Residential Properties owned by the Borrower and (ii) any other Security Documents executed by the Borrower pursuant to this Agreement or any other Loan Documents. 
  
 J. Each of the Security Documents shall be cross-defaulted (i.e., a default under any Security Document, under this
Agreement or under the Other Credit Agreement, shall constitute a default under each Security Document, and this Agreement) and cross-collateralized (i.e., each Security Instrument shall secure all of the Borrower’s obligations under this
Agreement, the other Loan Documents issued in connection with the Credit Facility and the Other Credit Agreement) and it is the intent of the parties to this Agreement that the Lender may accelerate any Note without the necessity to accelerate any
other Note and that in the exercise of its rights and remedies under the Loan Documents, Lender may, except as provided in this Agreement, exercise and perfect any and all of its rights in and under the Loan Documents with regard to any Mortgaged
Property without the necessity to exercise and perfect its rights and remedies with respect to any other Mortgaged Property and that any such exercise shall be without regard to the Allocable Facility Amount assigned to such Mortgaged Property and
that Lender may recover an amount equal to the full amount outstanding in respect of any of the Notes in connection with such exercise and any such amount shall be applied as determined by Lender in its sole and absolute discretion. 
  
 K. Subject to the terms, conditions and limitations of this Agreement, the
Lender has agreed to establish the Credit Facility. 
  
 NOW,
THEREFORE, the Borrower and the Lender, in consideration of the mutual promises and agreements contained in this Agreement, hereby agree to amend and restate, in its entirety, the Original Agreement as follows: 
  
 ARTICLE I 
 DEFINITIONS 
  
 For all
purposes of this Agreement, the following terms shall have the respective meanings set forth below: 
  
 “Acquiring Person” means a “person” or “group of persons” within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended. 
  
 “Additional Collateral Due Diligence Fees” shall have the meaning set forth in Section 16.03(b). 
  

 -2- 

 “Additional Mortgaged Property” means each Multifamily Residential
Property owned by the Borrower (either in fee simple or as tenant under a ground lease meeting all of the requirements of the DUS Guide) and added to the Collateral Pool after the Initial Closing Date pursuant to Article VI. 
  
 “Advance” means a Variable Advance or a
Fixed Facility Advance. 
  
 “Advance
Confirmation Instrument” shall have the meaning set forth in Section 4.02. 
  
 “Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under
common control with, that Person. For the purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to
any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management (other than property management) and policies of that Person, whether through the ownership of voting securities, partnership
interests or by contract or otherwise. 
  
 “Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period” means, for any specified date, the ratio (expressed as a percentage) of— 
  
 (a) the aggregate of the Net Operating Income for the Trailing 12 Month Period for the Mortgaged Properties

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

  
 “Aggregate Loan to Value
Ratio” means, for any specified date, the ratio (expressed as a percentage) of— 
  
 (a) the Advances Outstanding on the specified date, 
  
 to 
  
 (b) the aggregate of the Valuations most recently obtained prior to the specified date for all of the Mortgaged Properties. 
  
 “Agreement” means this Master Credit
Facility Agreement, as it may be amended, supplemented or otherwise modified from time to time, including all Recitals and Exhibits to this Agreement, each of which is hereby incorporated into this Agreement by this reference. 
  
 “Allocable Facility Amount” means the
portion of the Credit Facility allocated to a particular Mortgaged Property by Lender in accordance with this Agreement. 
  

 -3- 

 “Amended and Restated Commitment” means the portion of the Commitment in
excess of $413,374,000. Any portion of the Commitment above $413,374,000 shall be deemed to be part of the Amended and Restated Commitment. 
  
 “Amended and Restated Closing Date” means the date of this Agreement. 
  
 “Amended and Restated Variable Facility
Commitment” means the portion of the Variable Facility Commitment in excess of $413,374,000. 
  
 “Amortization Period” means, with respect to each Fixed Facility Advance, the period of not less than 25 years and not
more than 30 years. 
  
 “Applicable
Law” means (a) all applicable provisions of all constitutions, statutes, rules, regulations and orders of all governmental bodies, all Governmental Approvals and all orders, judgments and decrees of all courts and arbitrators, (b) all
zoning, building, environmental and other laws, ordinances, rules, regulations and restrictions of any Governmental Authority affecting the ownership, management, use, operation, maintenance or repair of any Mortgaged Property, including the
Americans with Disabilities Act (if applicable), the Fair Housing Amendment Act of 1988 and Hazardous Materials Laws, (c) any building permits or any conditions, easements, rights-of-way, covenants, restrictions of record or any recorded or
unrecorded agreement affecting or concerning any Mortgaged Property including planned development permits, condominium declarations, and reciprocal easement and regulatory agreements with any Governmental Authority, (d) all laws, ordinances, rules
and regulations, whether in the form of rent control, rent stabilization or otherwise, that limit or impose conditions on the amount of rent that may be collected from the units of any Mortgaged Property, and (e) requirements of insurance companies
or similar organizations, affecting the operation or use of any Mortgaged Property or the consummation of the transactions to be effected by this Agreement or any of the other Loan Documents. 
  
 “Appraisal” means an appraisal of a
Multifamily Residential Property or Multifamily Residential Properties conforming to the requirements of Chapter 5 of Part III of the DUS Guide, and accepted by the Lender. 
  
 “Appraised Value” means the value set forth in an Appraisal. 
  
 “Borrower” means, individually and
collectively, the REIT and OP. 
  
 “Business Day” means a day on which Fannie Mae is open for business. 
  
 “Calendar Quarter” means, with respect to any year, any of the following three month periods: (a) January-February-March;
(b) April-May-June; (c) July-August-September; and (d) October-November-December. 
  
 “Cap” means an interest rate cap provided pursuant to, and satisfying the requirements of, Article XXI. 
  

 -4- 

 “Cap Rate” means, for each Mortgaged Property, a capitalization rate
reasonably selected by the Lender for use in determining the Valuations, as disclosed to the Borrower from time to time. 
  
 “Change of Control” means the earliest to occur of: (a) the date on which the REIT ceases for any reason whatsoever to be
the sole general partner or managing member of the OP or ceases to own, directly or indirectly, 100% of the sole general partner or managing member of the OP, or (b) the date on which an Acquiring Person becomes (by acquisition, consolidation,
merger or otherwise), directly or indirectly, the beneficial owner of more than 25% of the total Voting Equity Capital (or of any other Securities or ownership interest) of any Borrower then outstanding, or (c) the replacement (other than solely by
reason of retirement at age sixty-five or older, death or disability) of more than 50% (or such lesser percentage as is required for decision-making by the board of directors or an equivalent governing body) of the members of the board of directors
or an equivalent governing body) of the REIT or OP over a one-year period from the directors who constituted such board of directors at the beginning of such period and such replacement shall not have been approved by a vote of at least a majority
of the board of directors of the REIT or OP then still in office who either were members of such board of directors at the beginning of such one-year period or whose election as members of the board of directors was previously so approved (it being
understood and agreed that in the case of any entity governed by a trustee, board of managers, or other similar governing body, the foregoing clause (d) shall apply thereto by substituting such governing body and the members thereof for the board of
directors and members thereof, respectively). 
  
 “Closing Date” means the Initial Closing Date and each date after the Initial Closing Date on which the funding or other transaction requested in a Request is required to take place. 
  
 “Collateral” means, the Mortgaged
Properties and other collateral from time to time or at any time encumbered by the Security Instruments, or any other property securing the Borrower’s obligations under the Loan Documents. 
  
 “Collateral Addition Fee” means, with
respect to each Additional Mortgaged Property added to the Collateral Pool in accordance with Article VI— 
  
 (i) 65 basis points, multiplied by 
  
 (ii) Allocable Facility Amount of the Additional Mortgaged Property, as determined by the Lender; 
  
 Provided however, if a Collateral Addition Property is added to the
Collateral Pool in conjunction with such Mortgaged Property being released from the collateral pool under the Other Credit Agreement, the Collateral Addition Fee shall be waived for the aggregate of the first six (6) transactions which are either
Mortgaged Properties transferred from the Collateral Pool under this Agreement to the collateral pool under the Other Credit Agreement, or Mortgaged Properties 

  

 -5- 

 
transferred from the collateral pool under the Other Credit Agreement to the Collateral Pool under this Agreement. 
  
 “Collateral Addition Loan Documents” means
the Security Instrument covering an Additional Mortgaged Property and any other documents, instruments or certificates required by the Lender in connection with the addition of the Additional Mortgaged Property to the Collateral Pool pursuant to
Article VI. 
  
 “Collateral Addition
Request” shall have the meaning set forth in Section 6.02(a). 
  
 “Collateral Pool” means the aggregate total of the Collateral. 
  
 “Collateral Release Property” shall have the meaning set forth in Section 7.02(a). 
  
 “Collateral Release Request” shall have the
meaning set forth in Section 7.02(a). 
  
 “Collateral Substitution Fee” means, with respect to any substitution effected in accordance with Section 7.04, a fee equal to 65 basis points multiplied by the Allocable Facility Amount of the Substituted Mortgage Property
added to the Collateral Pool; provided however, if a Substituted Mortgaged Property is added to the Collateral Pool in conjunction with such Mortgaged Property being released from the collateral pool under the Other Credit Agreement, the Collateral
Substitution Fee shall be waived for the aggregate of the first six (6) transactions which are either Mortgaged Properties transferred from the Collateral Pool under this Agreement to the collateral pool under the Other Credit Agreement, or
Mortgaged Properties transferred from the collateral pool under the Other Credit Agreement to the Collateral Pool under this Agreement.. 
  
 “Commitment” means, at any time, the sum of the Fixed Facility Commitment and the Variable Facility Commitment.

  
 “Complete Fixed Facility
Termination” shall have the meaning set forth in Section 9.02(a). 
  
 “Complete Variable Facility Termination” shall have the meaning set forth in Section 9.02(a). 
  
 “Compliance Certificate” means a certificate of the Borrower in the form attached as Exhibit D to this Agreement.

  
 “Conversion Documents” has
the meaning specified in Section 3.07(b). 
  
 “Conversion Request” has the meaning specified in Section 3.07(a). 
  
 “Coupon Rate” means, with respect to a Variable Advance, the imputed interest rate determined by the Lender pursuant to
Section 2.05 for the Variable Advance and, with respect to a Fixed Facility Advance, the interest rate determined by the Lender pursuant to Section 3.05 for the Fixed Facility Advance. 
  

 -6- 

 “Coverage and LTV Tests” mean, for any specified date, each of the
following financial tests: 
  
 (a) The Aggregate
Debt Service Coverage Ratio for the Trailing 12 Month Period is not less than 140%. 
  
 (b) The Aggregate Loan to Value Ratio does not exceed 65%. 
  
 “Credit Facility” means the Fixed Facility and the Variable Facility. 
  
 “Credit Facility Expansion” means an
increase in the Commitment made in accordance with Article VIII. 
  
 “Credit Facility Expansion Loan Documents” means amendments to the Variable Facility Note or the Fixed Facility Note, as the case may be, increasing the amount of such Note to the amount of the
Commitment, as expanded in accordance with Article VIII and amendments to the Security Instruments, increasing the amount secured by such Security Instruments to the amount of the Commitment. 
  
 “Credit Facility Expansion Request” shall
have the meaning set forth in Section 8.02(a). 
  
 “Credit Facility Termination Date” means the last day of the fifth Loan Year, subject to extension in accordance with the provisions of Section 2.07. 
  
 “Credit Facility Termination Request” shall have the meaning set forth in Section 10.02(a).

  
 “Debt Service Coverage
Ratio” means, for any Mortgaged Property, for any specified date, the ratio (expressed as a percentage) of— 
  
 (a) the aggregate of the Net Operating Income for the preceding 12 month period for the subject Mortgaged Property 
  
 to 
  
 (b) the Facility Debt Service on the specified date, assuming, for the purpose of calculating the Facility
Debt Service for this definition, that Advances Outstanding shall be the Allocable Facility Amount for the subject Mortgaged Property. 
  
 “Discount” means, with respect to any Variable Advance, an amount equal to the excess of — 
  
 (i) the face amount of the MBS backed by the Variable
Advance, over 
  
 (ii) the Price of the MBS
backed by the Variable Advance. 
  

 -7- 

 “DUS Guide” means the Fannie Mae Multifamily Delegated Underwriting and
Servicing (DUS) Guide, as such Guide may be amended from time to time, including exhibits to the DUS Guide and amendments in the form of Lender Memos, Guide Updates and Guide Announcements (and, if such Guide is no longer used by Fannie Mae, the
term “DUS Guide” as used in this Agreement means the Fannie Mae Multifamily Negotiated Transactions Guide, as such Guide may be amended from time to time, including amendments in the form of Lender Memos, Guide Updates and Guide
Announcements). All references to specific articles and sections of, and exhibits to, the DUS Guide shall be deemed references to such articles, sections and exhibits as they may be amended, modified, updated, superseded, supplemented or replaced
from time to time. 
  
 “DUS Underwriting
Requirements” means the overall underwriting requirements for Multifamily Residential Properties as set forth in the DUS Guide. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time. 
  
 “Event of Default” means any event defined
to be an “Event of Default” under Article XVII. 
  
 “Facility Debt Service” means, as of any specified date, the sum of: 
  

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

  

	 	(i)	(A) with respect to Variable Advances (or portions thereof) that are not part of the Hedge Requirement Amount, each Variable Advance (or portion thereof) shall be deemed to require
level monthly payments of principal and interest (at the Coupon Rate for the Variable Advance (or portion thereof)) in an amount necessary to fully amortize the original principal amount of the Variable Advance (or portion thereof) over a 30-year
period, with such amortization deemed to commence on the first day of the 12 month period; and 

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

  

 -8- 

 
such Variable Advance (or portion thereof) shall be deemed to require level monthly payments of principal and interest (at the lesser of the Coupon Rate and
the stated price of the relevant Cap) in an amount necessary to fully amortize the original principal amount of the Variable Advance (or portion thereof) over a 30-year period, with such amortization deemed to commence on the first day of the 12
month period; and 
  

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

  

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

  
 Exhibit E to this Agreement contains an example of the determination of the Facility Debt Service. 
  
 “Facility Termination Fee” means, with
respect to a reduction in either the Variable Facility Commitment or the Fixed Facility Commitment pursuant to Articles IX or X, an amount equal to the product obtained by multiplying— 
  

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

  

	 	(2)	the Standby Fee (in basis points) shown on the Summary of Credit Facility Structure, by 

  

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

  
 1 - (1 + r)-n 
                  r

  

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

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

 -9- 

 “Fannie Mae” means the federally-chartered and stockholder-owned
corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. 
  
 “Financial Covenants” means the covenants set forth in Article XV. 
  
 “Fixed Facility” means the agreement of the
Lender to make Fixed Facility Advances to the Borrower pursuant to Section 3.01. 
  
 “Fixed Facility Advance” means a loan made by the Lender to the Borrower under the Fixed Facility Commitment. 

 
 “Fixed Facility Availability Period”
means (A) with respect to the Initial Commitment, the period ending on November 10, 2004, provided that if the Variable Facility Termination Date is extended pursuant to Section 2.07(a), the period ending on November 10, 2009, (B) with respect to
the Original Expansion Commitment, the period ending on August 22, 2007, and (C) with respect to the Amended and Restated Commitment, the period ending on December 10, 2008. 
  
 “Fixed Facility Commitment” means $0, plus such amount as the Borrower may elect to add to
the Fixed Facility Commitment in accordance with Articles III or VIII. 
  
 “Fixed Facility Fee” means the applicable fixed facility fee shown on the Summary of Credit Facility Structure as adjusted, if applicable, as set forth in Section 15.03 of this Agreement. 

 
 “Fixed Facility Note” means a promissory
note, in the form attached as Exhibit B to this Agreement, which will be issued by the Borrower to the Lender, concurrently with the funding of each Fixed Facility Advance, to evidence the Borrower’s obligation to repay the Fixed
Facility Advance. 
  
 “Future
Advance” means an Advance made after the Initial Closing Date. 
  
 “Future Advance Request” shall have the meaning set forth in Section 5.02. 
  
 “GAAP” means generally accepted accounting principles in the United States in effect from time to time, consistently
applied. 
  
 “General
Conditions” shall have the meaning set forth in Article XI. 
  
 “Geographical Diversification Requirements” means (a) at all times that aggregate Advances Outstanding are $100,000,000 or less, a requirement that the Collateral Pool consist of at least five (5)
Mortgaged Properties located in at least four (4) states, (b) at all times that aggregate Advances Outstanding are more than $100,000,000 and equal to or less than $200,000,000, a requirement that the Collateral Pool consist of at least ten (10)
Mortgaged Properties located in at least six (6) states, (c) at all times that aggregate Advances Outstanding are more than $200,000,000 and equal to or less than $300,000,000, a requirement that the Collateral Pool consist of at least 

  

 -10- 

 
twenty (20) Mortgaged Properties located in at least seven (7) states, and (c) at all times that aggregate Advances Outstanding are more than $300,000,000, a
requirement that the Collateral Pool consist of at least twenty-five (25) Mortgaged Properties located in at least seven (7) states. 
  
 “Governmental Approval” means an authorization, permit, consent, approval, license, registration or exemption from
registration or filing with, or report to, any Governmental Authority. 
  
 “Governmental Authority” means any court, board, agency, commission, office or authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence. 
  
 “Gross Revenues” means, for any specified period, with respect to any Multifamily Residential Property, all income in respect of such Multifamily Residential Property as reflected on the certified operating statement for
such specified period as adjusted to exclude unusual income (e.g. temporary or nonrecurring income), income not allowed under DUS guidelines as shown in Section 403.02 of Part III of the DUS Guide (e.g. interest income, furniture income, etc.), and
the value of any unreflected concessions. 
  
 “Hazardous Materials”, with respect to any Mortgaged Property, shall have the meaning given that term in the Security Instrument encumbering the Mortgaged Property. 
  
 “Hazardous Materials Law”, with respect to
any Mortgaged Property, shall have the meaning given that term in the Security Instrument encumbering the Mortgaged Property. 
  
 “Hazardous Substance Activity” means any storage, holding, existence, release, spill, leaking, pumping, pouring,
injection, escaping, deposit, disposal, dispersal, leaching, migration, use, treatment, emission, discharge, generation, processing, abatement, removal, disposition, handling or transportation of any Hazardous Materials from, under, into or on any
Mortgaged Property in violation of Hazardous Materials Laws, including the discharge of any Hazardous Materials emanating from any Mortgaged Property in violation of Hazardous Materials Laws through the air, soil, surface water, groundwater or
property and also including the abandonment or disposal of any barrels, containers and other receptacles containing any Hazardous Materials from or on any Mortgaged Property in violation of Hazardous Materials Laws, in each case whether sudden or
nonsudden, accidental or nonaccidental. 
  
 “Hedge” means a Swap, a Cap or a combination of a Swap and a Cap, or another interest rate protection instrument satisfying the requirements of Article XXI. 
  
 “Hedge Documents” has the meaning set forth in Section 21.02. 
  

 -11- 

 “Hedge Requirement Amount” means the amount by which the Variable
Facility Commitment exceeds, when added to the “Variable Facility Commitment” under the Other Credit Facility, $441,756,000. 
  
 “Hedge Security Agreement” means, with respect to a Hedge, the Interest Rate Hedge Security, Pledge and Assignment
Agreement between Borrower and Lender, for the benefit of Lender, in the form attached as Exhibit GG to this Agreement as such agreement may be amended, modified, supplemented or restated from time to time. 
  
 “Impositions” means, with respect to any
Mortgaged Property, all (1) water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property, (2) premiums for fire and other hazard insurance, rent loss insurance and such other insurance as Lender may
require under any Security Instrument, (3) Taxes, and (4) amounts for other charges and expenses which Lender at any time reasonably deems necessary to protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or
otherwise to protect Lender’s interests. 
  
 “Indebtedness” means, with respect to any Person, as of any specified date, without duplication, all: 
  
 (a) indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than (i) current
trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices, and (ii) for construction of improvements to property, if such person has a non-contingent contract to purchase such property);

  
 (b) other indebtedness of such Person which
is evidenced by a note, bond, debenture or similar instrument; 
  
 (c) obligations of such Person under any lease of property, real or personal, the obligations of the lessee in respect of which are required by GAAP to be capitalized on a balance sheet of the lessee or to be
otherwise disclosed as such in a note to such balance sheet; 
  
 (d) obligations of such Person in respect of acceptances (as defined in Article 3 of the Uniform Commercial Code of the District of Columbia) issued or created for the account of such Person; 
  
 (e) liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become liable for the payment of such liabilities; and 
  
 (f) as to any Person (“guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of a primary obligation (as defined below) with respect to which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing, or in effect guaranteeing, any indebtedness, lease, dividend or other obligation (“primary obligations”) of any third person (“primary 

  

 -12- 

 
obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, to (1)
purchase any such primary obligation or any property constituting direct or indirect security therefor, (2) advance or supply funds for the purchase or payment of any such primary obligation or to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (3) purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (4) otherwise assure or hold harmless the owner of any such primary obligation against loss in respect of the primary obligation, provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation of any guaranteeing person shall be deemed to be the lesser of (i) an amount equal
to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made and (ii) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such
Contingent Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Contingent Obligation shall be such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as determined by Owner in good faith. 
  
 “Initial Advance” means the Variable Advance Outstanding on the date hereof in the principal amount of $419,020,000.

  
 “Initial Closing Date” means
August 22, 2002. 
  
 “Initial
Commitment” means the portion of the Commitment equal to or less than $183,372,000. Any portion of the Commitment equal to or less than $183,372,000 shall be deemed to be part of the Initial Commitment.  
  
 “Initial Mortgaged Properties” means the
Multifamily Residential Properties described on Exhibit A to this Agreement and which represent the Multifamily Residential Properties which comprise the Collateral Pool on the date hereof. 
  
 “Initial Security Instruments” means the
Security Instruments covering the Initial Mortgaged Properties. 
  
 “Initial Valuation” means, when used with reference to specified Collateral, the Valuation initially performed for the Collateral as of the date on which the Collateral was added to the Collateral
Pool, as set forth in Exhibit A to this Agreement. 
  
 “Insurance Policy” means, with respect to a Mortgaged Property, the insurance coverage and insurance certificates evidencing such insurance required to be maintained pursuant to the Security Instrument encumbering the
Mortgaged Property. 
  
 “Internal Revenue
Code” means the Internal Revenue Code of 1986, as amended. Each reference to the Internal Revenue Code shall be deemed to include (a) any 

  

 -13- 

 
successor internal revenue law and (b) the applicable regulations whether final, temporary or proposed. 
  
 “Lease” means any lease, any sublease or
subsublease, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any
Mortgaged Property, and every modification, amendment or other agreement relating to such lease, sublease, subsublease or other agreement entered into in connection with such lease, sublease, subsublease or other agreement, and every guarantee of
the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto. 
  
 “Lender” shall have the meaning set forth in the first paragraph of this Agreement, but shall refer to any replacement
Lender if the initial Lender is replaced pursuant to the terms of Section 19.04. 
  
 “Lien” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance (including
both consensual and non-consensual liens and encumbrances). 
  
 “Loan Documents” means this Agreement, the Notes, the Advance Confirmation Instruments for the Variable Advances, the Security Documents, all documents executed by the Borrower pursuant to the General
Conditions set forth in Article XI of this Agreement and any other documents executed by the Borrower from time to time in connection with this Agreement or the transactions contemplated by this Agreement. 
  
 “Loan to Value Ratio “ means, for a
Mortgaged Property, for any specified date, the ratio (expressed as a percentage) of— 
  
 (a) the Allocable Facility Amount of the subject Mortgaged Property on the specified date, 
  
 to 
  
 (b) the Valuation most recently obtained prior to the specified date for the subject Mortgaged Property.

  
 “Loan Year” means the
12-month period from the first day of the first calendar month after the Initial Closing Date to and including the last day before the first anniversary of the Initial Closing Date, and each 12-month period thereafter. 
  
 “Material Adverse Effect” means, with
respect to any circumstance, act, condition or event of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, or circumstance or circumstances, whether or not related, a material adverse change in or a materially adverse effect upon any of (a) the business, operations, property or condition 

  

 -14- 

 
(financial or otherwise) of the Borrower, (b) the present or future ability of the Borrower to perform the Obligations for which it is liable, (c) the
validity, priority, perfection or enforceability of this Agreement or any other Loan Document or the rights or remedies of the Lender under any Loan Document, or (d) the value of, or the Lender’s ability to have recourse against, any Mortgaged
Property. 
  
 “MBS” means a
mortgage-backed security which is “backed” by an interest in the Notes and the Collateral Pool securing the Notes, which interest permits the holder of the MBS to participate in the Notes and the Collateral Pool to the extent of such
Advance. 
  
 “MBS Imputed Interest
Rate” shall have the meaning set forth in Section 2.05(a). 
  
 “MBS Issue Date” means the date on which a Fannie Mae MBS is issued by Fannie Mae. 
  
 “MBS Delivery Date” means the date on which a Fannie Mae MBS is delivered by Fannie Mae. 
  
 “MBS Pass-Through Rate” for a Fixed
Facility Advance means the interest rate as determined by the Lender (rounded to three places) payable in respect of the Fannie Mae MBS issued pursuant to the MBS Commitment backed by the Fixed Facility Advance as determined in accordance with
Section 4.01. 
  
 “Mortgaged
Properties” means, collectively, the Additional Mortgaged Properties, the Substituted Mortgaged Properties and the Initial Mortgaged Properties, but excluding each Collateral Release Property from and after the date of the release of the
Collateral Release Property from the Collateral Pool. 
  
 “Multifamily Residential Property” means a residential property, located in the United States, containing five or more dwelling units in which not more than twenty percent (20%) of the net rentable area is or will be rented
to non-residential tenants, and conforming to the requirements of Chapter 2 of Part III of the DUS Guide (Property Requirements). 
  
 “Net Operating Income” means, for any specified period, with respect to any Multifamily Residential Property, the
aggregate net income during such period equal to Gross Revenues during such period less the aggregate Operating Expenses during such period. If a Mortgaged Property is not owned by the Borrower or an Affiliate of the Borrower for the entire
specified period, the Net Operating Income for the Mortgaged Property for the time within the specified period during which the Mortgaged Property was owned by the Borrower or an Affiliate of the Borrower shall be the Mortgaged Property’s pro
forma net operating income determined by the Lender in accordance with the underwriting procedures set forth in Chapter 4 of Part III of the DUS Guide (Determination of Loan Amount). 
  
 “Note” means any Fixed Facility Note or the Variable Facility Note. 
  

 -15- 

 “Obligations” means the aggregate of the obligations of the Borrower
under this Agreement and the other Loan Documents. 
  
 “Operating Expenses” means, for any period, with respect to any Multifamily Residential Property, all expenses in respect of the Multifamily Residential Property, as determined by the Lender based on the certified operating
statement for such specified period as adjusted to provide for the following: (i) all appropriate types of expenses, including a management fee and deposits to the Replacement Reserves (whether funded or not), are included in the total operating
expense figure; (ii) upward adjustments to individual line item expenses to reflect market norms or actual costs and correct any unusually low expense items, which could not be replicated by a different owner or manager (e.g., a market rate
management fee will be included regardless of whether or not a management fee is charged, market rate payroll will be included regardless of whether shared payroll provides for economies, etc.); and (iii) downward adjustments to individual line item
expenses to reflect unique or aberrant costs (e.g., non-recurring capital costs, non-operating borrower expenses, etc.). 
  
 “Organizational Certificate” means a certificate of the Borrower in the form attached as Exhibit F to this
Agreement. 
  
 “Organizational
Documents” means all certificates, instruments and other documents pursuant to which an organization is organized or operates, including but not limited to, (i) with respect to a corporation, its articles of incorporation and bylaws, (ii)
with respect to a limited partnership, its limited partnership certificate and partnership agreement, (iii) with respect to a general partnership or joint venture, its partnership or joint venture agreement and (iv) with respect to a limited
liability company, its articles of organization and operating agreement. 
  
 “Original Expansion Commitment” means the portion of the Commitment in excess of $183,372,000 but less than $413,374,000. Any portion of the Commitment in excess of $183,372,000 but less than
$413,374,000 shall be deemed to be part of the Original Expansion Commitment. 
  
 “Outstanding” means, when used in connection with promissory notes, other debt instruments or Advances, for a specified date, promissory notes or other debt instruments which have been issued, or
Advances which have been made, but have not been repaid in full as of the specified date. 
  
 “Ownership Interests” means, with respect to any entity, any ownership interests in the entity and any economic rights
(such as a right to distributions, net cash flow or net income) to which the owner of such ownership interests is entitled. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under
ERISA. 
  
 “Permits” means all
permits, or similar licenses or approvals issued and/or required by an applicable Governmental Authority or any Applicable Law in connection 

  

 -16- 

 
with the ownership, use, occupancy, leasing, management, operation, repair, maintenance or rehabilitation of any Mortgaged Property or the Borrower’s
business. 
  
 “Permitted Liens”
means, with respect to a Mortgaged Property, (i) the exceptions to title to the Mortgaged Property set forth in the Title Insurance Policy for the Mortgaged Property which are approved by the Lender, (ii) the Security Instrument encumbering the
Mortgaged Property, (iii) any other Liens approved by the Lender, and (iv) Leases. 
  
 “Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company or any other
organization or entity (whether governmental or private). 
  
 “Potential Event of Default” means any event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default. 
  
 “Price” means, with respect to an Advance,
the proceeds of the sale of the MBS backed by the Advance. 
  
 “Property” means any estate or interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible. 
  
 “Rate Confirmation Form” shall have the
meaning set forth in Section 4.01(c). 
  
 “Rate Preservation Fee” means, for any month, an amount equal to the product obtained by multiplying: (i) 1/12, by (ii) 15 basis points, by (iii) the Reserved Amount. The Rate Preservation Fee shall be paid monthly in
arrears. 
  
 “Rate Setting Date”
shall have the meaning set forth in Section 4.01(b). 
  
 “Rate Setting Form” shall have the meaning set forth in Section 4.01(b). 
  
 “REIT” means Mid-America Apartment Communities, Inc., a Tennessee corporation. 
  
 “Release Fee” means, with respect to each
Mortgaged Property released from the Collateral Pool pursuant to Article VII, a fee equal to $15,000. Provided however, if a Collateral Release Property is released from the Collateral Pool in conjunction with such Mortgaged Property being added to
the collateral pool under the Other Credit Agreement, the Release Fee shall be waived for the aggregate of the first three (3) transactions which are either Mortgaged Properties transferred from the Collateral Pool under this Agreement to the
collateral pool under the Other Credit Agreement, or Mortgaged Properties transferred from the collateral pool under the Other Credit Agreement to the Collateral Pool under this Agreement. 
  
 “Release Price” shall have the meaning set
forth in Section 7.02(c). 
  

 -17- 

 “Rent Roll” means, with respect to any Multifamily Residential Property,
a rent roll prepared and certified by the owner of the Multifamily Residential Property, on Fannie Mae Form 4243, as set forth in Exhibit III-3 of the DUS Guide, or on another form approved by the Lender and containing substantially the same
information as Form 4243 requires. 
  
 “Replacement Reserve Agreement” means a Replacement Reserve and Security Agreement, reasonably required by the Lender, and completed in accordance with the requirements of the DUS Guide. 
  
 “Request” means a Collateral Addition
Request, a Collateral Substitution Request, a Collateral Release Request, a Conversion Request, a Credit Facility Expansion Request, a Credit Facility Termination Request, a Future Advance Request, a Reborrowing Request or a Variable Facility
Termination Request. 
  
 “Reserved
Amount” means $91,980,000 unless Borrower elects in writing a lesser amount not to exceed $511,000,000 minus the amount of the Commitment in effect at any time, but in no event greater than $91,808,000. The Fixed Facility Fee and the
Variable Facility Fee shall not increase with respect to the Reserved Amount in the event of an Expansion for so long as the Borrower timely pays the Rate Preservation Fee on the Reserved Amount.  
  
 “Revolving Credit Endorsement” means an
endorsement to a Title Insurance Policy which contains substantially the same coverages, and is subject to substantially the same or fewer exceptions (or such other exceptions as the Lender may approve), as the form attached as Exhibit H to
this Agreement. 
  
 “Security”
means a “security” as set forth in Section 2(1) of the Securities Act of 1933, as amended. 
  
 “Security Documents” means the Security Instruments, the Hedge Secuirty Agreement, the Replacement Reserve Agreements and
any other documents executed by the Borrower from time to time to secure the Borrower’s obligations under the Loan Documents. 
  
 “Security Instrument” means, for each Mortgaged Property, a separate Multifamily Mortgage, Deed of Trust or Deed to
Secure Debt, Assignment of Leases and Rents and Security Agreement given by the Borrower to or for the benefit of the Lender to secure the obligations of the Borrower under the Loan Documents. With respect to each Mortgaged Property owned by the
Borrower, the Security Instrument shall be substantially in the form published by Fannie Mae for use in the state in which the Mortgaged Property is located. The amount secured by the Security Instrument shall be equal to the Commitment in effect
from time to time. 
  
 “Senior
Management” means (i) the Chief Executive Officer, Chairman of the Board, President, Chief Financial Officer and Chief Operating Officer of the REIT or OP and (ii) any other individuals with responsibility for any of the functions typically
performed in a corporation by the officers described in clause (i). 
  

 -18- 

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

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

  

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

  

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

  

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

  

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

  

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

  

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

  

	 	(viii)	has paid its own liabilities from its own separate assets; 

  

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

  

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

  

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

  

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

  

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

  

	 	(xiv)	has not acquired obligations or securities of any other Person; 

  

 -19- 

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

  

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

  

	 	(xvii)	has conducted its own business in its own name; 

  

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

  

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

  

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

  

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

  

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

  

	 	(xxiii)	has corrected any known misunderstanding regarding its separate identity. 

  
 “SMSA” means a “standard metropolitan statistical area,” as defined from time to time by the United States
Office of Management and Budget. 
  
 “Standby Fee” means, for any month, an amount equal to the sum obtained by adding the product of (i) 1/12, by (ii) the amount shown as the Standby Fee on the Summary of Credit Facility Structure, by (iii) the Unused
Capacity. 
  
 “Subsequent Hedge”
has the meaning set forth in Section 21.01. 
  
 “Subsidiary” means, when used with reference to a specified Person, (i) any Person that, directly or indirectly, through one or more intermediaries, is controlled by the specified Person, (ii) any Person of which the
specified Person is, directly or indirectly, the owner of more than 50% of any voting class of Ownership Interests or (iii) any Person (A) which is a partnership and (B) of which the specified Person is a general partner and owns more than 50% of
the partnership interests. 
  
 “Substituted Mortgaged Property” means each Multifamily Residential Property owned by the Borrower (either in fee simple or as tenant under a ground lease meeting all of the requirements of the DUS Guide) and added to the
Collateral Pool after the Initial Closing Date in connection with substitution of Collateral as permitted by Section 7.04 of this Agreement. 
  

 -20- 

 “Summary of Credit Facility Structure” means the summary of credit
facility structure attached to this Agreement as Schedule I. 
  
 “Surveys” means the as-built surveys of the Mortgaged Properties prepared in accordance with the requirements of Section 113 of the DUS Guide, or otherwise approved by the Lender. 
  
 “Swap” means an interest rate swap provided
pursuant to and satisfying the requirements of Article XXI of this Agreement. 
  
 “Swap Rate” has the meaning set forth in Section 21.02. 
  
 “Taxes” means all taxes, assessments, vault rentals and other charges, if any, general, special or otherwise, including
all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a lien, on the Mortgaged Properties.

  
 “Term of this Agreement”
shall be determined as provided in Section 23.10 to this Agreement. 
  
 “Termination Date” means, at any time during which Fixed Facility Advances are Outstanding, the latest maturity date for any Fixed Facility Advance Outstanding, and, at any time during which Fixed
Facility Advances are not Outstanding, the Variable Facility Termination Date. 
  
 “Three Month LIBOR Rate” means the London interbank offered rate for three-month U.S. dollar deposits, as such rate is
reported in The Wall Street Journal. In the event that a rate is not published for Three-Month LIBOR, then the nearest equivalent duration London interbank offered rate for U.S. Dollar deposits shall be selected at Lender’s reasonable
discretion. If the publication of Three-Month LIBOR is discontinued, Lender shall determine such rate from another equivalent source selected by Lender in its reasonable discretion. 
  
 “Tie-In Endorsement” means an endorsement to a Title Insurance Policy which contains
substantially the same coverages, and is subject to substantially the same or fewer exceptions (or such other exceptions as the Lender may approve), as the form attached as Exhibit J to this Agreement. 
  
 “Title Company” means Fidelity National
Title Insurance Company of New York. 
  
 “Title Insurance Policies” means the mortgagee’s policies of title insurance issued by the Title Company from time to time relating to each of the Security Instruments, conforming to the requirements of Section 111 of
the DUS Guide, together with such endorsements, coinsurance, reinsurance and direct access agreements with respect to such policies as the Lender may, from time to time, consider necessary or appropriate, whether or not required by the DUS Guide,
including Revolving Credit 

  

 -21- 

 
Endorsements, if available, and Tie-In Endorsements, if available, and with a limit of liability under the policy (subject to the limitations contained in
Sections 6(a)(i) and 6(a)(iii) of the Stipulations and Conditions of the policy) equal to the Commitment. 
  
 “Trailing 12 Month Period” means, for any specified date, the 12 month period ending with the last day of the most recent
Calendar Quarter for which financial statements have been delivered by the Borrower to the Lender pursuant to Sections 13.04(c) and (d). 
  
 “Transfer” means (i) a sale, assignment, lease, pledge, transfer or other disposition (whether voluntary or by operation
of law) of, or the granting or creating of a lien, encumbrance or security interest in, any estate, rights, title or interest in a Mortgaged Property, or any portion thereof, or (ii) a sale, assignment, pledge, transfer or other disposition of any
interest in the Borrower, or (iii) the issuance or other creation of new ownership interests in the Borrower other than (a) sales of the stock of the REIT on the New York Stock Exchange or (b) private placements of ownership interests in the
Borrower that do not result in a Change of Control or any other partnership, corporation, real estate investment trust or other entity that has a direct or indirect ownership interest in the Borrower, or (iv) a merger or consolidation of the
Borrower into another entity or of another entity into the Borrower, or (v) the reconstitution of the Borrower from one type of entity to another type of entity, or (vi) the amendment, modification or any other change in the governing instrument or
instruments of such Person which has the effect of changing the relative powers, rights, privileges, voting rights or economic interests of the ownership interests in such Person. “Transfer” does not include (i) a conveyance of the
Mortgaged Property at a judicial or non-judicial foreclosure sale under any Security Instrument or (ii) the Mortgaged Property becoming part of a bankruptcy estate by operation of law under the United States Bankruptcy Code. 
  
 “Unused Capacity” means, for any month, the
sum of the daily average during such month of (i) the undrawn amount of the Variable Facility Commitment available under Article II of this Agreement for the making of Variable Advances plus (ii) the undrawn amount of the Fixed Facility Commitment
available under Article III of this Agreement for the making of Fixed Facility Advances, without regard to any unclosed Requests or to the fact that a Request must satisfy conditions precedent. 
  
 “Valuation” means, for any specified date,
with respect to a Multifamily Residential Property, (a) if an Appraisal of the Multifamily Residential Property was more recently obtained than a Cap Rate for the Multifamily Residential Property, the Appraised Value of such Multifamily Residential
Property, or (b) if a Cap Rate for the Multifamily Residential Property was more recently obtained than an Appraisal of the Multifamily Residential Property, the value derived by dividing— 
  

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

  

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

  

 -22- 

 Notwithstanding the foregoing, any Valuation for a Multifamily Residential Property calculated for a date
occurring before the first anniversary of the date on which the Multifamily Residential Property becomes a part of the Collateral Pool shall equal the Appraised Value of such Multifamily Residential Property, unless the Lender determines that
changed market or property conditions warrant that the value be determined as set forth in the preceding sentence. 
  
 “Variable Advance” means a loan made by the Lender to the Borrower under the Variable Facility Commitment. 
  
 “Variable Facility” means the agreement of
the Lender to make Advances to the Borrower pursuant to Section 2.01. 
  
 “Variable Facility Availability Period” means the period beginning on the Initial Closing Date and ending on the 90th day before the Variable Facility Termination Date. 
  
 “Variable Facility Commitment” means an
aggregate amount of $419,020,000, which shall be evidenced by the Variable Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Variable Facility Commitment in accordance with
Article VIII, and plus such amount as the Borrower may elect to reborrow in accordance with Section 2.08, and less such amount as the Borrower may elect to convert from the Variable Facility Commitment to the Fixed Facility Commitment in accordance
with Article III and less such amount by which the Borrower may elect to reduce the Variable Facility Commitment in accordance with Article IX. 
  
 “Variable Facility Fee” means the applicable variable facility fee shown on the Summary of Credit Facility Structure as
adjusted, if applicable, as set forth in Section 15.03 of this Agreement. 
  
 “Variable Facility Note” means, the promissory note, in the form attached as Exhibit I to this Agreement, which has been issued by the Borrower to the Lender to evidence the Borrower’s
obligation to repay Variable Advances. 
  
 “Variable Facility Termination Date” means (A) with respect to the Initial Commitment, November 10, 2004, unless extended pursuant to Section 2.07(a), (B) with respect to the Original Expansion Commitment, August 22, 2007
unless extended pursuant to Section 2.07(b), and (C) with respect to the Amended and Restated Commitment, December 10, 2008, unless extended pursuant to Section 2.07(b). 
  
 “Voting Equity Capital” means Securities or partnership interests of any class or classes,
the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the board of directors (or Persons performing similar functions). 
  

 -23- 

 ARTICLE II 
 THE VARIABLE FACILITY COMMITMENT 
  
 SECTION 2.01
Variable Facility Commitment. Subject to the terms, conditions and limitations of this Agreement, the Lender agrees to make Variable Advances to the Borrower from time to time during the applicable Variable Facility Availability Period. The
aggregate unpaid principal balance of the Variable Advances Outstanding at any time shall not exceed the Variable Facility Commitment. Subject to the terms, conditions and limitations of this Agreement, the Borrower may re-borrow any amounts under
the Variable Facility which it has previously borrowed and repaid under the Variable Facility. 
  
 SECTION 2.02 Requests for Variable Advances. The Borrower shall request a Variable Advance by giving the Lender a Future Advance Request in accordance with Section 5.02, as applicable. 
  
 SECTION 2.03 Maturity Date of Variable Advances. Regardless of the date on which a
Variable Advance is made, the maturity date of each Variable Advance shall be a date selected by the Borrower in its Request for the Variable Advance, which date shall be the last day of a calendar month occurring: 
  
 (a) no earlier than the date which completes three full
months after the Closing Date for the Variable Advance; and 
  
 (b) no later than the date which completes nine full months after the Closing Date for the Variable Advance. 
  
 For these purposes, a year shall be deemed to consist of 12 30-day months. For example, the date which completes three full months after September 15 shall be December
15; and the date which completes three full months after November 30 shall be February 28. 
  
 SECTION 2.04 Interest on Variable Facility Advances. 
  
 (a) Discount. Each Variable Advance shall be a discount loan. The original stated principal amount of a Variable Advance shall be
the sum of the Price of the Variable Advance and the Discount of the Variable Advance. The Price and Discount of each Variable Advance shall be determined in accordance with the procedures set out in Section 4.01. The proceeds of the Variable
Advance made available by the Lender to the Borrower will equal the Price of the Variable Advance. The Borrower shall pay to the Lender, in advance of the Lender making a Variable Advance requested by the Borrower, the entire Discount for the
Variable Advance. 
  
 (b) Partial Month
Interest. Notwithstanding anything to the contrary in this Section, if a Variable Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Variable Advance is the first day of the month following
the month in which the Variable Advance is made, the Borrower shall pay interest on the original stated principal amount of the Variable Advance for the partial month period commencing on the Closing Date for the Variable Advance and ending on the
last day of the calendar month in which the Closing Date occurs, at a rate per annum equal to the greater of (i) the Coupon Rate for the Variable Advance as determined in accordance with Section 2.05(b) and (ii) a rate determined by the Lender,
based on the Lender’s cost of funds and approved in 

  

 -24- 

 
advance, in writing, by the Borrower, pursuant to the procedures mutually agreed upon by the Borrower and the Lender. 
  
 (c) Variable Facility Fee. In addition to paying the
Discount and the partial month interest, if any, the Borrower shall pay monthly installments of the Variable Facility Fee to the Lender on account of each Variable Advance over the whole number of calendar months the MBS backed by the Variable
Advance is to run from the MBS Issue Date to the maturity date of the MBS. The Variable Facility Fee shall be payable in advance, in accordance with the terms of the Variable Facility Note. The first installment shall be payable on or prior to the
Closing Date for the Variable Advance and shall apply to the first full calendar month of the MBS backed by the Variable Advance. Subsequent installments shall be payable on the first day of each calendar month, commencing on the first day of the
second full calendar month of such MBS, until the maturity of such MBS. Each installment of the Variable Facility Fee shall be in an amount equal to the product of multiplying (i) the Variable Facility Fee, by (ii) the amount of the Variable
Advance, by (iii) 1/12. 
  
 SECTION 2.05 Coupon Rates for Variable
Advances. The Coupon Rate for a Variable Advance shall be a rate, per annum, as follows: 
  
 (a) The Coupon Rate for a Variable Advance shall equal the sum of (i) an interest rate as determined by the Lender pursuant to Section
4.01 of this Agreement (rounded to three places) payable for the Fannie Mae MBS pursuant to the MBS Commitment backed by the Variable Advance (“MBS Imputed Interest Rate”) and (ii) the Variable Facility Fee. 
  
 (b) Notwithstanding anything to the contrary in this
Section, if a Variable Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Variable Advance is the first day of the month following the month in which the Variable Advance is made, the Coupon
Rate for such Variable Advance for such period shall be the greater of (i) the rate for the Variable Advance determined in accordance with subsection (a) of this Section and (ii) a rate determined by the Lender, based on the Lender’s cost of
funds, and approved in advance, in writing, by the Borrower, pursuant to procedures mutually agreed upon by the Borrower and the Lender. 
  
 SECTION 2.06 Variable Facility Note. The obligation of the Borrower to repay the Variable Advances will be evidenced by the Variable Facility Note. The Variable
Facility Note shall be payable to the order of the Lender and shall be made in the amount of the Variable Facility Commitment. 
  
 SECTION 2.07 Extension of Variable Facility Termination Date. 
  
 (a) With respect to the Initial Commitment, unless the Borrower provides written notice to the Lender not less than thirty (30) nor more
than ninety (90) days prior to the then effective Variable Facility Termination Date requesting that the Variable Facility Termination Date not be extended, the Variable Facility Termination Date shall be extended for two (2) five (5) year periods
in each case upon satisfaction of each of the following conditions: 
  
 (i) No Event of Default or Potential Event of Default exists on either the date the notice required by paragraph (i) of this Section is given or on the then effective Variable Facility Termination Date. 
  

 -25- 

 (ii) All of the representations and warranties of the Borrower set forth in Article XII
of this Agreement and the Other Loan Documents are true and correct in all material respects on the date the notice required by paragraph (i) of this Section is given and on the then effective Variable Facility Termination Date. 
  
 (iii) The Borrower is in compliance with all of the
covenants set forth in Article XIII, Article XIV and Article XV on the date the notice required by paragraph (i) of this Section is given and on the then effective Variable Facility Termination Date. 
  
 Upon compliance with the other conditions set forth above, the Variable Facility Termination
Date shall be extended for five (5) years on the terms and conditions set forth in this Agreement and the Other Loan Documents, provided that the maturity and pricing applicable to the Variable Facility during the period after the then effective
Variable Facility Termination Date shall be acceptable to Lender in its discretion. 
  
 (b) With respect to the Original Expansion Commitment and the Amended and Restated Commitment, unless Borrower provides written notice to
the Lender not less than thirty (30) nor more than ninety (90) days prior to the then effective Variable Facility Termination Date requesting that the Variable Facility Termination Date not be extended, the Variable Facility Termination Date shall
be extended for one (1) five (5) year period upon satisfaction of each of the following conditions: 
  
 (i) No Event of Default or Potential Event of Default exists on either the date the notice required by paragraph (i) of this Section is
given or on the then effective Variable Facility Termination Date. 
  
 (ii) All of the representations and warranties of the Borrower set forth in Article XII of this Agreement and the Other Loan Documents are true and correct in all material respects on the date the notice required by
paragraph (i) of this Section is given and on the then effective Variable Facility Termination Date. 
  
 (iii) The Borrower is in compliance with all of the covenants set forth in Article XIII, Article XIV and Article XV on the date the notice
required by paragraph (i) of this Section is given and on the then effective Variable Facility Termination Date. 
  
 Upon receipt of the notice required in paragraph (i) of this Section and upon compliance with the other conditions set forth above, the Variable Facility Termination Date
shall be extended for five (5) years on the terms and conditions set forth in this Agreement and the Other Loan Documents, provided that the maturity and pricing applicable to the Variable Facility during the period after the then effective Variable
Facility Termination Date shall be acceptable to Lender in its discretion. 
  
 SECTION 2.08 Reinstatement of Variable Commitment Upon Maturity of Fixed Facility Advances. If any Fixed Facility Advance matures prior to the end of the Variable Facility 

  

 -26- 

 
Availability Period, Borrower may elect to reborrow any or all of such maturing Fixed Facility Advance and to increase the Variable Commitment by an amount
equal to the amount desired to be reborrowed by the Borrower on the following terms and conditions: 
  

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

  

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

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

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

  

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

  

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

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

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

  

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

  

	 	(c)	 The receipt by the Lender of an endorsement to each Title Insurance Policy, amending the effective date of the Title Insurance Policy to the Closing Date and

  

 -27- 

	 	 
showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date and other exceptions approved by the Lender;

  

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

  

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

  

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

  

ARTICLE III 
 THE FIXED FACILITY COMMITMENT

  
 SECTION 3.01 Fixed Facility Commitment. Subject to the terms,
conditions and limitations set forth in this Article, the Lender agrees to make Fixed Facility Advances to the Borrower from time to time during the Fixed Facility Availability Period. The aggregate original principal of the Fixed Facility Advances
shall not exceed the Fixed Facility Commitment. The borrowing of a Fixed Facility Advance shall permanently reduce the Fixed Facility Commitment by the original principal amount of the Fixed Facility Advance. The Borrower may not re-borrow any part
of the Fixed Facility Advance which it has previously borrowed and repaid, provided, however, that a Fixed Facility Advance that matures prior to the end of the Variable Facility Availability Period may be reborrowed as a Variable Advance pursuant
to the terms of Section 2.08 of this Agreement. 
  
 SECTION 3.02 Requests for
Fixed Facility Advances. The Borrower shall request a Fixed Facility Advance by giving the Lender a Future Advance Request in accordance with Section 5.02, as applicable. 
  
 SECTION 3.03 Maturity Date of Fixed Facility Advances; Amortization. The maturity date of each Fixed Facility Advance shall be the
maturity date selected by the Borrower, provided that (A) in the case of a Fixed Facility Advance drawn from the Initial Commitment, such Maturity Date shall not be earlier than the date five (5) years after the date of such Advance and shall not be
later than November 10, 2014, and (B) in the case of a Fixed Facility Advance drawn from the Original Expansion Commitment, such Maturity Date shall not be earlier than the date five (5) years after the date of such Advance and shall not be later
than the 10th anniversary of the Initial Closing Date. The principal of each Fixed Facility Advance shall, at the election of the Borrower, which election shall be made at the time of the first Conversion Request or Credit Facility Expansion Request
relating to a Fixed Facility Commitment (which election shall apply to all Fixed Facility Advances) be amortized on a 30-year schedule or shall require payments of interest only. 
  

 -28- 

 SECTION 3.04 Interest on Fixed Facility Advances. 
  
 (a) Advances. Each Fixed Facility Advance shall bear interest at a rate, per annum, equal to the sum
of (i) the MBS Pass-Through Rate determined for such Fixed Facility Advance and (ii) the Fixed Facility Fee. 
  
 (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Fixed Facility Advance is not made on
the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Fixed Facility Advance is the first day of the month following the month in which the Fixed Facility Advance is made, the Borrower shall pay interest on the original
stated principal amount of the Fixed Facility Advance for the partial month period commencing on the Closing Date for the Fixed Facility Advance and ending on the last day of the calendar month in which the Closing Date occurs at a rate, per annum,
equal to the greater of (i) the interest rate for the Fixed Facility Advance described in the first sentence of this Section and (ii) a rate determined by the Lender, based on the Lender’s cost of funds, and approved in advance, in writing, by
the Borrower, pursuant to procedures mutually agreed upon by the Borrower and the Lender. 
  
 SECTION 3.05 Coupon Rates for Fixed Facility Advances. The Coupon Rate for a Fixed Facility Advance shall be the rate of interest applicable to such Fixed Facility Advance pursuant to Section 3.04. 

 
 SECTION 3.06 Fixed Facility Note. The obligation of the Borrower to repay a Fixed
Facility Advance will be evidenced by a Fixed Facility Note. The Fixed Facility Notes shall be payable to the order of the Lender and shall be made in the original principal amount of each Fixed Facility Advance. 
  
 SECTION 3.07 Conversion of Commitment from Variable Facility Commitment to Fixed Facility
Commitment. The Borrower shall have the right, from time to time during the Fixed Facility Availability Period, to convert all or a portion of a Variable Facility Commitment to the Fixed Facility Commitment, in which event the Variable Facility
Commitment shall be reduced by, and the Fixed Facility Commitment shall be increased by, the amount of the conversion. 
  
 (a) Request. In order to convert all or a portion of the Variable Facility Commitment to the Fixed Facility Commitment, the
Borrower shall deliver a written request for a conversion (“Conversion Request”) to the Lender, in the form attached as Exhibit K to this Agreement. Each Conversion Request shall be accompanied by a designation of the amount
of the conversion and a designation of any Variable Advances Outstanding which will be prepaid on or before the Closing Date for the conversion as required by Section 3.08(c). 
  
 (b) Closing. If none of the limitations contained in Section 3.08 is violated, and all conditions
contained in Section 3.09 are satisfied, the Lender shall permit the requested conversion, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, and occurring within 30 Business Days after the
Lender’s receipt of the Conversion Request (or on such other date to which the Borrower and the Lender may agree), by executing and delivering, all at the sole cost and expense of the Borrower, an amendment to this Agreement, in the form
attached as Exhibit L to this Agreement, together with an 

  

 -29- 

 
amendment to each Security Document and other applicable Loan Documents, in form and substance satisfactory to the Lender, reflecting the change in the Fixed
Facility Commitment and the Variable Facility Commitment. The documents and instruments referred to in the preceding sentence are referred to in this Article as the “Conversion Documents.” 
  
 SECTION 3.08 Limitations on Right to Convert. The right of the Borrower to convert all
or a portion of the Variable Facility Commitment to the Fixed Facility Commitment is subject to the following limitations: 
  
 (a) Closing Date. The Closing Date shall occur during the Fixed Facility Availability Period. 
  
 (b) Minimum Request. Each Request for a conversion
shall be in the minimum amount of $5,000,000. 
  
 (c) Obligation to Prepay Variable Advances. If, after the conversion, the aggregate unpaid principal balance of all Variable Advances Outstanding will exceed the Variable Facility Commitment, the Borrower shall be obligated to
prepay, as a condition precedent to the conversion, an amount of Variable Advances Outstanding which is at least equal to the amount of the excess. 
  
 SECTION 3.09 Conditions Precedent to Conversion. The conversion of all or a portion of the Variable Facility Commitment to the Fixed Facility Commitment is subject
to the satisfaction of the following conditions precedent on or before the Closing Date: 
  
 (a) After giving effect to the requested conversion, the Coverage and LTV Tests will be satisfied; 
  
 (b) Prepayment by the Borrower in full of any Variable
Advances Outstanding which the Borrower has designated for payment, together with any associated prepayment premiums and other amounts due with respect to the prepayment of such Variable Advances; 
  
 (c) The receipt by the Lender of an endorsement to each
Title Insurance Policy, amending the effective date of the Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date and other exceptions approved by the
Lender; 
  
 (d) Receipt by the Lender of one or
more counterparts of each Conversion Document, dated as of the Closing Date, signed by each of the parties (other than the Lender) who is a party to such Conversion Document; and 
  
 (e) The satisfaction of all applicable General Conditions set forth in Article XI. 
  
 SECTION 3.10 Defeasance. At such time as the Borrower elects to convert all or a
portion of the Variable Facility Commitment to a Fixed Facility Commitment pursuant to Section 3.07 of this Agreement, or elects that any expansion of the Commitment shall be a Fixed Facility 

  

 -30- 

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

  
 (a) Conditions. Subject to Section
3.10(d), the Borrower shall have the right to obtain the release of Mortgaged Properties from the lien of the related Security Instruments (and all collateral derived from such Mortgage Properties, including assignment of leases, fixture filings and
other documents and instruments evidencing a lien or security interest in the Borrower’s assets [except the Substitute Collateral] shall be released) upon the satisfaction of all of the following conditions: 
  
 (1) Defeasance Notice. The Borrower shall give Lender
a notice (the “Defeasance Notice”), in the manner specified in Section 3.10(g)(4), on a form provided by Lender, specifying a Business Day (the “Defeasance Closing Date”) which the Borrower desires to consummate the
Defeasance. The Defeasance Closing Date specified by the Borrower may not be more than 45 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. The Borrower shall also specify in the
Defeasance Notice the name, address and telephone number of the Borrower for notices pursuant to Section 3.10(g)(4). The form Defeasance Notice provided by Lender specifies: (i) which Mortgaged Properties the Borrower proposes to be released,
provided that any Mortgaged Property securing only Fixed Facility Advances must be among the Mortgaged Properties proposed to be released; (ii) the name, address and telephone number of Lender for notices pursuant to Section 3.10(g)(4); (iii) the
account(s) to which payments to Lender are to be made; (iv) whether a Fannie Mae Investment Security will be offered for use as the Substitute Collateral and, if not, that U.S. Treasury Securities will be the Substitute Collateral; (v) whether the
Successor Borrower will be designated by Lender or the Borrower; and (vi) if a Fannie Mae Investment Security is offered for use as the Substitute Collateral, the Defeasance Notice shall also include the amount of the Defeasance Commitment Fee.

  
 Any applicable Defeasance Commitment fee must be paid by the
Borrower and received by Lender no later than the date and time when Lender receives the Defeasance Notice from the Borrower. 
  
 (2) Confirmation. After Lender has confirmed that the Defeasance is then permitted as provided in Section 3.10(d), and has
confirmed that the terms of the Defeasance Notice are reasonably acceptable to Lender, Lender shall, with reasonable promptness, notify the Borrower of such confirmation by signing the 

  

 -31- 

 
Defeasance Notice, attaching the Annual Yields for the Mortgage Payments beginning on the first day of the second calendar month after the Defeasance Closing
Date and ending on the Stated Maturity Date (if a Fannie Mae Investment Security is offered as Substitute Collateral) and transmitting the signed Defeasance Notice to the Borrower pursuant to Section 3.10(g)(4). If, after Lender has notified the
Borrower of its confirmation in accordance with the foregoing, Lender does not receive the Defeasance Commitment Fee within five (5) Business Days after the Defeasance Notice Effective Date, then the Borrower’s right to obtain Defeasance
pursuant to that Defeasance Notice shall terminate. 
  
 (3) Substitute Collateral. On or before the Defeasance Closing Date, the Borrower shall deliver to Lender a pledge and security agreement, in form and substance satisfactory to Lender in its sole discretion (the “Pledge
Agreement”), creating a first priority perfected security interest in favor of Lender in substitute collateral constituting an Investment Security (the “Substitute Collateral”). The Pledge Agreement shall provide the
Borrower’s authorization and direction that all interest on, principal of and other amounts payable with respect to the Substitute Collateral shall be paid directly to Lender to be applied to Mortgage Payments due under the Fixed Facility Note
subject to Defeasance. If the Substitute Collateral is issued in a certificated form and the Borrower has possession of the certificate, the certificate shall be endorsed (either on the certificate or on a separate writing attached thereto) by the
Borrower as directed by Lender and delivered to Lender. If the Substitute Collateral is issued in an uncertificated form, or in a certificated form but the Borrower does not have possession of the certificate, the Borrower shall execute and deliver
to Lender all documents and instruments required by Lender to create in Lender’s favor a first priority perfected security interest in such Substitute Collateral, including a securities account control agreement or any other instrument or
document required to perfect a security interest in each Substitute Collateral. 
  
 (4) Closing Documents. The Borrower shall deliver to Lender on or before the Defeasance Closing Date the documents described in
Section 3.10(b). 
  
 (5) Amounts Payable by
the Borrower. On or before the Defeasance Closing Date, the Borrower shall pay to Lender an amount equal to the sum of: 
  

	 	(A)	the Next Scheduled P&I Payment; 

  

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

  

	 	(C)	 all reasonable costs and expenses incurred by Lender or Servicer in connection with the Defeasance, including the 

  

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fees and disbursements of Lender’s or Servicer’s legal counsel. 

  
 (6) Defeasance Deposit. If a Fannie Mae Investment Security will be the Substitute Collateral, then,
on or before 3:00 p.m., Eastern Standard Time, on the Defeasance Closing Date, the Borrower shall pay the Defeasance Deposit (reduced by the Defeasance Commitment Fee) to Lender to be used by Lender to purchase the Fannie Mae Investment Security as
the Borrower’s agent. 
  
 (7) Covenants,
Representations and Warranties. On the Defeasance Closing Date, all of the covenants of the Borrower set forth in Articles XIII, XIV and XV of this Agreement and all of the representations and warranties of the Borrower set forth in Article XII
of this Agreement are true and correct in all material respects. 
  
 (8) Geographical Diversification. If, as a result of the Defeasance, Lender determines that the geographical diversification of the Collateral Pool is compromised (whether or not the Geographical
Diversification Requirement is met), Lender may require that the Borrower add or substitute Multifamily Residential Properties to the Collateral Pool in a number and having a valuation required to restore the Geographical Diversification of the
Collateral Pool to a level at least as diverse as before the Defeasance. 
  
 (b) Closing Documents. The documents required to be delivered to Lender on or before the Defeasance Closing Date pursuant to Section 3.10(a)(4) are: 
  
 (1) an opinion of counsel for the Borrower, in form and
substance satisfactory to Lender, to the effect that Lender has a valid and perfected lien and security interest of first priority in the Substitute Collateral and the principal and interest payable thereunder; 
  
 (2) an opinion of counsel for the Borrower, in form and
substance satisfactory to Lender, that the Defeasance, including both Borrowers granting to Lender of a lien and security interest in the Substitute Collateral and the assignment and assumption by Successor Borrower, and each of them, when
considered in combination and separately, are not subject to avoidance under any applicable federal or state laws, including Sections 547 and 548 of the U.S. Bankruptcy Code; 
  
 (3) if a Fannie Mae Investment Security is not used as
Substitute Collateral, and unless waived by Lender, a certificate in form and substance satisfactory to Lender, issued by an independent certified public accountant, or financial institution, approved by Lender, to the effect that the Substitute
Collateral will generate the Scheduled Defeasance Payments; 
  
 (4) unless waived by Lender, an opinion of counsel for the Borrower in form and substance satisfactory to Lender, that the Defeasance will not result in a “sale or exchange” of any Fixed Facility Note within
the meaning of Section 

  

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1001(c) of the Internal Revenue Code and the temporary and final regulations promulgated thereunder; 
  
 (5) such other opinions, certificates, documents or
instruments as Lender may reasonably request; and 
  
 (6) three counterparts of the executed Assignment and Assumption Agreement described in Section 3.10(e). 
  
 (c) Release. Upon the Borrower’s compliance with the requirements of Sections 3.10(a)(1) through (6), the Mortgaged Properties
shall be released from the lien of the Security Instruments (and all collateral derived from such Mortgaged Properties, including assignments of leases, fixture filings and other documents and instruments evidencing a lien or security interest in
the Borrower’s assets [except the Substitute Collateral] shall be released). Lender shall, with reasonable promptness, execute and deliver to the Borrower, at the Borrower’s cost and expense, any additional documents reasonably requested
by the Borrower in order to evidence or confirm the release of Lender’s liens and security interests described in the immediately preceding sentence. 
  
 (d) Defeasance Not Allowed. The Borrower shall not have the right to obtain Defeasance at any of the following times: 

 
 (1) before the third anniversary of the date of the
relevant Fixed Facility Note; 
  
 (2) after the
expiration of the Defeasance Period; or 
  
 (3)
after Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, any Note pursuant to Paragraph 6 of such Note. 
  
 (e) Assignment and Assumption. Upon the Borrower’s compliance with the requirements of Section
3.10(a), the Borrower shall assign all its obligations and rights under the relevant Fixed Facility Note, together with the Substitute Collateral, to a successor entity (the “Successor Borrower”) designated by Lender or, if not so
designated by Lender, designated by the Borrower and acceptable to Lender in its sole discretion. The Borrower and Successor Borrower shall execute and deliver to Lender an assignment and assumption agreement on a form provided by Lender (the
“Assignment and Assumption Agreement”). The Assignment and Assumption Agreement shall provide for (i) the transfer and assignment by the Borrower to Successor Borrower of the Substitute Collateral, subject to the lien and security
interest in favor of Lender, (ii) the assumption by Successor Borrower of all liabilities and obligations of the Borrower under the relevant Fixed Facility Note, and (iii) the release by Lender of the Borrower from all liabilities and obligations
under the relevant Fixed Facility Note and all Obligations related thereto. Lender shall, at the Borrower’s request and expense, execute and deliver releases, reconveyances and security interest terminations with respect to the released
Mortgage Properties and all other collateral held by Lender (except the Defeasance Deposit). The Assignment and Assumption 

  

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Agreement shall be executed by Lender with a counterpart to be returned by Lender to the Borrower and Successor Borrower thereafter; provided, however, in
all events that it shall not be a condition of Defeasance that the Assignment and Assumption Agreement be executed by Lender, or any Successor Borrower that is designated by Lender. 
  
 (f) Agent. If the Defeasance Notice provides that Lender will make available a Fannie Mae Investment
Security for purchase by the Borrower for use as the Substitute Collateral, the Borrower hereby authorizes Lender to use, and appoints Lender as its agent and attorney-in-fact for the purpose of using, the Defeasance Deposit (including any portion
thereof that constitutes the Defeasance Commitment Fee) to purchase a Fannie Mae Investment Security. 
  
 (g) Administrative Provisions. 
  
 (1) Fannie Mae Security Liquidated Damages. If the Borrower timely pays the Defeasance Commitment Fee, and Lender and the Borrower
timely transmits a signed facsimile copy of the Defeasance Notice pursuant to Section 3.10(a)(2), but the Borrower fails to perform its other obligations under Sections 3.10(a) and Section 3.10(e), Lender shall have the right to retain the
Defeasance Commitment Fee as liquidated damages for the Borrower’s default, as Lender’s sole and exclusive remedy, and, except as provided in Section 3.10(g)(2), the Borrower shall be released from all further obligations under this
Section 3.10. The Borrower acknowledges that, from and after the date on which Lender has executed the Defeasance Notice under Section 3.10(a)(2) and the Borrower has delivered the Defeasance Commitment Fee, Lender will incur financing costs in
arranging and preparing for the purchase of the Substitute Collateral and in arranging and preparing for the release of the Mortgaged Properties from the lien of the Security Instruments in reliance on the executed Defeasance Notice. The Borrower
agrees that the Defeasance Commitment Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Agreement, of the damages Lender will incur by reason of the Borrower’s default. 

 
 (2) Third Party Costs. In the event that the
Defeasance is not consummated on the Defeasance Closing Date for any reason, the Borrower agrees to reimburse Lender and Servicer for all reasonable third party costs and expenses (other than financing costs covered by Section 4.0l(g)(1) above),
including attorneys’ fees and expenses, incurred by Lender in reliance on the executed Defeasance Notice, within 10 Business Days after the Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of
Lender’s and Servicer’s third party costs and expenses. 
  
 (3) Payments. All payments required to be made by the Borrower to Lender or Servicer pursuant to this Section 3.10 shall be made by wire transfer of immediately available finds to the account(s) designated by
Lender or Servicer, as the case may be, in the Defeasance Notice. 
  

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 (4) Notice. The Defeasance Notice delivered pursuant to this Section 4.0l(g)(4)
shall be in writing and shall be sent by telecopier or facsimile machine which automatically generates a transmission report that states the date and time of the transmission, the length of the document transmitted and the telephone number of the
recipient’s telecopier or facsimile machine (or shall be sent by any distribution media, whether currently existing or hereafter developed, including electronic mail and internet distribution, as approved by Lender). Any notice so sent
addressed to the parties at their respective addresses designated in the Defeasance Notice pursuant to Section 3.10(a), shall be deemed to have been received on the date and time indicated on the transmission report of recipient. To be effective,
the Borrower must send the Defeasance Notice (as described above) so that Lender receives the Defeasance Notice no earlier than 11:00 a.m. and no later than 3:00 p.m. Eastern Standard Time on a Business Day. 
  
 (h) Definitions. For purposes of this Section 3.10,
the following terms shall have the following meanings: 
  
 (1) The term “Annual Yield” means the yield for the theoretical zero coupon U.S. Treasury Security as calculated from the current “on-the-run” U.S. Treasury yield curve with a term to maturity that most closely
matches the Applicable Defeasance Term for the Mortgage Payment, as published by Fannie Mae on MORNET® (or in an alternative electronic format) at 2:00 p.m. Eastern Standard Time on the Business Day that Lender receives the Defeasance Notice in accordance with Section 3.10(g)(4). If the
publication of yields on MORNET® is unavailable,
Lender shall determine yields from another source reasonably determined by Lender. 
  
 (2) The term “Applicable Defeasance Term” means, in the case of each Mortgage Payment, the number of calendar months,
based on a year containing 12 calendar months with 30 days each, in the period beginning on the first day of the first calendar month after the Defeasance Closing Date to the date on which such Mortgage Payment is due and payable. 
  
 (3) The term “Defeasance” means the
transaction in which all (but not less than all) of the Mortgaged Properties are released from the lien of the Security Instruments and Lender receives, as substitute collateral, a valid and perfected lien and security interest of first priority in
the Substitute Collateral and the principal and interest payable thereunder. 
  
 (4) The term “Defeasance Commitment Fee” means the amount specified in the Defeasance Notice as the Borrower’s good faith deposit to ensure performance of its obligations under this Section,
which shall equal two percent (2%) of the aggregate unpaid principal balance of the Fixed Facility Note subject to Defeasance as of the Defeasance Notice Effective Date, if the Successor Borrower is designated by the Borrower under Section 3.10(e),
or one percent (1%) of the aggregate unpaid principal balance of the Fixed Facility Note subject to Defeasance as of the Defeasance Notice Effective Date if the Successor 

  

 -36- 

 
Borrower is designated by Lender under Section 3.10(e). No Defeasance Commitment Fee will be applicable if U.S. Treasury Securities are specified in the
Defeasance Notice as the applicable Investment Security. 
  
 (5) The term “Defeasance Deposit” means an amount equal to the sum of the present value of each Mortgage Payment that becomes due and payable during the period beginning on the first day of the second
calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date, where the present value of each Mortgage Payment is determined using the following formula: 
  

					
	 	 	the amount of the Mortgage Payment	 	 
	 	 	
	 	 
	 	 	(1 + (the Annual Yield/12))n	 	 

  
 For this purpose,
the last Mortgage Payment due and payable on the Stated Maturity Date shall include the amounts that would constitute the unpaid principal balance of the Fixed Facility Note subject to Defeasance on the Stated Maturity Date if all prior Mortgage
Payments were paid on their due dates and “n” shall equal the Applicable Defeasance Term. 
  
 (6) The term “Defeasance Period” means the period beginning on the earliest permitted date determined under Section
3.10(d)(l) and ending on the 90th day before the Stated Maturity Date. 
  
 (7) The term “Defeasance Notice Effective Date” means the date on which Lender provides confirmation of the Defeasance Notice pursuant to Section 3.10(a)(2). 
  
 (8) The term “Fannie Mae Investment
Security” means any bond, debenture, note, participation certificate or other similar obligation issued by Fannie Mae in connection with the Defeasance which provides for Scheduled Defeasance Payments beginning in the second calendar month
after the Defeasance Closing Date. 
  
 (9) The
term “Investment Security” means: 
  
 (A) If offered by Lender pursuant to the Defeasance Notice, a Fannie Mae Investment Security purchased in the manner described in Sections 3.10(a)(6) and 3.10(f), and 
  
 (B) If no Fannie Mae Investment Security is offered by Lender pursuant to the Defeasance Notice, U.S.
Treasury Securities. 
  
 (10) The term
“Mortgage Payment” means the amount of each regularly scheduled monthly payment of principal and interest due and payable under the Fixed Facility Note subject to Defeasance during the period beginning on the first day of the second
calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date, and the amount that would constitute the 

  

 -37- 

 
aggregate unpaid principal balance of the Fixed Facility Note subject to Defeasance on the Stated Maturity Date if all prior Mortgage Payments were paid on
their due dates. 
  
 (11) The term “Next
Scheduled P&I Payment” means an amount equal to the monthly installment of principal and interest due under the Fixed Facility Note subject to Defeasance on the first day of the first calendar month after the Defeasance Closing Date.

  
 (12) The term “Scheduled Defeasance
Payments” means payments prior and as close as possible to (but in no event later than) the successive scheduled dates on which Mortgage Payments are required to be paid under the Fixed Facility Note subject to Defeasance and in amounts
equal to or greater than the scheduled Mortgage Payments due and payable on such dates under the Fixed Facility Note subject to Defeasance. 
  
 (13) The term “Stated Maturity Date” means the Maturity Date specified in the Fixed Facility Note subject to Defeasance
determined without regard to Lender’s exercise of any right of acceleration of the Fixed Facility Note subject to Defeasance. 
  
 (14) The term “U.S. Treasury Securities” means direct, non-callable and non-redeemable obligations of the United States
of America which provided for Scheduled Defeasance Payments beginning in the second calendar month after the Defeasance Closing Date. 
  
 ARTICLE IV 
 RATE SETTING FOR THE ADVANCES

  
 SECTION 4.01 Rate Setting for an Advance. Rates for an Advance shall be
set in accordance with the following procedures: 
  
 (a) Preliminary, Nonbinding Quote. At the Borrower’s request the Lender shall quote to the Borrower an estimate of the MBS Pass-Through Rate (for a proposed Fixed Facility Advance) or MBS Imputed Interest Rate (for a proposed
Variable Advance) for a Fannie Mae MBS backed by a proposed Advance. The Lender’s quote shall be based on (i) a solicitation of bids from institutional investors selected by the Lender and (ii) the proposed terms and amount of the Advance
selected by the Borrower. The quote shall not be binding upon the Lender. 
  
 (b) Rate Setting. If the Borrower satisfies all of the conditions to the Lender’s obligation to make the Advance in accordance with Article V, then the Borrower may propose a MBS Pass-Through Rate (for a
Fixed Facility Advance) or MBS Imputed Interest Rate (for a Variable Advance) by submitting to the Lender by facsimile transmission a completed and executed document, in the form attached as Exhibit M to this Agreement (“Rate Setting
Form”), before 1:00 p.m. Eastern Standard Time on any Business Day (“Rate Setting 

  

 -38- 

 
Date”). The Rate Setting Form contains various factual certifications required by the Lender and specifies: 
  
 (i) for a Variable Advance, the amount, term, MBS Issue
Date, Variable Facility Fee, the proposed maximum Coupon Rate (“Maximum Annual Coupon Rate”) and Closing Date for the Advance; and 
  
 (ii) for a Fixed Facility Advance, the amount, term, MBS Issue Date, Fixed Facility Fee, Maximum Annual Coupon Rate, Price (which will be
in a range between 99-1/2 and 100-1/2), Yield Maintenance Period, Amortization Period, if applicable, interest only and Closing Date for the Advance. 
  
 (c) Rate Confirmation. Within one Business Day after receipt of the completed and executed Rate Setting Form, the Lender shall
solicit bids from institutional investors selected by the Lender based on the information in the Rate Setting Form and, provided the actual Coupon Rate (if the low bid were accepted) would be at or below the Maximum Annual Coupon Rate, shall obtain
a commitment (“MBS Commitment”) for the purchase of a Fannie Mae MBS having the bid terms described in the related Rate Setting Form, and shall immediately deliver to the Borrower by facsimile transmission a completed document, in
the form attached as Exhibit N to this Agreement (“Rate Confirmation Form”). The Rate Confirmation Form will confirm: 
  
 (i) for a Variable Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Variable Facility Fee, Coupon
Rate, Discount, Price, and Closing Date for the Advance; and 
  
 (ii) for a Fixed Facility Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Pass-Through Rate, Fixed Facility Fee, Coupon Rate, Price, Yield Maintenance Period, Specified U.S. Treasury Security,
Amortization Period and Closing Date for the Advance. 
  
 SECTION 4.02 Advance
Confirmation Instrument for Variable Advances. On or before the Closing Date for a Variable Advance, the Borrower executes and delivers to the Lender an instrument (“Advance Confirmation Instrument”), in the form attached as
Exhibit O to this Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Variable Facility Fee, Coupon Rate, Discount, Price and Closing Date for the Advance, and the Borrower’s obligation
to repay the Advance in accordance with the terms of the Notes and this Agreement. Upon the funding of the Variable Advance, the Lender shall note the date of funding in the appropriate space at the foot of the Advance Confirmation Instrument and
deliver a copy of the completed Advance Confirmation Instrument to the Borrower. The Lender’s failure to do so shall not invalidate the Advance Confirmation Instrument or otherwise affect in any way any obligation of the Borrower to repay
Variable Advances in accordance with the Advance Confirmation Instrument, the Variable Facility Note or the other Loan Documents, but is merely meant to facilitate evidencing the date of funding and to confirm that the Advance Confirmation
Instrument is not effective until the date of funding. 
  

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 SECTION 4.03 Breakage and other Costs. In the event that the Lender obtains an MBS Commitment and the Lender fails
to fulfill the MBS Commitment because the Advance is not made (for a reason other than the default of the Lender to make the Advance), the Borrower shall pay all reasonable out-of-pocket costs payable to the potential investor and other reasonable
costs, fees and damages incurred by the Lender in connection with its failure to fulfill the MBS Commitment. The Lender reserves the right to require that the Borrower post a deposit at the time the MBS Commitment is obtained. The deposit referred
to in the preceding sentence shall be refundable to the Borrower upon the delivery of the related MBS. 
  
 ARTICLE V 
 MAKING THE ADVANCES 
  
 SECTION 5.01 Initial Advance. The Lender has made the Initial Advance. 
  
 SECTION 5.02 Future Advances. In order to obtain a Future Advance, the Borrower may
from time to time deliver a written request for a Future Advance (“Future Advance Request”) to the Lender, in the form attached as Exhibit P to this Agreement. Each Future Advance Request shall be accompanied by (a) a
designation of the amount of the Future Advance requested, and (b) a designation of the maturity date of the Advance. Each Future Advance Request shall be in the minimum amount of $3,000,000. If all conditions contained in Section 5.03 are
satisfied, the Lender shall make the requested Future Advance, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, and occurring on a date selected by the Borrower, which date shall be not more than
three (3) Business Days, after the Borrower’s receipt of the Rate Confirmation Form (or on such other date to which the Borrower and the Lender may agree). The Lender reserves the right to require that the Borrower post a deposit at the time
the MBS Commitment is obtained as an additional condition to the Lender’s obligation to make the Future Advance. The deposit referred to in the preceding sentence shall be refundable to the Borrower upon the delivery of the related MBS.

  
 SECTION 5.03 Conditions Precedent to Future Advances. The obligation of
the Lender to make a requested Future Advance is subject to the following conditions precedent: 
  
 (a) The receipt by the Lender of a Future Advance Request; 
  
 (b) The Lender has delivered the Rate Setting Form for the Future Advance to the Borrower; 
  
 (c) After giving effect to the requested Future Advance, the
Coverage and LTV Tests will be satisfied; 
  
 (d)
If the Advance is a Fixed Facility Advance, delivery of a Fixed Facility Note, duly executed by the Borrower, in the amount of the Advance, reflecting all of the terms of the Fixed Facility Advance; 
  
 (e) If the Advance is a Variable Advance, delivery of the
Advance Confirmation Instrument, duly executed by the Borrower; 
  

 -40- 

 (f) For any Title Insurance Policy not containing a Revolving Credit Endorsement, the
receipt by the Lender of an endorsement to the Title Insurance Policy, amending the effective date of the Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial
Closing Date, Permitted Liens, and other exceptions approved by the Lender; 
  
 (g) If the Advance is a Variable Advance, the receipt by the Lender of the first installment of Variable Facility Fee for the Variable Advance and the entire Discount for the Variable Advance payable by the Borrower
pursuant to Section 2.04; 
  
 (h) The receipt by
the Lender of all legal fees and expenses payable by the Borrower in connection with the Future Advance pursuant to Section 16.04(b); and 
  
 (i) If the Advance is a Variable Advance requiring a Hedge pursuant to the terms of Article XXI, receipt by Lender at least five (5) days
prior to the Closing Date for such Advance, of the confirmation of a Hedge commitment with respect to such Advance; 
  
 (j) If applicable, receipt by Lender of Hedge Documents effective as of the Closing Date; 
  
 (k) The satisfaction of all applicable General Conditions
set forth in Article XI. 
  
 SECTION 5.04 Determination of Allocable Facility
Amount and Valuations. The Lender shall determine the Allocable Facility Amount and Valuation for each Initial Mortgaged Property on the Initial Closing Date. Once each Calendar Quarter, within 20 Business Days after the Borrower has delivered
to the Lender the reports required in Section 13.04, the Lender shall determine the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month period and the Aggregate Loan to Value Ratio. If the Lender reasonably decides that changed market or
property conditions warrant, the Lender may (i) request an Appraisal of the relevant Mortgaged Properties and/or (ii) determine new Allocable Facility Amounts and Valuations at any other times. The Lender shall also redetermine Allocable Facility
Amounts as necessary to take account of any addition, release or substitution of Collateral or other event which invalidates the outstanding determinations. The Lender shall determine Cap Rates when determining Valuations on the basis of its
internal survey and analysis of cap rates for comparable sales in the vicinity of the Mortgaged Property, with such adjustments as the Lender deems appropriate and shall not be obligated to use any information provided by the Borrower. The Lender
shall promptly disclose its determinations to the Borrower. Until redetermined, the Allocable Facility Amounts and Valuations determined by the Lender shall remain in effect. In performing a Valuation of a Multifamily Residential Property to be
added to the Collateral Pool, the Lender shall be entitled to obtain an Appraisal. The Lender shall also have the right to obtain an Appraisal in connection with the redetermination of a Valuation of a Mortgaged Property, but only if the Lender is
unable to determine a Cap Rate for such Mortgaged Property and then only if the Lender has not obtained an Appraisal for such Mortgaged Property within the prior year. 
  

 -41- 

 ARTICLE VI 
 ADDITIONS OF COLLATERAL 
  
 SECTION 6.01 Right
to Add Collateral. Subject to the terms and conditions of this Article, the Borrower shall have the right, from time to time during the Term of this Agreement, to add Multifamily Residential Properties to the Collateral Pool in accordance with
the provisions of this Article. 
  
 SECTION 6.02 Procedure for Adding
Collateral. The procedure for adding Collateral set forth in this Section 6.02 shall apply to all additions of Collateral in connection with this Agreement, including but not limited to additions of Collateral in connection with substitutions of
Collateral and expansion of the Credit Facility. 
  
 (a) Request. The Borrower may, not more than eight (8) times per Calendar Year, deliver a written request (“Collateral Addition Request”) to the Lender, in the form attached as Exhibit Q to this Agreement, to
add one or more Additional Mortgaged Properties to the Collateral Pool. Each Collateral Addition Request shall be accompanied by the following: 
  
 (i) The information relating to the proposed Additional Mortgaged Property required by the form attached as Exhibit R to this
Agreement (“Collateral Addition Description Package”), as amended from time to time to include information required under the DUS Guide; and 
  

(ii) The payment of all Additional Collateral Due Diligence Fees pursuant to Section 16.03(b). 
  
 (b) Additional Information. The Borrower shall
promptly deliver to the Lender any additional information concerning the proposed Additional Mortgaged Property that the Lender may from time to time reasonably request. 
  
 (c) Underwriting. The Lender shall evaluate the proposed Additional Mortgaged Property, and shall
make underwriting determinations as to the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio applicable to the Collateral Pool, on the basis of the lesser of (i) if purchased by the Borrower
within 12 months of the related Collateral Addition Request, the acquisition price of the proposed Additional Mortgaged Property or (ii) a Valuation made with respect to the proposed Additional Mortgaged Property, and otherwise in accordance with
Fannie Mae’s DUS Underwriting Requirements, including applicable underwriting floors. Within 30 days after receipt of (i) the Collateral Addition Request for the proposed Additional Mortgaged Property and (ii) all reports, certificates and
documents set forth on Exhibit S to this Agreement, including a zoning analysis undertaken in accordance with Section 206 of the DUS Guide, the Lender shall notify the Borrower whether or not it shall consent to the addition of the proposed
Additional Mortgaged Property to the Collateral Pool and, if it shall so consent, shall set forth the Aggregate Debt Service Coverage Ratios for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio which it estimates shall result from
the addition of the proposed Additional Mortgaged Property to the Collateral Pool. If the Lender declines to consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Lender shall include, in its notice, a
brief statement of the reasons for doing so. Within five Business Days 

  

 -42- 

 
after receipt of the Lender’s notice that it shall consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the
Borrower shall notify the Lender whether or not it elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool. If the Borrower fails to respond within the period of five Business Days, it shall be conclusively
deemed to have elected not to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool. 
  
 (d) Closing. If, pursuant to subsection (c), the Lender consents to the addition of the proposed Additional Mortgaged Property to
the Collateral Pool, the Borrower timely elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool and all conditions contained in Section 6.03 are satisfied, the Lender shall permit the proposed Additional
Mortgaged Property to be added to the Collateral Pool, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, and occurring within 30 Business Days after the Lender’s receipt of the Borrower’s
election (or on such other date to which the Borrower and the Lender may agree). 
  
 SECTION 6.03 Conditions Precedent to Addition of an Additional Mortgaged Property to the Collateral Pool. The addition of an Additional Mortgaged Property to the Collateral Pool on the Closing Date applicable to the Additional
Mortgaged Property is subject to the satisfaction of the following conditions precedent: 
  
 (a) The proposed Additional Mortgaged Property has a Debt Service Coverage Ratio for the Trailing 12 Month Period of not less than 140%
and a Loan to Value Ratio of not more than 65% and immediately after giving effect to the requested addition, the Coverage and LTV Tests will be satisfied, and in the case of any substitution effected pursuant to Section 7.04 of this Agreement, the
Coverage and LTV Tests are not adversely affected after giving effect to the proposed substitution; 
  
 (b) The receipt by the Lender of the Collateral Addition Fee, except as provided in Section 16.02(b), and all legal fees and expenses
payable by the Borrower in connection with the Collateral Addition pursuant to Section 16.04(b); 
  
 (c) The delivery to the Title Company, with fully executed instructions directing the Title Company to file and/or record in all
applicable jurisdictions, all applicable Collateral Addition Loan Documents required by the Lender, including duly executed and delivered original copies of any Security Instruments and UCC-1 Financing Statements covering the portion of the
Additional Mortgaged Property comprised of personal property, and other appropriate documents, in form and substance satisfactory to the Lender and in form proper for recordation, as may be necessary in the opinion of the Lender to perfect the Lien
created by the applicable additional Security Instrument, and any other Collateral Addition Loan Document creating a Lien in favor of the Lender, and the payment of all taxes, fees and other charges payable in connection with such execution,
delivery, recording and filing; 
  
 (d) If
required by the Lender, amendments to the Notes and the Security Instruments, reflecting the addition of the Additional Mortgaged Property to the Collateral Pool and, as to any Security Instrument so amended, the receipt by the Lender of an
endorsement to the Title Insurance Policy insuring the Security Instrument, amending the effective date of the 

  

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Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date,
Permitted Liens and other exceptions approved by the Lender; 
  
 (e) If the Title Insurance Policy for the Additional Mortgaged Property contains a Tie-In Endorsement, an endorsement to each other Title Insurance Policy containing a Tie-In Endorsement, adding a reference to the
Additional Mortgaged Property; and 
  
 (f) The
satisfaction of all applicable General Conditions set forth in Article XI. 
  
 ARTICLE VII 
 RELEASES OF COLLATERAL 
  
 SECTION 7.01 Right to Obtain Releases of Collateral. Subject to the terms and conditions of this Article, the Borrower shall have the
right to obtain a release of Collateral from the Collateral Pool in accordance with the provisions of this Article. 
  
 SECTION 7.02 Procedure for Obtaining Releases of Collateral. 
  
 (a) Request. In order to obtain a release of Collateral from the Collateral Pool, the Borrower may, not more than once each
calendar month, deliver a written request for the release of Collateral from the Collateral Pool (“Collateral Release Request”) to the Lender, in the form attached as Exhibit T to this Agreement. The Collateral Release
Request shall not result in a termination of all or any part of the Credit Facility. The Borrower may only terminate all or any part of the Credit Facility by delivering a Variable Facility Termination Request or Credit Facility Termination Request
pursuant to Articles IX or X. The Collateral Release Request shall be accompanied by (and shall not be effective unless it is accompanied by) the name, address and location of the Mortgaged Property to be released from the Collateral Pool
(“Collateral Release Property”). 
  
 (b) Closing. If all conditions contained in Section 7.03 are satisfied, the Lender shall cause the Collateral Release Property to be released from the Collateral Pool, at a closing to be held at offices designated by the Lender on a
Closing Date selected by the Lender, and occurring within 30 days after the Lender’s receipt of the Collateral Release Request (or on such other date to which the Borrower and the Lender may agree, by executing and delivering, and causing all
applicable parties to execute and deliver, all at the sole cost and expense of the Borrower, instruments, in the form customarily used by the Lender for releases in the jurisdiction governing the perfection of the security interest being released,
releasing the applicable Security Instrument as a Lien on the Collateral Release Property, and UCC-3 Termination Statements terminating the UCC-1 Financing Statements perfecting a Lien on the portion of the Collateral Release Property comprised of
personal property and such other documents and instruments as the Borrower may reasonably request evidencing the release of the applicable Collateral from any lien securing the Obligations (including a termination of any restriction on the use of
any accounts relating to the Collateral Release Property) and the release and return to the Borrower of any and all escrowed amounts relating thereto. The instruments referred to in the preceding sentence are referred to in this Article as the
“Collateral Release 

  

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Documents.” The Borrower shall prepare the Collateral Release Documents and submit them to Lender for its review. 
  
 (c) Release Price. The “Release
Price” for each Mortgaged Property means (1) during the period Section 22.01(a) of this Agreement is in effect the greater of (i) the Allocable Facility Amount for the Mortgaged Property to be released and (ii) the amount, if any, of
Advances Outstanding which are required to be repaid by the Borrower to the Lender in connection with the proposed release of the Mortgaged Property from the Collateral Pool, so that, immediately after the release, the Coverage and LTV Tests will be
satisfied and neither the Aggregate Debt Service Coverage Ratios for the Trailing 12 Month Period will be reduced nor the Aggregate Loan to Value Ratio for the Trailing 12 Month Period will be increased as a result of such release and (2) at all
times after Section 22.01(a) of this Agreement is no longer in effect the greater of (i) 125% of the Allocable Facility Amount for the Mortgaged Property to be released and (ii) the amount, if any, of Advances Outstanding which are required to be
repaid by the Borrower to the Lender in connection with the proposed release of the Mortgaged Property from the Collateral Pool, so that, immediately after the release, the Coverage and LTV Tests will be satisfied and neither the Aggregate Debt
Service Coverage Ratios for the Trailing 12 Month Period will be reduced nor the Aggregate Loan to Value Ratio for the Trailing 12 Month Period will be increased as a result of such release. In addition to the Release Price, the Borrower shall pay
to the Lender all associated prepayment premiums and other amounts due under the Notes and any Advance Confirmation Instruments evidencing the Advances being repaid. 
  
 (d) Application of Release Price. The Release Price shall be applied against the Variable Advances
Outstanding until there are no further Variable Advances Outstanding, and thereafter shall be held by the Lender (or its appointed collateral agent) as substituted Collateral (“Substituted Cash Collateral”), in accordance with a
security agreement and other documents in form and substance acceptable to the Lender (or, at the Borrower’s option, may be applied against the prepayment of Fixed Facility Advances, so long as the prepayment is permitted under the Fixed
Facility Note for the Fixed Facility Advance). Any portion of the Release Price held as Substituted Cash Collateral may be released if, immediately after giving effect to the release, each of the conditions set forth in Section 7.03(a) below shall
have been satisfied. If, on the date on which the Borrower pays the Release Price, Variable Advances are Outstanding but are not then due and payable, the Lender shall hold the payments as additional Collateral for the Credit Facility, until the
next date on which Variable Advances are due and payable, at which time the Lender shall apply the amounts held by it to the amounts of the Variable Advances due and payable. 
  
 SECTION 7.03 Conditions Precedent to Release of Collateral Release Property from the Collateral. The obligation of the Lender to
release a Collateral Release Property from the Collateral Pool by executing and delivering the Collateral Release Documents on the Closing Date, are subject to the satisfaction of the following conditions precedent on or before the Closing Date:

  
 (a) Immediately after giving effect to the
requested release the Coverage and LTV Tests will be satisfied, and in the case of any substitution effected pursuant to Section 7.04 

  

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of this Agreement, the Coverage and LTV Tests are not adversely affected after giving effect to the proposed substitution; 
  
 (b) Receipt by the Lender of the Release Price; 

 
 (c) Receipt by the Lender of the Release Fee for the
Collateral Release Property and all legal fees and expenses payable by the Borrower in connection with the release pursuant to Section 16.04(b); 
  
 (d) Receipt by the Lender on the Closing Date of one or more counterparts of each Collateral Release Document, dated as of the Closing
Date, signed by each of the parties (other than the Lender) who is a party to such Collateral Release Document; 
  
 (e) If required by the Lender, amendments to the Notes and the Security Instruments, reflecting the release of the Collateral Release
Property from the Collateral Pool and, as to any Security Instrument so amended, the receipt by the Lender of an endorsement to the Title Insurance Policy insuring the Security Instrument, amending the effective date of the Title Insurance Policy to
the Closing Date and showing no additional exceptions to coverage other than the exceptions shown on the Initial Closing Date, Permitted Liens, and other exceptions approved by the Lender; 
  
 (f) If the Lender determines the Collateral Release Property
to be one phase of a project, and one or more other phases of the project are Mortgaged Properties which will remain in the Collateral Pool (“Remaining Mortgaged Properties”), the Lender must determine that the Remaining Mortgaged
Properties can be operated separately from the Collateral Release Property and any other phases of the project which are not Mortgaged Properties. In making this determination, the Lender shall evaluate whether the Remaining Mortgaged Properties
comply with the terms of Sections 203 and 208 of the DUS Guide, which, as of the date of this Agreement, require, among other things, that a phase which constitutes collateral for a loan made in accordance with the terms of the DUS Guide (i) have
adequate ingress and egress to existing public roadways, either by location of the phase on a dedicated, all-weather road or by access to such a road by means of a satisfactory easement, (ii) have access which is sufficiently attractive and direct
from major thoroughfares to be conducive to continued good marketing, (iii) have a location which is not (A) inferior to other phases, (B) such that inadequate maintenance of other phases would have a significant negative impact on the phase, and
(C) such that the phase is visible only after passing through the other phases of the project and (iv) comply with such other issues as are dictated by prudent practice; 
  
 (g) Receipt by the Lender of endorsements to the Tie-In Endorsements of the Title Insurance Policies, if
deemed necessary by the Lender, to reflect the release; 
  
 (h) Receipt by the Lender on the Closing Date of a writing, dated as of the Closing Date, signed by the Borrower, in the form attached as Exhibit U to this Agreement, pursuant to which the Borrower confirms
that its obligations under the Loan Documents are not adversely affected by the release of the Collateral Release Property from the Collateral; 
  
 (i) The remaining Mortgaged Properties in the Collateral Pool shall satisfy the then-existing Geographical Diversification Requirements;

  

 -46- 

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

  
 (k) Notwithstanding the other provisions of
this Section 7.03, no release of any of the Mortgaged Properties shall be made unless the Borrower has provided title insurance, taking into account Tie-In Endorsements, to Lender in respect of each of the remaining Mortgaged Properties in the
Collateral Pool in an amount equal to 125% of the Initial Valuation of each of such remaining Mortgaged Properties. 
  
 SECTION 7.04 Substitutions. 
  
 (a) Right to Substitute Collateral. Subject to the terms, conditions and limitations of this Section 7.04 and Article VII, the
Borrower shall have the right, from time to time during the Term of this Agreement, to add one or more Multifamily Residential Properties to the Collateral Pool in substitution of one or more Mortgaged Properties then in the Collateral Pool in
accordance with the provisions of this Section 7.04 (“Substituted Mortgaged Property”). 
  
 (b) Procedure for Substituting Collateral. 
  
 (i) Request. The Borrower may deliver a written request (“Collateral Substitution
Request”) to the Lender, in the form attached as Exhibit Z to this Agreement, to add one or more Multifamily Residential Properties to the Collateral Pool in substitution of one or more Mortgaged Properties then in the Collateral
Pool. Each Collateral Substitution Request shall be accompanied by the following: 
  
 (A) The information relating to the proposed Substituted Mortgaged Property required by the form attached as Exhibit DD to this
Agreement (“Collateral Substitution Description Package”), as amended from time to time to include information required under the DUS guide; 
  

(B) The payment of all Additional Collateral Due Diligence Fees pursuant to Section 16.03(b). 
  
 (C) A statement whether the addition of the proposed
Substituted Mortgaged Property will occur simultaneously with the release of the proposed Collateral Release Property and, if not, the Borrower shall specify the proposed date on which the proposed Substituted Mortgaged Property will be added to the
Collateral Pool which, in no event, shall be a date which is more than 90 days after the proposed date of the release of the proposed Collateral Release Property. 
  
 (ii) Additional Information. The Borrower shall promptly deliver to the Lender any additional
information concerning the proposed Substituted Mortgaged Property and the proposed Collateral Release Property that the Lender may from time to time reasonably request. 
  
 (iii) Underwriting. The Lender shall evaluate the proposed Substituted Mortgaged Property, and shall
make underwriting determinations as to (a) the Aggregate Debt Service Coverage Ratios and the Aggregate Loan to Value Ratio immediately prior 

  

 -47- 

 
to and immediately after giving effect to the proposed substitution, and (b) the Valuation and the Net Operating Income for the Trailing 12 Month Period for
both the proposed Substituted Mortgaged Property and the proposed Collateral Release Property. Notwithstanding anything to the contrary contained herein, for purposes of making such underwriting determines with respect to the proposed Substituted
Mortgaged Property, such determinations shall be made on the basis of a Valuation made with respect to the proposed Substituted Mortgaged Property, and otherwise in accordance with Fannie Mae’s DUS Underwriting Requirements, including
applicable underwriting floors. Within 30 days after receipt of (a) the Collateral Substitution Request for the proposed Substituted Mortgaged Property and the proposed Collateral Release Property and (b) all reports, certificates and documents set
forth on Exhibit EE to this Agreement, including a zoning analysis undertaken in accordance with Section 206 of the DUS Guide, the Lender shall notify the Borrower whether or not the proposed Substituted Mortgaged Property meets the Coverage
and LTV Tests and DUS Underwriting Requirements required by this Section 7.04(b)(iii), and therefore whether or not it shall consent to the addition of the proposed Substituted Mortgaged Property to the Collateral Pool in substitution of the
proposed Collateral Release Property and, if it shall so consent, shall set forth the Aggregate Debt Service Coverage Ratios and the Aggregate Loan to Value Ratio which it estimates shall result from the substitution of the proposed Substituted
Mortgaged Property into the Collateral Pool in replacement of the proposed Collateral Release Property. If the proposed Substituted Mortgaged Property does not meet the Coverage and LTV Tests and DUS Underwriting Requirements required by this
Section 7.04(b)(iii), and therefore the Lender does not consent to the substitution of the proposed Substituted Mortgaged Property into the Collateral Pool in replacement of the proposed Collateral Release Property, the Lender shall include, in its
notice, a brief statement of the reasons for doing so. Within five Business Days after receipt of the Lender’s notice that it shall consent to the substitution of the proposed Substituted Mortgaged Property into the Collateral Pool in
replacement of the proposed Collateral Release Property, the Borrower shall notify the Lender whether or not they elect to cause such substitution to occur. If the Borrower fail to respond within the period of five Business Days, they shall be
conclusively deemed to have elected not to cause the proposed substitution to occur. 
  
 (iv) Closing. If, pursuant to this Section 7.04, the Lender consents to the substitution of the proposed Substituted Mortgaged
Property into the Collateral Pool in replacement of the proposed Collateral Release Property, the Borrower timely elects to cause such substitution to occur and all conditions contained in Section 7.04(c) are satisfied, the Lender shall permit the
proposed Substituted Mortgaged Property to be substituted into the Collateral Pool in replacement of the proposed Collateral Release Property, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, and
occurring — 
  
 (x) if the substitution of
the proposed Substituted Collateral Property is to occur simultaneously with the release of the proposed Collateral Released Property, within 30 days after the Lender’s receipt of the Borrower’s election (or on such other date to which the
Borrower and the Lender may agree); or 
  

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 (y) if the substitution of the proposed Substituted Collateral Property is to occur
subsequent to the release of the Collateral Release Property, within 90 days after the release of the Collateral Release Property in accordance with Section 7.02(c). 
  
 If, in the case of clause (y), the addition of the proposed Substituted Collateral Property to the Collateral Pool does not
occur within 90 days or such longer period as approved by Lender, in its sole discretion, after the release of the Collateral Release Property in accordance with such clause (y), then the Borrower shall have waived its right to substitute such
Collateral Release Property with the proposed Substituted Mortgaged Property, the Release Price shall be determined pursuant to Section 7.02(c) and the Borrower shall comply with the requirement set forth in Section 7.03. Such Release Price, or the
applicable portion thereof, shall be credited under this Agreement and/or be immediately due and payable by the Borrower to the Lender to reduce the Advances Outstanding as required by, and in the manner set forth in, Section 7.02(d). 
  
 (c) Conditions Precedent to Substitution of a Substituted
Mortgaged Property into the Collateral Pool. The substitution of a Substituted Mortgaged Property into the Collateral Pool in replacement of a Collateral Release Property on the Closing Date is subject to the satisfaction of the following
conditions precedent: 
  
 (i) The proposed
Substituted Mortgaged Property has a Debt Service Coverage Ratio for the Trailing 12 Month Period of not less than 140% and a Loan to Value Ratio of not more than 65% and immediately after giving effect to the requested addition, the Coverage and
LTV Tests will be satisfied; 
  
 (ii) The Lender
shall have made the determination, as a part of the underwriting evaluations made in accordance with Section 7.04(b)(iii), that (a) the Aggregate Debt Service Coverage Ratio immediately after giving effect to the proposed substitution will be equal
to or higher than the Aggregate Debt Service Coverage Ratio immediately prior to the proposed substitution, and (ii) the Aggregate Loan to Value Ratio immediately after giving effect to the proposed substitution will be equal to or less than the
Aggregate Loan to Ratio immediately prior to giving effect to the proposed substitution; 
  
 (iii) With respect to the release of the proposed Collateral Release Property, the Borrower shall have complied with Section 7.03 (other
than clause (b) with respect to the requirement pertaining to Release Price); 
  
 (iv) The receipt by the Lender of the Collateral Substitution Fee and all legal fees and expenses payable by the Borrower in connection with the substitution pursuant to Section 16.04(b). 
  
 (v) The delivery to the Title Company, with fully executed
instructions directing the Title Company to file and/or record in all applicable jurisdictions, all applicable Collateral Substitution Loan Documents required by Lender, including duly executed and delivered original copies of any Security
Instruments and UCC-1 

  

 -49- 

 
Financing Statements covering the portion of the Substituted Mortgaged Property comprised of personal property, and other appropriate documents, in form and
substance satisfactory to the Lender and in form proper for recordation, as may be necessary in the opinion of the Lender to perfect the Lien created by the applicable additional Security Instrument, and any other Collateral Substitution Loan
Document creating a Lien in favor of the Lender, and the payment of all taxes, fees and other charges payable in connection with such execution, delivery, recording and filing; 
  
 (vi) If required by the Lender, amendments to the Notes and the Security Instruments, reflecting the
addition of the Substituted Mortgaged Property to the Collateral Pool and, as to any Security Instrument so amended, the receipt by the Lender of an endorsement to the Title Insurance Policy insuring the Security Instrument, amending the effective
date of the Title Insurance Policy to the Closing Date and showing no additional exceptions to coverage other than Permitted Liens; 
  
 (vii) If the Title Insurance Policy for the Substituted Mortgaged Property contains a Tie-In Endorsement, and endorsement to each other
Title Insurance Policy containing a Tie-In Endorsement, adding a reference to the Substituted Mortgaged Property; 
  
 (viii) The delivery to the Lender of additional collateral or the repayment of Advances Outstanding to the extent required pursuant to
Section 7.04(d); and 
  
 (ix) The satisfaction of
all General Conditions set forth in Article XI. 
  
 (d) Restriction on Borrowings. In the case that the substitution of the proposed Substituted Mortgaged Property is not to occur simultaneously with the release of the proposed Collateral Release Property, from and after the release
of the proposed Collateral Release Property until the addition of the proposed Substituted Mortgaged Property into the Collateral Pool in accordance with this Section 7.04, the Borrower shall not be permitted to have the aggregate unpaid principal
balance of Loans Outstanding to be in excess of an amount equal to the then-existing Commitment minus the Allocable Credit Facility Amount attributable to the Collateral Release Property that was released, unless the Borrower shall have delivered to
the Lender additional collateral reasonably acceptable to the Lender in an amount at least equal to such Allocable Credit Facility Amount. In the event that the aggregate unpaid principal balance of Advances Outstanding exceeds such amount (and
additional collateral in an amount at least equal to the applicable Allocable Credit Facility Amount has not been delivered by the Borrower to the Lender), as a condition precedent to the substitution of a Substituted Mortgaged Property into the
Collateral Pool, the Borrower shall pay such excess. Notwithstanding the foregoing, in no event shall the value of the additional collateral exceed 15% of the principal balance of the Loans Outstanding. Any payment received by the Lender under this
Section 7.04(d) shall be applied against Loans Outstanding in the manner prescribed for Release Prices pursuant to Section 7.02. The additional collateral shall be released to the Borrower upon the addition of the applicable Substituted Mortgaged
Property to the Collateral Pool in accordance with this Section 7.05. 
  

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 ARTICLE VIII 
 EXPANSION OF CREDIT FACILITY 
  
 SECTION 8.01
Right to Increase Commitment. Subject to the terms, conditions and limitations of this Article, the Borrower shall have the right, at any time or from time to time during the Fixed Facility Availability Period, to increase the Fixed Facility
Commitment, the Variable Facility Commitment, or both. Either Commitment may be increased by the addition of Collateral to the Collateral Pool and/or increases in the value of the Mortgaged Properties. The Borrower’s right to increase the
Commitment is subject to the following limitations: 
  
 (a) Maximum Amount of Increase in Commitment. The maximum amount by which the Commitment may be increased is $31,980,000 (to a maximum Commitment of $451,000,000). Notwithstanding the terms of this Agreement and Section 8.01 of the
Other Credit Agreement, Borrower hereby agrees that the total commitment, when added to the commitment of the Lender to the Borrower under the Other Credit Agreement, shall not exceed $611,000,000. Notwithstanding the foregoing, Borrower shall have
the right to further increase the Commitment by an additional $60,000,000 (to a maximum Commitment of $511,000,000) to the extent that Borrower pays off and causes to be released the liens currently placed on those certain Multifamily Residential
Properties identified on Exhibit HH (the “DUS Properties”). Borrower Parties acknowledge that the DUS Properties are currently subject to liens under the Fannie Mae Delegated Underwriting and Servicing program (the
“DUS Liens”) and are serviced by Lender. Borrower shall be permitted such further increase in the Commitment (not to exceed $511,000,000) in increments equal to the amount of any released DUS Liens. In such event, Borrower
hereby agrees that the total commitment, when added to the commitment of the Lender to the Borrower under the Other Credit Agreement, shall not exceed $704,000,000. 
  
 (b) Minimum Request. Each Request for an increase in the Commitment shall be in the minimum amount of
$3,000,000. 
  
 (c) Terms and Conditions.
The terms and conditions of this Agreement shall apply to any increase in the Commitment closed not later than the date 12 months after the Amended and Restated Date. The terms and conditions (including pricing, other than in respect of an increase
in the Commitment in an amount equal to or less than the Reserved Amount on which the Rate Preservation Fee has been paid, in which case the terms and conditions, including pricing, shall be as set forth in this Agreement) applicable to any increase
in the Commitment after the date 12 months after the Amended and Restated Closing Date shall be acceptable to Lender in its discretion.  
  
 SECTION 8.02 Procedure for Obtaining Increases in Commitment. 
  
 (a) Request. In order to obtain an increase in the Commitment, the Borrower shall deliver a written request for an increase (a
“Credit Facility Expansion Request”) to the Lender, in the form attached as Exhibit V to this Agreement. Each Credit Facility Expansion Request shall be accompanied by the following: 
  
 (i) A designation of the amount of the proposed increase;

  

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 (ii) A designation of the increase in the Fixed Facility Credit Commitment and the
Variable Facility Credit Commitment; 
  
 (iii) If
any Multifamily Residential Properties are proposed to be added to the Collateral Pool, a list of such Multifamily Residential Properties and evidence of compliance with the requirements of Article VI in connection with such addition; 
  
 (iv) [Intentionally Deleted]; 
  
 (v) A request that the Lender inform the Borrower of the
Fixed Facility Fee and the Variable Facility Fee to apply to Advances drawn from such increase in the Commitment. 
  
 (b) Closing. If all conditions contained in Section 8.03 are satisfied, the Lender shall permit the requested increase in the
Commitment, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, and occurring within fifteen (15) Business Days after the Lender’s receipt of the Credit Facility Expansion Request (or on such
other date to which the Borrower and the Lender may agree). 
  
 SECTION 8.03
Conditions Precedent to Increase in Commitment. The right of the Borrower to increase the Commitment is subject to the satisfaction of the following conditions precedent on or before the Closing Date: 
  
 (a) After giving effect to the requested increase the
Coverage and LTV Tests will be satisfied; 
  
 (b)
Payment by the Borrower of the Expansion Origination Fee in accordance with Section 16.02(b) and all legal fees and expenses payable by the Borrower in connection with the expansion of the Commitment pursuant to Section 16.04(b); 
  
 (c) The receipt by the Lender of an endorsement to each
Title Insurance Policy, amending the effective date of the Title Insurance Policy to the Closing Date, increasing the limits of liability to the Commitment, as increased under this Article, showing no additional exceptions to coverage other than the
exceptions shown on the Initial Closing Date (or, if applicable, the last Closing Date with respect to which the Title Insurance Policy was endorsed), the Permitted Liens, and other exceptions approved by the Lender, together with any reinsurance
agreements required by the Lender; 
  
 (d) The
receipt by the Lender of fully executed original copies of all Credit Facility Expansion Loan Documents, each of which shall be in full force and effect, and in form and substance satisfactory to the Lender in all respects; 
  
 (e) if determined necessary by the Lender, the
Borrower’s agreement to such geographical diversification requirements as the Lender may determine; and 
  
 (f) The satisfaction of all applicable General Conditions set forth in Article XI. 
  

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 ARTICLE IX 
 PARTIAL TERMINATION OF FACILITIES 
  
 SECTION 9.01
Right to Complete or Partial Termination of Facilities. Subject to the terms and conditions of this Article, the Borrower shall have the right to permanently reduce the Variable Facility Commitment and the Fixed Facility Commitment in
accordance with the provisions of this Article. 
  
 SECTION 9.02 Procedure for
Complete or Partial Termination of Facilities. 
  
 (a) Request. In order to permanently reduce the Variable Facility Commitment or the Fixed Facility Commitment, the Borrower may deliver a written request for the reduction (“Facility Termination Request”) to the
Lender, in the form attached as Exhibit W to this Agreement. A permanent reduction of the Variable Facility Commitment to $0 shall be referred to as a “Complete Variable Facility Termination.” A permanent reduction of the
Fixed Facility Commitment to $0 shall be referred to as a “Complete Fixed Facility Termination.” The Facility Termination Request shall be accompanied by the following: 
  
 (i) A designation of the proposed amount of the reduction in the Variable Facility Commitment or Fixed
Facility Commitment, as the case may be; and 
  
 (ii) Unless there is a Complete Variable Facility Termination, or a Complete Fixed Facility Termination, a designation by the Borrower of any Variable Advances which will be prepaid or Fixed Advances which will be prepaid or defeased, as
the case may be. 
  
 Any release of Collateral, whether or not made in connection
with a Facility Termination Request, must comply with all conditions to a release which are set forth in Article VII. 
  
 (b) Closing. If all conditions contained in Section 9.03 are satisfied, the Lender shall permit the Variable Facility Commitment or
Fixed Facility Commitment as the case may be, to be reduced to the amount designated by the Borrower, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, within fifteen (15) Business Days after the
Lender’s receipt of the Facility Termination Request (or on such other date to which the Borrower and the Lender may agree), by executing and delivering a counterpart of an amendment to this Agreement, in the form attached as Exhibit X
to this Agreement, evidencing the reduction in the Facility Commitment. The document referred to in the preceding sentence is referred to in this Article as the “Facility Termination Document.” 
  
 SECTION 9.03 Conditions Precedent to Complete or Partial Termination of Facilities.
The right of the Borrower to reduce the Facility Commitment and the obligation of the Lender to execute the Facility Termination Document, are subject to the satisfaction of the following conditions precedent on or before the Closing Date:

  
 (a) Payment by the Borrower in full of all of
the Variable Advances Outstanding and Fixed Facility Advances Outstanding, as the case may be, required to be paid in order that the aggregate unpaid principal balance of all Variable Advances Outstanding and Fixed Facility Advances Outstanding, as
the case may be, is not greater than the Variable 

  

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Facility Commitment and Fixed Facility Commitment, as the case may be, including any associated prepayment premiums or other amounts due under the Notes (but
if the Borrower is not required to prepay all of the Variable Advances or Fixed Facility Advances Outstanding, as the case may be, the Borrower shall have the right to select which of the Variable Advances or Fixed Facility Advances, as the case may
be, shall be repaid); 
  
 (b) Payment by the
Borrower of the Facility Termination Fee; 
  
 (c)
Receipt by the Lender on the Closing Date of one or more counterparts of the Facility Termination Document, dated as of the Closing Date, signed by each of the parties (other than the Lender) who is a party to such Facility Termination Document; and

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

 TERMINATION OF CREDIT FACILITY 
  
 SECTION 10.01 Right to Terminate Credit Facility. Subject to the terms and conditions of this Article, the Borrower shall have the right to terminate this
Agreement and the Credit Facility and receive a release of all of the Collateral from the Collateral Pool in accordance with the provisions of this Article. 
  
 SECTION 10.02 Procedure for Terminating Credit Facility. 
  
 (a) Request. In order to terminate this Agreement and the Credit Facility, the Borrower shall deliver a written request for the
termination (“Credit Facility Termination Request”) to the Lender, in the form attached as Exhibit Y to this Agreement. 
  
 (b) Closing. If all conditions contained in Section 10.03 are satisfied, this Agreement shall terminate, and the Lender shall cause
all of the Collateral to be released from the Collateral Pool, at a closing to be held at offices designated by the Lender on a Closing Date selected by the Lender, within 30 Business Days after the Lender’s receipt of the Credit Facility
Termination Request (or on such other date to which the Borrower and the Lender may agree), by executing and delivering, and causing all applicable parties to execute and deliver, all at the sole cost and expense of the Borrower, (i) instruments, in
the form customarily used by the Lender for releases in the jurisdictions in which the Mortgaged Properties are located, releasing all of the Security Instruments as a Lien on the Mortgaged Properties, (ii) UCC-3 Termination Statements terminating
all of the UCC-1 Financing Statements perfecting a Lien on the personal property located on the Mortgaged Properties, in form customarily used in the jurisdiction governing the perfection of the security interest being released, (iii) such other
documents and instruments as the Borrower may reasonably request evidencing the release of the Collateral from any lien securing the Obligations (including a termination of any restriction on the use of any accounts relating to the Collateral) and
the release and return to the Borrower of any and all escrowed amounts relating thereto, (iv) instruments releasing the Borrower from its obligations under this Agreement and any and all other Loan Documents, and (v) the Notes, each marked paid and
canceled. The instruments referred to in the preceding sentence are referred to in this Article as the “Facility Termination Documents.” 
  

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 SECTION 10.03 Conditions Precedent to Termination of Credit Facility. The right of the Borrower to terminate this
Agreement and the Credit Facility and to receive a release of all of the Collateral from the Collateral Pool and the Lender’s obligation to execute and deliver the Facility Termination Documents on the Closing Date are subject to the following
conditions precedent: 
  
 (a) Payment by the
Borrower in full of all of the Notes Outstanding on the Closing Date, including any associated prepayment premiums or other amounts due under the Notes and all other amounts owing by the Borrower to the Lender under this Agreement; 
  
 (b) If applicable, Defeasance by the Borrower, in accordance
with the provisions of Section 3.10 of this Agreement, with respect to all Fixed Facility Notes Outstanding on the Closing Date; 
  
 (c) Payment of the Facility Termination Fee; and 
  

(d) The satisfaction of all applicable General Conditions set forth in Article XI. 
  
 ARTICLE XI 
 GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS 
  
 The obligation of the Lender to close the transaction requested in a Request shall be subject to the following conditions precedent (“General
Conditions”) in addition to any other conditions precedent set forth in this Agreement: 
  
 SECTION 11.01 Conditions Applicable to All Requests. Each of the following conditions precedent shall apply to all Requests: 
  
 (a) Payment of Expenses. The payment by the Borrower of the Lender’s reasonable fees and
expenses payable in accordance with this Agreement. 
  
 (b) No Material Adverse Change. Except in connection with a Credit Facility Termination Request, there has been no material adverse change in the financial condition, business or prospects of the Borrower or in the physical
condition, operating performance or value of any of the Mortgaged Properties since the Initial Closing Date. 
  
 (c) No Default. Except in connection with a Credit Facility Termination Request, there shall exist no Event of Default or Potential
Event of Default on the Closing Date for the Request and, after giving effect to the transaction requested in the Request, no Event of Default or Potential Event of Default shall have occurred. 
  
 (d) No Insolvency. Except in connection with a Credit
Facility Termination Request, receipt by the Lender on the Closing Date for the Request of evidence satisfactory to the Lender that the Borrower is not insolvent (within the meaning of any applicable federal or state laws relating to bankruptcy or
fraudulent transfers) or will be rendered insolvent by the transactions contemplated by the Loan Documents, including the making of a Future Advance, or, after giving effect to such transactions, will be left with an unreasonably small capital with

  

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which to engage in its business or undertakings, or will have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts
as they mature or will have intended to hinder, delay or defraud any existing or future creditor. 
  
 (e) No Untrue Statements. The Loan Documents shall not contain any untrue or misleading statement of a material fact and shall not
fail to state a material fact necessary in order to make the information contained therein not misleading. 
  
 (f) Representations and Warranties. Except in connection with a Credit Facility Termination Request, all representations and
warranties made by the Borrower in the Loan Documents shall be true and correct in all material respects on the Closing Date for the Request with the same force and effect as if such representations and warranties had been made on and as of the
Closing Date for the Request. 
  
 (g) No
Condemnation or Casualty. Except in connection with a Credit Facility Termination Request, there shall not be pending or threatened any condemnation or other taking, whether direct or indirect, against any Mortgaged Property and there shall not
have occurred any casualty to any improvements located on any Mortgaged Property, which casualty would have a material adverse effect on the continued operations of such Mortgaged Property. 
  
 (h) [Intentionally Deleted] 
  
 (i) Delivery of Closing Documents. The receipt by the
Lender of the following, each dated as of the Closing Date for the Request, in form and substance satisfactory to the Lender in all respects: 
  
 (i) A Compliance Certificate; 
  
 (ii) An Organizational Certificate; and 
  
 (iii) Such other documents, instruments, approvals (and, if requested by the Lender, certified duplicates of executed copies thereof) and
opinions as the Lender may reasonably request. 
  
 (j) Covenants. Except in connection with a Credit Facility Termination Request, the Borrower is in full compliance with each of the covenants set forth in Articles XIII, XIV and XV of this Agreement, without giving effect to any
notice and cure rights of the Borrower. 
  

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 SECTION 11.02 Delivery of Closing Documents Relating to Collateral Addition Request, Collateral Substitution Request,
Credit Facility Expansion Request or Future Advance Request. With respect to the closing of a Collateral Addition Request, a Collateral Substitution Request, or a Credit Facility Expansion Request, it shall be a condition precedent that the
Lender receives each of the following, each dated as of the Closing Date for the Request, in form and substance satisfactory to the Lender in all respects: 
  
 (a) Loan Documents. Fully executed original copies of each Loan Document required to be executed in connection with the Request,
duly executed and delivered by the parties thereto (other than the Lender), each of which shall be in full force and effect. 
  
 (b) Opinion. Favorable opinions of counsel to the Borrower, as to the due organization and qualification of the Borrower, the due
authorization, execution, delivery and enforceability of each Loan Document executed in connection with the Request and such other matters as the Lender may reasonably require. 
  
 SECTION 11.03 Delivery of Property-Related Documents. With respect to each of the Mortgaged Properties to be made part of the
Collateral Pool on the Closing Date of a Collateral Addition Request or a Collateral Substitution Request, it shall be a condition precedent that the Lender receive each of the following, each dated as of the Closing Date of a Collateral Addition
Request or a Collateral Substitution Request, as the case may be, in form and substance satisfactory to the Lender in all respects: 
  
 (a) A favorable opinion of local counsel to the Borrower or the Lender as to the enforceability of the Security Instrument, and any other
Loan Documents, executed in connection with the Request. 
  
 (b) A commitment for the Title Insurance Policy applicable to the Mortgaged Property and a pro forma Title Insurance Policy based on the Commitment. 
  
 (c) The Insurance Policy (or a certified copy of the Insurance Policy) applicable to the Mortgaged Property.

  
 (d) The Survey applicable to the Mortgaged
Property. 
  
 (e) Evidence satisfactory to the
Lender of compliance of the Mortgaged Property with property laws as required by Sections 205 and 206 of Part III of the DUS Guide. 
  
 (f) An Appraisal of the Mortgaged Property. 
  
 (g) A Replacement Reserve Agreement, providing for the establishment of a replacement reserve account, to be pledged to the Lender, in
which the owner shall (unless waived by the Lender) periodically deposit amounts for replacements for improvements at the Mortgaged Property and as additional security for the Borrower’s obligations under the Loan Documents. 
  
 (h) A Completion/Repair and Security Agreement, together
with required escrows, on the standard form required by the DUS Guide. 
  
 (i) An Assignment of Management Agreement, on the standard form required by the DUS Guide. 
  
 (j) An Assignment of Leases and Rents, if the Lender determines one to be necessary or desirable, provided that the provisions of any such
assignment shall be 

  

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substantively identical to those in the Security Instrument covering the Collateral, with such modifications as may be necessitated by applicable state or
local law. 
  
 ARTICLE XII 
 REPRESENTATIONS AND WARRANTIES 
  
 SECTION 12.01 Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to the Lender as follows: 
  
 (a) Due Organization; Qualification. 
  
 (1) The REIT is qualified to transact business and is in
good standing in the State of Tennessee. The Borrower is qualified to transact business and is in good standing in the State in which it is organized and in each other jurisdiction in which such qualification and/or standing is necessary to the
conduct of its business and where the failure to be so qualified would adversely affect the validity of, the enforceability of, or the ability of the Borrower to perform the Obligations under this Agreement and the other Loan Documents. The Borrower
is qualified to transact business and is in good standing in each State in which it owns a Mortgaged Property. 
  
 (2) The Borrower’s principal place of business, principal office and office where it keeps its books and records as to the Collateral
is located at the address set out in Section 23.08. 
  
 (b) Power and Authority. The Borrower has the requisite power and authority (i) to own their properties and to carry on their business as now conducted and as contemplated to be conducted in connection with the performance of the
Obligations hereunder and under the other Loan Documents and (ii) to execute and deliver this Agreement and the other Loan Documents and to carry out the transactions contemplated by this Agreement and the other Loan Documents. 
  
 (c) Due Authorization. The execution, delivery and
performance of this Agreement and the other Loan Documents have been duly authorized by all necessary action and proceedings by or on behalf of the Borrower, and no further approvals or filings of any kind, including any approval of or filing with
any Governmental Authority, are required by or on behalf of the Borrower as a condition to the valid execution, delivery and performance by the Borrower of this Agreement or any of the other Loan Documents. 
  
 (d) Valid and Binding Obligations. This Agreement and
the other Loan Documents have been duly authorized, executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors’ rights generally or by equitable principles or by the exercise
of discretion by any court. 
  
 (e)
Non-contravention; No Liens. Neither the execution and delivery of this Agreement and the other Loan Documents, nor the fulfillment of or compliance with the terms 

  

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and conditions of this Agreement and the other Loan Documents nor the performance of the Obligations: 
  
 (1) does or will conflict with or result in any breach or
violation of any Applicable Law enacted or issued by any Governmental Authority or other agency having jurisdiction over the Borrower, any of the Mortgaged Properties or any other portion of the Collateral or other assets of the Borrower, or any
judgment or order applicable to the Borrower or to which the Borrower, any of the Mortgaged Properties or other assets of the Borrower is subject; 
  
 (2) does or will conflict with or result in any material breach or violation of, or constitute a default under, any of the terms,
conditions or provisions of the Borrower’s Organizational Documents, any indenture, existing agreement or other instrument to which the Borrower is a party or to which the Borrower, any of the Mortgaged Properties or any other portion of the
Collateral or other assets of the Borrower is subject; 
  
 (3) does or will result in or require the creation of any Lien on all or any portion of the Collateral or any of the Mortgaged Properties, except for the Permitted Liens; or 
  
 (4) does or will require the consent or approval of any creditor of the Borrower, any Governmental Authority
or any other Person except such consents or approvals which have already been obtained. 
  
 (f) Pending Litigation or other Proceedings. There is no pending or, to the best knowledge of the Borrower, threatened action,
suit, proceeding or investigation, at law or in equity, before any court, board, body or official of any Governmental Authority or arbitrator against or affecting any Mortgaged Property or any other portion of the Collateral or other assets of the
Borrower, which, if decided adversely to the Borrower, would have, or may reasonably be expected to have, a Material Adverse Effect. The Borrower is not in default with respect to any order of any Governmental Authority. 
  
 (g) Solvency. The Borrower is not insolvent and will
not be rendered insolvent by the transactions contemplated by this Agreement or the other Loan Documents and after giving effect to such transactions, the Borrower will not be left with an unreasonably small amount of capital with which to engage in
its business or undertakings, nor will the Borrower has incurred, have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Borrower did not receive less than a reasonably equivalent
value in exchange for incurrence of the Obligations. There (i) is no contemplated, pending or, to the best of the Borrower’s knowledge, threatened bankruptcy, reorganization, receivership, insolvency or like proceeding, whether voluntary or
involuntary, affecting the Borrower or any of the Mortgaged Properties and (ii) has been no assertion or exercise of jurisdiction over the Borrower or any of the Mortgaged Properties by any court empowered to exercise bankruptcy powers. 

 

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 (h) No Contractual Defaults. There are no defaults by the Borrower or, to the
knowledge of the Borrower, by any other Person under any contract to which the Borrower is a party relating to any Mortgaged Property, including any management, rental, service, supply, security, maintenance or similar contract, other than defaults
which do not have, and are not reasonably expected to have, a Material Adverse Effect. Neither the Borrower nor, to the knowledge of the Borrower, any other Person, has received notice or has any knowledge of any existing circumstances in respect of
which it could receive any notice of default or breach in respect of any contracts affecting or concerning any Mortgaged Property. 
  
 (i) Compliance with the Loan Documents. The Borrower is in compliance with all provisions of the Loan Documents to which it is a
party or by which it is bound. The representations and warranties made by the Borrower in the Loan Documents are true, complete and correct as of the Closing Date and do not contain any untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
  
 (j) ERISA. 
  

1. The Borrower is not an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 Code of Federal Regulations (“C.F.R.”) Section 2510.3-101 or
the Advances from Lender to Borrower described hereunder are exempt from the restrictions of Section 406(a)(1)(A) through (D) of ERISA as well as from the taxes imposed by Section 4975(a) and (b) of the Internal Revenue Code of 1986, as amended
(“Code”), by reason of Department of Labor Prohibited Transaction Exemption 96-23 (“INHAM Exemption”). 
  
 2. The Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA. 
  
 3. The Borrower and transactions with the Borrower are not subject to state
statutes regulating investments and fiduciary obligations with respect to governmental plans. 
  
 4. One or more of the following circumstances is/are true: 
  
 (i) Equity interests in the Borrower are publicly offered securities within the meaning of 29 C.F.R. Section 2510.3-101(b)(2). 

 
 (ii) Less than twenty-five percent (25%) of all equity
interests in the Borrower are held by “benefit plan investors” within the meaning of 29 C.F.R. Section 2510.3-101(f)(2). 
  
 (iii) The Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29
C.F.R. Section 2510.3-101(c) or (e). 
  

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 (iv) The Advances are exempt from the restrictions of Section 406(a)(1)(A) through (D) of
ERISA as well as from the taxes imposed by Section 4975(a) and (b) of the Code. 
  
 (k) Financial Information. The financial projections relating to the Borrower and delivered to the Lender on or prior to the date
hereof, if any, were prepared on the basis of assumptions believed by the Borrower, in good faith at the time of preparation, to be reasonable and the Borrower is not aware of any fact or information that would lead it to believe that such
assumptions are incorrect or misleading in any material respect; provided, however, that no representation or warranty is made that any result set forth in such financial projections shall be achieved. The financial statements of the Borrower which
have been furnished to the Lender are complete and accurate in all material respects and present fairly the financial condition of the Borrower, as of its date in accordance with GAAP, applied on a consistent basis, and since the date of the most
recent of such financial statements no event has occurred which would have, or may reasonably be expected to have a Material Adverse Effect, and there has not been any material transaction entered into by the Borrower other than transactions in the
ordinary course of business. The Borrower has no material contingent obligations which are not otherwise disclosed in its most recent financial statements. 
  
 (l) Accuracy of Information. No information, statement or report furnished in writing to the Lender by the Borrower in connection
with this Agreement or any other Loan Document or in connection with the consummation of the transactions contemplated hereby and thereby contains any material misstatement of fact or omits to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not misleading; and the representations and warranties of the Borrower and the statements, information and descriptions contained in the Borrower’s closing
certificates, as of the Closing Date, are true, correct and complete in all material respects, do not contain any untrue statement or misleading statement of a material fact, and do not omit to state a material fact required to be stated therein or
necessary to make the certifications, representations, warranties, statements, information and descriptions contained therein, in light of the circumstances under which they were made, not misleading; and the estimates and the assumptions contained
herein and in any certificate of the Borrower delivered as of the Closing Date are reasonable and based on the best information available to the Borrower. 
  
 (m) No Conflicts of Interest. To the best knowledge of the Borrower, no member, officer, agent or employee of the Lender has been
or is in any manner interested, directly or indirectly, in that Person’s own name, or in the name of any other Person, in the Loan Documents, the Borrower or any Mortgaged Property, in any contract for property or materials to be furnished or
used in connection with such Mortgaged Property or in any aspect of the transactions contemplated by the Loan Documents. 
  
 (n) Governmental Approvals. No Governmental Approval not already obtained or made is required for the execution and delivery of
this Agreement or any other Loan Document or the performance of the terms and provisions hereof or thereof by the Borrower. 
  
 (o) Governmental Orders. The Borrower is not presently under any cease or desist order or other orders of a similar nature,
temporary or permanent, of any Governmental 

  

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Authority which would have the effect of preventing or hindering performance of its duties hereunder, nor are there any proceedings presently in progress or
to its knowledge contemplated which would, if successful, lead to the issuance of any such order. 
  
 (p) No Reliance. The Borrower acknowledges, represents and warrants that it understands the nature and structure of the
transactions contemplated by this Agreement and the other Loan Documents, that it is familiar with the provisions of all of the documents and instruments relating to such transactions; that it understands the risks inherent in such transactions,
including the risk of loss of all or any of the Mortgaged Properties; and that it has not relied on the Lender or Fannie Mae for any guidance or expertise in analyzing the financial or other consequences of the transactions contemplated by this
Agreement or any other Loan Document or otherwise relied on the Lender or Fannie Mae in any manner in connection with interpreting, entering into or otherwise in connection with this Agreement, any other Loan Document or any of the matters
contemplated hereby or thereby. 
  
 (q)
Compliance with Applicable Law. The Borrower is in compliance with Applicable Law, including all Governmental Approvals, if any, except for such items of noncompliance that, singly or in the aggregate, have not had and are not reasonably
expected to cause, a Material Adverse Effect. 
  
 (r) Contracts with Affiliates. Except as otherwise approved in writing by the Lender, the Borrower has not entered into and is not a party to any contract, lease or other agreement with any Affiliate of the Borrower for the provision
of any service, materials or supplies to any Mortgaged Property (including any contract, lease or agreement for the provision of property management services, cable television services or equipment, gas, electric or other utilities, security
services or equipment, laundry services or equipment or telephone services or equipment). The Lender hereby approves the property management agreements set forth on Exhibit AA to this Agreement. 
  
 (s) Lines of Business. The Borrower is not engaged in
any businesses other than the acquisition, ownership, development, construction, leasing, financing or management of Multifamily Residential Properties, and the conduct of these businesses does not violate the Organizational Documents pursuant to
which it is formed. 
  
 (t) Status as a Real
Estate Investment Trust. The REIT is qualified, and is taxed as, a real estate investment trust under Subchapter M of the Internal Revenue Code, and is not engaged in any activities which would jeopardize such qualification and tax treatment.

  
 SECTION 12.02 Representations and Warranties of the Borrower. The
Borrower hereby represents and warrants to the Lender as follows with respect to each of the Mortgaged Properties: 
  
 (a) Title. The Borrower has good, valid, marketable and indefeasible title to each Mortgaged Property (either in fee simple or as
tenant under a ground lease meeting all of the requirements of the DUS Guide), free and clear of all Liens whatsoever except the Permitted Liens. Each Security Instrument, if and when properly recorded in the appropriate records, together with any
Uniform Commercial Code financing statements required to be filed in 

  

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connection therewith, will create a valid, perfected first lien on the Mortgaged Property intended to be encumbered thereby (including the Leases related to
such Mortgaged Property and the rents and all rights to collect rents under such Leases), subject only to Permitted Liens. Except for any Permitted Liens, there are no Liens or claims for work, labor or materials affecting any Mortgaged Property
which are or may be prior to, subordinate to, or of equal priority with, the Liens created by the Loan Documents. The Permitted Liens do not have, and may not reasonably be expected to have, a Material Adverse Effect. 
  
 (b) Impositions. The Borrower has filed all property
and similar tax returns required to have been filed by it with respect to each Mortgaged Property and has paid and discharged, or caused to be paid and discharged, all installments for the payment of all Taxes due to date, and all other material
Impositions imposed against, affecting or relating to each Mortgaged Property other than those which have not become due, together with any fine, penalty, interest or cost for nonpayment pursuant to such returns or pursuant to any assessment
received by it, provided, however, that if the Borrower contests in good faith and by appropriate proceeding the validity or applicability of any Imposition, provides to the Lender security in such amount and in such form as the Lender may
reasonably require, then compliance with the Imposition in question shall be suspended during the pendency of such contest. The Borrower has no knowledge of any new proposed Tax, levy or other governmental or private assessment or charge in respect
of any Mortgaged Property which has not been disclosed in writing to the Lender. 
  
 (c) Zoning. Each Mortgaged Property complies in all material respects with all Applicable Laws affecting such Mortgaged Property.
Without limiting the foregoing, all material Permits, including certificates of occupancy, to the extent issued by the relevant jurisdiction, have been issued and are in full force and effect. Neither the Borrower nor, to the knowledge of the
Borrower, any former owner of any Mortgaged Property, has received any written notification or threat of any actions or proceedings regarding the noncompliance or nonconformity of any Mortgaged Property with any Applicable Laws or Permits, nor is
the Borrower otherwise aware of any such pending actions or proceedings. 
  
 (d) Leases. The Borrower has delivered to the Lender a true and correct copy of their form apartment lease for each Mortgaged Property (and, with respect to leases executed prior to the date on which the
Borrower first owned the Mortgaged Property, the form apartment lease used for such leases), and each Lease with respect to such Mortgaged Property is in the form thereof, with no material modifications thereto, except as previously disclosed in
writing to the Lender. Except as set forth in a Rent Roll, no Lease for any unit in any Mortgaged Property (i) is for a term in excess of one year, including any renewal or extension period unless such renewal or extension period is subject to
termination by the Borrower upon not more than 30 days’ written notice, (ii) provides for prepayment of more than one month’s rent, or (iii) was entered into in other than the ordinary course of business. 
  
 (e) Rent Roll. The Borrower has executed and
delivered to the Lender a Rent Roll for each Mortgaged Property, each dated as of and delivered within 30 days prior to the Closing Date. Each Rent Roll sets forth each and every unit subject to a Lease which is in full force and effect as of the
date of such Rent Roll. The information set forth on each Rent Roll is true, correct and complete in all material respects as of its date and there has occurred no 

  

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material adverse change in the information shown on any Rent Roll from the date of each such Rent Roll to the Closing Date. Except as disclosed in the Rent
Roll with respect to each Mortgaged Property or otherwise previously disclosed in writing to the Lender, no Lease is in effect as of the date of the Rent Roll with respect to such Mortgaged Property. 
  
 (f) Status of Landlord under Leases. Except for any
assignment of leases and rents which is a Permitted Lien or which is to be released in connection with the consummation of the transactions contemplated by this Agreement, the Borrower is the owner and holder of the landlord’s interest under
each of the Leases of units in each Mortgaged Property and there are no prior outstanding assignments of any such Lease, or any portion of the rents, additional rents, charges, issues or profits due and payable or to become due and payable
thereunder. 
  
 (g) Enforceability of
Leases. Each Lease constitutes the legal, valid and binding obligation of the Borrower and, to the knowledge of the Borrower, of each of the other parties thereto, enforceable in accordance with its terms, subject only to bankruptcy, insolvency,
reorganization or other similar laws relating to creditors’ rights generally, and equitable principles, and except as disclosed in writing to the Lender, no notice of any default by the Borrower which remains uncured has been sent by any tenant
under any such Lease, other than defaults which do not have, and are not reasonably expected to have, a Material Adverse Effect on the Mortgaged Property subject to the Lease. 
  
 (h) No Lease Options. All premises demised to tenants under Leases are occupied by such tenants as
tenants only. No Lease contains any option or right to purchase, right of first refusal or any other similar provisions. No option or right to purchase, right of first refusal, purchase contract or similar right exists with respect to any Mortgaged
Property. 
  
 (i) Insurance. The Borrower
has delivered to the Lender true and correct certified copies of all Insurance Policies currently in effect as of the date of this Agreement with respect to the Mortgaged Property which it owns. Each such Insurance Policy complies in all material
respects with the requirements set forth in the Loan Documents. 
  
 (j) Tax Parcels. Each Mortgaged Property is on one or more separate tax parcels, and each such parcel (or parcels) is (or are) separate and apart from any other property. 
  
 (k) Encroachments. Except as disclosed on the Survey
with respect to each Mortgaged Property, none of the improvements located on any Mortgaged Property encroaches upon the property of any other Person or upon any easement encumbering the Mortgaged Property, nor lies outside of the boundaries and
building restriction lines of such Mortgaged Property and no improvement located on property adjoining such Mortgaged Property lies within the boundaries of or in any way encroaches upon such Mortgaged Property. 
  
 (l) Independent Unit. Except for Permitted Liens and
as disclosed on Exhibit BB to this Agreement, or as disclosed in a Title Insurance Policy or Survey for the Mortgaged Property, each Mortgaged Property is an independent unit which does not rely on any drainage, sewer, access, parking,
structural or other facilities located on any Property not included either in such Mortgaged Property or on public or utility easements for the 

  

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(i) fulfillment of any zoning, building code or other requirement of any Governmental Authority that has jurisdiction over such Mortgaged Property, (ii)
structural support, or (iii) the fulfillment of the requirements of any Lease or other agreement affecting such Mortgaged Property. The Borrower, directly or indirectly, has the right to use all amenities, easements, public or private utilities,
parking, access routes or other items necessary or currently used for the operation of each Mortgaged Property. All public utilities are installed and operating at each Mortgaged Property and all billed installation and connection charges have been
paid in full. Each Mortgaged Property is either (x) contiguous to or (y) benefits from an irrevocable unsubordinated easement permitting access from such Mortgaged Property to a physically open, dedicated public street, and has all necessary permits
for ingress and egress and is adequately serviced by public water, sewer systems and utilities. No building or other improvement not located on a Mortgaged Property relies on any part of the Mortgaged Property to fulfill any zoning requirements,
building code or other requirement of any Governmental Authority that has jurisdiction over the Mortgaged Property, for structural support or to furnish to such building or improvement any essential building systems or utilities. 
  
 (m) Condition of the Mortgaged Properties. Except as
disclosed in any third party report delivered to the Lender prior to the date on which the Borrower’s Mortgaged Property is added to the Collateral Pool, or otherwise disclosed in writing by the Borrower to the Lender prior to such date, each
Mortgaged Property is in good condition, order and repair, there exist no structural or other material defects in such Mortgaged Property (whether patent or, to the best knowledge of the Borrower, latent or otherwise) and the Borrower has not
received notice from any insurance company or bonding company of any defects or inadequacies in such Mortgaged Property, or any part of it, which would adversely affect the insurability of such Mortgaged Property or cause the imposition of
extraordinary premiums or charges for insurance or of any termination or threatened termination of any policy of insurance or bond. No claims have been made against any contractor, architect or other party with respect to the condition of any
Mortgaged Property or the existence of any structural or other material defect therein. No Mortgaged Property has been materially damaged by casualty which has not been fully repaired or for which insurance proceeds have not been received or are not
expected to be received except as previously disclosed in writing to the Lender. There are no proceedings pending for partial or total condemnation of any Mortgaged Property except as disclosed in writing to the Lender. 
  
 SECTION 12.03 Representations and Warranties of the Lender. The Lender hereby
represents and warrants to the Borrower as follows: 
  
 (a) Due Organization. The Lender is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 
  
 (b) Power and Authority. The Lender has the requisite power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement. 
  
 (c) Due Authorization. The execution and delivery by the Lender of this Agreement, and the consummation by it of the transactions contemplated thereby, and the performance by it of its obligations thereunder,
have been duly and validly authorized by all necessary action and proceedings by it or on its behalf. 
  

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 ARTICLE XIII 
 AFFIRMATIVE COVENANTS OF THE BORROWER 
  
 The
Borrower agrees and covenants with the Lender that, at all times during the Term of this Agreement: 
  
 SECTION 13.01 Compliance with Agreements. The Borrower shall comply with all the terms and conditions of each Loan Document to which it is a party or by which it is bound; provided, however, that the
Borrower’s failure to comply with such terms and conditions shall not be an Event of Default until the expiration of the applicable notice and cure periods, if any, specified in the applicable Loan Document. 
  
 SECTION 13.02 Maintenance of Existence. The Borrower shall maintain its existence and
continue to be a limited partnership or corporation, as the case may be, organized under the laws of the state of its organization. The Borrower shall continue to be duly qualified to do business in each jurisdiction in which such qualification is
necessary to the conduct of its business and where the failure to be so qualified would adversely affect the validity of, the enforceability of, or the ability to perform, its obligations under this Agreement or any other Loan Document. 

 
 SECTION 13.03 Maintenance of REIT Status. During the Term of this Agreement, the
REIT shall qualify, and be taxed as, a real estate investment trust under Subchapter M of the Internal Revenue Code, and will not be engaged in any activities which would jeopardize such qualification and tax treatment. 
  
 SECTION 13.04 Financial Statements; Accountants’ Reports; Other Information. The
Borrower shall keep and maintain at all times complete and accurate books of accounts and records in sufficient detail to correctly reflect (x) all of the Borrower’s financial transactions and assets and (y) the results of the operation of each
Mortgaged Property and copies of all written contracts, Leases and other instruments which affect each Mortgaged Property (including all bills, invoices and contracts for electrical service, gas service, water and sewer service, waste management
service, telephone service and management services). In addition, the Borrower shall furnish, or cause to be furnished, to the Lender: 
  
 (a) Annual Financial Statements. As soon as available, and in any event within 90 days after the close of its fiscal year during
the Term of this Agreement, the audited balance sheet of the REIT and its Subsidiaries as of the end of such fiscal year, the audited statement of income, equity and retained earnings of the REIT and its Subsidiaries for such fiscal year and the
audited statement of cash flows of the REIT and its Subsidiaries for such fiscal year, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the prior fiscal year, prepared in
accordance with GAAP, consistently applied, and accompanied by a certificate of the REIT’s independent certified public accountants to the effect that such financial statements have been prepared in accordance with GAAP, consistently applied,
and that such financial statements fairly present the results of its operations and financial condition for the periods and dates indicated, with such certification to be free of exceptions and qualifications as to the scope of the audit or as to
the going concern nature of the business. 
  

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

  
 (c) Quarterly Property Statements. As
soon as available, and in any event within 45 days after each Calendar Quarter, a statement of income and expenses of each Mortgaged Property accompanied by a certificate of the Chief Financial Officer of the REIT to the effect that each such
statement of income and expenses fairly, accurately and completely presents the operations of each such Mortgaged Property for the period indicated. 
  
 (d) Annual Property Statements. On an annual basis within forty-five (45) days of the end of its fiscal year, an annual statement
of income and expenses of each Mortgaged Property accompanied by a certificate of the Chief Financial Officer of the REIT to the effect that each such statement of income and expenses fairly, accurately and completely presents the operations of each
such Mortgaged Property for the period indicated. 
  
 (e) Updated Rent Rolls. Upon the Lender’s request (but not more frequently than quarterly), a current Rent Roll for each Mortgaged Property, showing the name of each tenant, and for each tenant, the space occupied, the lease
expiration date, the rent payable, the rent paid and any other information requested by the Lender and accompanied by a certificate of the Chief Financial Officer of the REIT to the effect that each such Rent Roll fairly, accurately and completely
presents the information required therein. 
  
 (f) Security Deposit Information. Upon the Lender’s request, an accounting of all security deposits held in connection with any Lease of any part of any Mortgaged Property, including the name and identification number of the
accounts in which such security deposits are held, the name and address of the financial institutions in which such security deposits are held and the name and telephone number of the person to contact at such financial institution, along with any
authority or release necessary for the Lender to access information regarding such accounts. 
  
 (g) Security Law Reporting Information. So long as the REIT is a reporting company under the Securities and Exchange Act of 1934,
promptly upon becoming available, (a) copies of all financial statements, reports and proxy statements sent or made available generally by the Borrower, or any of its Affiliates, to their respective security holders, (b) all regular and periodic
reports and all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or a similar form) and prospectuses, if any, filed by the Borrower, or any of its Affiliates, with the Securities and Exchange
Commission or other 

  

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Governmental Authorities, and (c) all statements made available generally by the Borrower, or any of their Affiliates, to the public concerning material
developments in the business of the REIT or other party. 
  
 (h) Accountants’ Reports. Promptly upon receipt thereof, copies of any reports or management letters submitted to the Borrower by its independent certified public accountants in connection with the
examination of its financial statements made by such accountants (except for reports otherwise provided pursuant to subsection (a) above); provided, however, that the Borrower shall only be required to deliver such reports and management letters to
the extent that they relate to the Borrower or any Mortgaged Property. 
  
 (i) Annual Budgets. Promptly, and in any event within 60 days after the start of its fiscal year, an annual budget for each Mortgaged Property for such fiscal year, setting forth an estimate of all of the costs
and expenses, including capital expenses, of maintaining and operating each Mortgaged Property. 
  
 (j) REIT Plans and Projections. If prepared by the REIT, within 90 days after the beginning of each fiscal year, copies of (1) the
REIT’s business plan for the current and the succeeding two fiscal years, (2) the REIT’s annual budget (including capital expenditure budgets) and projections for each Mortgaged Property; and (3) the REIT’s financial projections for
the current and the succeeding two fiscal years, as prepared by the REIT’s Chief Financial Officer and in a format and with such detail as the Lender may require. 
  
 (k) Strategic Plan. Within 90 days after the end of each fiscal year of the REIT, the REIT shall
deliver to the Lender a written narrative discussing the REIT’s publicly disclosed short and long range plans, including its plans for operations, mergers, acquisitions and management, and accompanied by supporting financial projections and
schedules, certified by a member of Senior Management as true, correct and complete (“Strategic Plan”) If the REIT’s or the Borrower’s Strategic Plan materially changes, then such person shall deliver to the Lender the
Strategic Plan as so changed. 
  
 (l) Annual
Rental and Sales Comparable Analysis. Within 30 days after the Lender’s request, a rental and sales comparable analysis of the local real estate market in which each Mortgaged Property is located, in a form approved by the Lender.

  
 (m) Federal Tax Returns. Upon request
of Lender, the Federal Tax Returns of the REIT. 
  
 (n) Other Reports. Promptly upon receipt thereof, all schedules, financial statements or other similar reports delivered by the Borrower pursuant to the Loan Documents or requested by the Lender with respect to the Borrower’s
business affairs or condition (financial or otherwise) or any of the Mortgaged Properties. 
  
 (o) Certification. All certifications required to be delivered pursuant to this Section 13.04 shall run directly to and be for the
benefit of Lender and Fannie Mae. 
  
 SECTION 13.05 Certificate of
Compliance. The Borrower shall deliver to the Lender concurrently with the delivery of the financial statements and/or reports required to be delivered 

  

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pursuant to Section 13.04 (a) and (b) above a certificate signed by the Chief Financial Officer of the REIT stating that, to the best knowledge of such
individual following reasonable inquiry, (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 15.02 through 15.08 on the date of such financial
statements, and (ii) stating that, to the best knowledge of such individual following reasonable inquiry, no Event of Default or Potential Event of Default has occurred, or if an Event of Default or Potential Event of Default has occurred,
specifying the nature thereof in reasonable detail and the action which the Borrower is taking or proposes to take with respect thereto. Any certificate required by this Section 13.05 shall run directly to and be for the benefit of Lender and Fannie
Mae. 
  
 SECTION 13.06 Maintain Licenses. The Borrower shall procure and
maintain in full force and effect all licenses, Permits, charters and registrations which are material to the conduct of its business and shall abide by and satisfy all terms and conditions of all such licenses, Permits, charters and registrations.

  
 SECTION 13.07 Access to Records; Discussions With Officers and
Accountants. To the extent permitted by law and in addition to the applicable requirements of the Security Instruments, the Borrower shall permit the Lender: 
  
 (a) to inspect, make copies and abstracts of, and have reviewed or audited, such of the Borrower’s
books and records as may relate to the Obligations or any Mortgaged Property; 
  
 (b) to discuss the Borrower’s affairs, finances and accounts with the Borrower’s officers, partners and employees; 
  
 (c) to discuss the Mortgage Properties’ conditions, operations or maintenance with the managers of such Mortgaged Properties and the
officers and employees of the Borrower; 
  
 (d)
to discuss the Borrower’s affairs, finances and accounts with its independent public accountants; and 
  
 (e) to receive any other information that the Lender deems reasonably necessary or relevant in connection with any Advance, any Loan
Document or the Obligations. 
  
 Notwithstanding the foregoing, prior to an Event
of Default or Potential Event of Default and in the absence of an emergency, all inspections shall be conducted at reasonable times during normal business hours upon reasonable notice to the Borrower. 
  
 SECTION 13.08 Inform the Lender of Material Events. The Borrower shall promptly inform
the Lender in writing of any of the following (and shall deliver to the Lender copies of any related written communications, complaints, orders, judgments and other documents relating to the following) of which the Borrower has actual knowledge:

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

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 (b) Regulatory Proceedings. The commencement of any rulemaking or disciplinary
proceeding or the promulgation of any proposed or final rule which would have, or may reasonably be expected to have, a Material Adverse Effect; 
  
 (c) Legal Proceedings. The commencement or threat of, or amendment to, any proceedings by or against the Borrower in any Federal,
state or local court or before any Governmental Authority, or before any arbitrator, which, if adversely determined, would have, or at the time of determination may reasonably be expected to have, a Material Adverse Effect; 
  
 (d) Bankruptcy Proceedings. The commencement of any
proceedings by or against the Borrower under any applicable bankruptcy, reorganization, liquidation, insolvency or other similar law now or hereafter in effect or of any proceeding in which a receiver, liquidator, trustee or other similar official
is sought to be appointed for it; 
  
 (e)
Regulatory Supervision or Penalty. The receipt of notice from any Governmental Authority having jurisdiction over the Borrower that (A) the Borrower is being placed under regulatory supervision, (B) any license, Permit, charter, membership or
registration material to the conduct of the Borrower’s business or the Mortgaged Properties is to be suspended or revoked or (C) the Borrower is to cease and desist any practice, procedure or policy employed by the Borrower, as the case may be,
in the conduct of its business, and such cessation would have, or may reasonably be expected to have, a Material Adverse Effect; 
  
 (f) Environmental Claim. The receipt from any Governmental Authority or other Person of any notice of violation, claim, demand,
abatement, order or other order or direction (conditional or otherwise) for any damage, including personal injury (including sickness, disease or death), tangible or intangible property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, pollution, contamination or other adverse effects on the environment, removal, cleanup or remedial action or for fines, penalties or restrictions, resulting from or based upon (a) the existence or occurrence, or
the alleged existence or occurrence, of a Hazardous Substance Activity or (b) the violation, or alleged violation, of any Hazardous Materials Laws in connection with any Mortgaged Property or any of the other assets of the Borrower; 
  
 (g) Material Adverse Effects. The occurrence of any
act, omission, change or event which has a Material Adverse Effect, subsequent to the date of the most recent audited financial statements of the Borrower delivered to the Lender pursuant to Section 13.04; 
  
 (h) Accounting Changes. Any material change in the
Borrower’s accounting policies or financial reporting practices; 
  
 (i) Legal and Regulatory Status. The occurrence of any act, omission, change or event, including any Governmental Approval, the result of which is to change or alter in any way the legal or regulatory status of
the Borrower; and 
  
 (j) Default on
Indebtedness. The occurrence of any event that results in or could result in (i) any imminent default, default or waiver of default in respect of any Indebtedness having an unpaid principal balance of $1,000,000 or more, (ii) the failure of the
Borrower to pay when due or within any applicable grace period any Indebtedness of the 

  

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Borrower, or (iii) any Indebtedness of the Borrower becoming due and payable before its normal maturity by reason of a default or event of default, however
described, or any other event of default shall occur and continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness. 
  
 SECTION 13.09 Intentionally Omitted. 
  
 SECTION 13.10 Inspection. The Borrower shall permit any Person designated by the Lender: (i) to make entries upon and inspections of the Mortgaged Properties; and
(ii) to otherwise verify, examine and inspect the amount, quantity, quality, value and/or condition of, or any other matter relating to, any Mortgaged Property; provided, however, that prior to an Event of Default or Potential Event of
Default and in the absence of an emergency, all such entries, examinations and inspections shall be conducted at reasonable times during normal business hours upon reasonable notice to the Borrower. 
  
 SECTION 13.11 Compliance with Applicable Laws. The Borrower shall comply in all
material respects with all Applicable Laws now or hereafter affecting any Mortgaged Property or any part of any Mortgaged Property or requiring any alterations, repairs or improvements to any Mortgaged Property. The Borrower shall procure and
continuously maintain in full force and effect, and shall abide by and satisfy all material terms and conditions of all Permits. 
  
 SECTION 13.12 Warranty of Title. The Borrower shall warrant and defend (a) the title to each Mortgaged Property and every part of each Mortgaged Property, subject
only to Permitted Liens, and (b) the validity and priority of the lien of the applicable Loan Documents, subject only to Permitted Liens, in each case against the claims of all Persons whatsoever. The Borrower shall reimburse the Lender for any
losses, costs, damages or expenses (including reasonable attorneys’ fees and court costs) incurred by the Lender if an interest in any Mortgaged Property, other than with respect to a Permitted Lien, is claimed by others. 
  
 SECTION 13.13 Defense of Actions. The Borrower shall appear in and defend any action
or proceeding purporting to affect the security for this Agreement or the rights or power of the Lender hereunder, and shall pay all costs and expenses, including the cost of evidence of title and reasonable attorneys’ fees, in any such action
or proceeding in which the Lender may appear. If the Borrower fails to perform any of the covenants or agreements contained in this Agreement, or if any action or proceeding is commenced that is not diligently defended by the Borrower which affects
in any material respect the Lender’s interest in any Mortgaged Property or any part thereof, including eminent domain, code enforcement or proceedings of any nature whatsoever under any Applicable Law, whether now existing or hereafter enacted
or amended, then the Lender may, but without obligation to do so and without notice to or demand upon the Borrower and without releasing the Borrower from any Obligation, make such appearances, disburse such sums and take such action as the Lender
deems necessary or appropriate to protect the Lender’s interest, including disbursement of attorney’s fees, entry upon such Mortgaged Property to make repairs or take other action to protect the security of said Mortgaged Property, and
payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Lender appears to be prior or superior to the Loan Documents. In the event (i) that any Security Instrument is foreclosed in whole or in part or
that any Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, or (ii) of the foreclosure 

  

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of any mortgage, deed to secure debt, deed of trust or other security instrument prior to or subsequent to any Security Instrument or any Loan Document in
which proceeding the Lender is made a party or (iii) of the bankruptcy of the Borrower or an assignment by the Borrower for the benefit of their respective creditors, the Borrower shall be chargeable with and agrees to pay all reasonable costs of
collection and defense, including actual attorneys’ fees in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, which shall be due and payable together with all required service or use
taxes. 
  
 SECTION 13.14 Alterations to the Mortgaged Properties. Except as
otherwise provided in the Loan Documents, the Borrower shall have the right to undertake any alteration, improvement, demolition, removal or construction (collectively, “Alterations”) to the Mortgaged Property which it owns without
the prior consent of the Lender; provided, however, that in any case, no such Alteration shall be made to any Mortgaged Property without the prior written consent of the Lender if (i) such Alteration could reasonably be expected to adversely
affect the value of such Mortgaged Property or its operation as a multifamily housing facility in substantially the same manner in which it is being operated on the date such property became Collateral, (ii) the construction of such Alteration could
reasonably be expected to result in interference to the occupancy of tenants of such Mortgaged Property such that tenants in occupancy with respect to five percent (5%) or more of the Leases would be permitted to terminate their Leases or to abate
the payment of all or any portion of their rent, or (iii) such Alteration will be completed in more than 12 months from the date of commencement or in the last year of the Term of this Agreement. Notwithstanding the foregoing, the Borrower must
obtain the Lender’s prior written consent to construct Alterations with respect to the Mortgaged Property costing in excess of, with respect to any Mortgaged Property, the number of units in such Mortgaged Property multiplied by $2,000, but in
any event, costs in excess of $350,000 and the Borrower must give prior written notice to the Lender of its intent to construct Alterations with respect to such Mortgaged Property costing in excess of $150,000; provided, however, that the preceding
requirements shall not be applicable to Alterations made, conducted or undertaken by the Borrower as part of the Borrower’s routine maintenance and repair of the Mortgaged Properties as required by the Loan Documents. 
  
 SECTION 13.15 ERISA. The Borrower Party shall at all times remain in compliance in all
material respects with all applicable provisions of ERISA, similar requirements of the PBGC, and the provisions set forth in Section 12.01(j) of this Agreement. 
  

SECTION 13.16 Loan Document Taxes. If any tax, assessment or Imposition (other than a franchise tax or excise tax imposed on or measured by, the net income or
capital (including branch profits tax) of the Lender (or any transferee or assignee thereof, including a participation holder)) (“Loan Document Taxes”) is levied, assessed or charged by the United States, or any State in the United
States, or any political subdivision or taxing authority thereof or therein upon any of the Loan Documents or the obligations secured thereby, the interest of the Lender in the Mortgaged Properties, or the Lender by reason of or as holder of the
Loan Documents, the Borrower shall pay all such Loan Document Taxes to, for, or on account of the Lender (or provide funds to the Lender for such payment, as the case may be) as they become due and payable and shall promptly furnish proof of such
payment to the Lender, as applicable. In the event of passage of any law or regulation permitting, authorizing or requiring such Loan Document Taxes to be levied, assessed or charged, which law or regulation in the opinion of 

  

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counsel to the Lender may prohibit the Borrower from paying the Loan Document Taxes to or for the Lender, the Borrower shall enter into such further
instruments as may be permitted by law to obligate the Borrower to pay such Loan Document Taxes. 
  
 SECTION 13.17 Further Assurances. The Borrower, at the request of the Lender, shall execute and deliver and, if necessary, file or record such statements, documents, agreements, UCC financing and continuation
statements and such other instruments and take such further action as the Lender from time to time may request as reasonably necessary, desirable or proper to carry out more effectively the purposes of this Agreement or any of the other Loan
Documents or to subject the Collateral to the lien and security interests of the Loan Documents or to evidence, perfect or otherwise implement, to assure the lien and security interests intended by the terms of the Loan Documents or in order to
exercise or enforce its rights under the Loan Documents. 
  
 SECTION 13.18
Monitoring Compliance. Upon the request of the Lender, from time to time, the Borrower shall promptly provide to the Lender such documents, certificates and other information as may reasonably be deemed necessary to enable the Lender to
perform its functions under the Servicing Agreement. 
  
 SECTION 13.19
Leases. Each unit in each Mortgaged Property will be leased pursuant to the form lease delivered to, and acceptable to, the Lender, with no material modifications to such approved form lease, except as disclosed in writing to the Lender.

  
 SECTION 13.20 Intentionally Omitted. 
  
 SECTION 13.21 Transfer of Ownership Interests of the Borrower. 
  
 (a) Prohibition on Transfers. Subject to paragraph
(b) of this Section 13.21, the Borrower shall not cause or permit a Transfer or a Change of Control. 
  
 (b) Permitted Transfers. Notwithstanding the provisions (a) of this Section 13.21, the following Transfers by the Borrower is
permitted without the consent of the Lender: 
  
 (i) A Transfer that occurs by inheritance, devise, or bequest or by operation of law upon the death of a natural person who is an owner of a Mortgaged Property or the owner of a direct or indirect ownership interest in the Borrower.

  
 (ii) The grant of a leasehold interest in
individual dwelling units or commercial spaces in accordance with the Security Instrument. 
  
 (iii) A sale or other disposition of obsolete or worn out personal property which is contemporaneously replaced by comparable personal
property of equal or greater value which is free and clear of liens, encumbrances and security interests other than those created by the Loan Documents. 
  
 (iv) The creation of a mechanic’s or materialmen’s lien or judgment lien against a Mortgaged Property which is released of
record or otherwise remedied to Lender’s satisfaction within 30 days of the date of creation. 
  

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 (v) The grant of an easement, if prior to the granting of the easement the Borrower
causes to be submitted to Lender all information required by Lender to evaluate the easement, and if Lender consents to such easement based upon Lender’s determination that the easement will not materially affect the operation of the Mortgaged
Property or Lender’s interest in the Mortgaged Property and Borrower pays to Lender, on demand, all reasonable costs and expenses incurred by Lender in connection with reviewing Borrower’s request. Lender shall not unreasonably withhold
its consent to or withhold its agreement to subordinate the lien of a Security Instrument to (A) the grant of a utility easement serving a Mortgaged Property to a publicly operated utility, or (B) the grant of an easement related to expansion or
widening of roadways, provided that any such easement is in form and substance reasonably acceptable to Lender and does not materially and adversely affect the access, use or marketability of a Mortgaged Property. 
  
 (vi) The Transfer of shares of common stock, limited
partnership interests or other beneficial or ownership interest or other forms of securities in the REIT or the OP, and the issuance of all varieties of convertible debt, equity and other similar securities of the REIT or the OP, and the subsequent
Transfer of such securities; provided, however, that no Change in Control occurs as a result of such Transfer, either upon such Transfer or upon the subsequent conversion to equity or such convertible debt or other securities. 
  
 (vii) The Transfer of limited partnership interests by the
limited partners of Borrower, including, without limitation, the conversion or exchange of limited partnership interests in Borrower to shares of common stock or other beneficial or ownership interests or other forms of securities in the REIT;
provided, however, that no Change in Control occurs as the result of such Transfer. 
  
 (viii) The issuance by Borrower of additional limited partnership units or convertible debt, equity and other similar securities, and the
subsequent Transfer of such units or other securities; provided, however, that no Change in Control occurs as the result of such Transfer, either upon such Transfer or upon the subsequent conversion to equity of such convertible debt or other
securities. 
  
 (ix) A merger with or acquisition
of another entity by Borrower, provided that (A) Borrower is the surviving entity after such merger or acquisition, (B) no Change in Control occurs, and (C) such merger or acquisition does not result in an Event of Default, as such terms are defined
in this Agreement. 
  
 (x) A Transfer in
connection with any substitution or release pursuant to the terms and conditions of Article VII of this Agreement. 
  

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 (c) Consent to Prohibited Transfers. Lender may, in its sole and absolute
discretion, consent to a Transfer that would otherwise violate this Section 13.21 if, prior to the Transfer, Borrower has satisfied each of the following requirements: 
  
 (i) the submission to Lender of all information required by Lender to make the determination required by
this Section 13.21(c); 
  
 (ii) the absence of
any Event of Default; 
  
 (iii) the transferee
meets all of the eligibility, credit, management and other standards (including any standards with respect to previous relationships between Lender and the transferee and the organization of the transferee) customarily applied by Lender at the time
of the proposed Transfer to the approval of Borrower in connection with the origination or purchase of similar mortgages, deeds of trust or deeds to secure debt on multifamily properties; 
  
 (iv) in the case of a Transfer of direct or indirect
ownership interests in Borrower, if transferor or any other person has obligations under any Loan Documents, the execution by the transferee of one or more individuals or entities acceptable to Lender of an assumption agreement that is acceptable to
Lender and that, among other things, requires the transferee to perform all obligations of transferor or such person set forth in such Loan Document, and may require that the transferee comply with any provisions of this Instrument or any other Loan
Document which previously may have been waived by Lender; 
  
 (v) Lender’s receipt of all of the following: 
  
 (A) a transfer fee equal to 1 percent of the Commitment immediately prior to the transfer. 
  
 (B) In addition, Borrower shall be required to reimburse
Lender for all of Lender’s reasonable out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Transfer request. 
  
 SECTION 13.22 Change in Senior Management. 
  
 (a) The Borrower shall give the Lender notice of any change in the identity of Senior Management. 
  
 (b) Within 30 Business Days after receipt of the
Borrower’s notice, the Lender shall have the right to terminate this Agreement and the Credit Facility by giving a notice of such termination to the Borrower. In such event, this Agreement and the Credit Facility shall terminate with the same
effect as if the Lender had approved a Credit Facility Termination Request (including the Borrower’s obligation, pursuant to Section 10.03(a), to pay in full all of the Notes Outstanding on the Closing Date, including any other charges under
the Notes), except that, for these purposes, the Closing Date shall be the 180th day after the date on which the Borrower first receives the Lender’s termination notice. 
  
 (c) If the Lender exercises its termination right pursuant to subsection (b), the Borrower shall have a
period of 120 days, commencing with the date on which the Borrower receives the Lender’s termination notice, to request that the Lender rescind its termination notice. The Borrower may include in its request any undertakings which it is willing
to make in 

  

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order to obtain such a rescission. The Lender shall give the Borrower notice of its acceptance or rejection of the Borrower’s request within 30 Business
Days after the Borrower makes the request. If the Lender accepts the request, the Lender shall give the Borrower a notice that the termination notice shall be deemed rescinded and of no further force or effect, and this Agreement and the Credit
Facility shall continue in accordance with, and subject to the terms, conditions and limitations contained in, this Agreement. 
  
 SECTION 13.23 Date-Down Endorsements. At any time and from time to time, a Lender may obtain an endorsement to each Title Insurance Policy containing a Revolving
Credit Endorsement, amending the effective date of the Title Insurance Policy to the date of the title search performed in connection with the endorsement. The Borrower shall pay for the cost and expenses incurred by the Lender to the Title Company
in obtaining such endorsement, provided that, for each Title Insurance Policy, it shall not be liable to pay for more than one such endorsement in any consecutive 12 month period. 
  
 SECTION 13.24 Geographical Diversification. The Borrower shall maintain Mortgaged Properties in the Collateral Pool so that the
Collateral Pool satisfies the Geographical Diversification Requirement. 
  
 SECTION 13.25 Ownership of Mortgaged Properties. The Borrower shall be the sole owner of each of the Mortgaged Properties free and clear of any Liens other than Permitted Liens. 
  
 ARTICLE XIV 
 NEGATIVE COVENANTS OF THE BORROWER 
  
 The Borrower, with respect to itself, agrees and covenants with the Lender that, at all times during the Term of this Agreement: 
  
 SECTION 14.01 Other Activities. The Borrower shall not: 
  
 (a) engage in any business or activity other than in connection with (i) the Ownership, development, construction, management and
operation of Multifamily Residential Properties or other types of real property in which it has expertise and (ii) activities related to the activities permitted in (i) above; 
  
 (b) amend its Organizational Documents in any material respect without the prior written consent of the
Lender; 
  
 (c) dissolve or liquidate in whole or
in part; 
  
 (d) except as otherwise provided in
this Agreement, without the prior written consent of Lender, merge or consolidate with any Person; or 
  
 (e) use, or permit to be used, any Mortgaged Property for any uses or purposes other than as a Multifamily Residential Property.

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

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 SECTION 14.03 Zoning. The Borrower shall not initiate or consent to any zoning reclassification of any Mortgaged
Property or seek any variance under any zoning ordinance or use or permit the use of any Mortgaged Property in any manner that could result in the use becoming a nonconforming use under any zoning ordinance or any other applicable land use law, rule
or regulation. 
  
 SECTION 14.04 Liens. The Borrower shall not create,
incur, assume or suffer to exist any Lien on any Mortgaged Property or any part of any Mortgaged Property, except the Permitted Liens. 
  
 SECTION 14.05 Sale. Except in connection with a release of Collateral in accordance with Article VII, the Borrower shall not Transfer any Mortgaged Property or any
part of any Mortgaged Property without the prior written consent of the Lender (which consent may be granted or withheld in the Lender’s discretion), or any interest in any Mortgaged Property, other than to enter into Leases for units in a
Mortgaged Property to any tenant in the ordinary course of business. For so long as the Mortgaged Property commonly known as Southland Station, Phase II and located in Houston County, Georgia is part of the Collateral Pool, the Borrower shall not
sell or otherwise transfer any Ownership Interest in the entity owning all or any part of the property commonly known as Southland Station, Phase I and located in Houston County, Georgia (except for any Transfer permitted under this Agreement) and
any uncured default on any indebtedness secured by such Multifamily Residential Property shall be a default under this Agreement. For so long as either of the Mortgaged Properties commonly known as Three Oaks I or Three Oaks II each located in
Valdosta, Georgia, is part of the Collateral Pool, the Borrower Party shall not sell or otherwise transfer all or any part of either such Mortgaged Property (except for any Transfer permitted under this Agreement). For so long as either of the
Mortgaged Properties commonly known as Wildwood I or Wildwood II each located in Thomasville, Georgia, is part of the Collateral Pool, the Borrower Party shall not sell or otherwise transfer all or any part of either such Mortgaged Property (except
for any Transfer permitted under this Agreement). 
  
 SECTION 14.06
Indebtedness. The Borrower shall not incur or be obligated at any time with respect to any Indebtedness (other than Advances) in connection with any of the Mortgaged Properties. 
  
 SECTION 14.07 Principal Place of Business. The Borrower shall not change its principal place of business or the location of its books
and records, each as set forth in Section 12.01(a), without first giving 30 days’ prior written notice to the Lender. 
  
 SECTION 14.08 Frequency of Requests. The Borrower shall have the right, subject to the terms, conditions and limitations of this Agreement, to make a Future
Advance Request for a Variable Facility Advance on any day until the expiration of the Variable Facility Availability Period and to make a Future Advance Request for a Fixed Facility Advance on any day until the expiration of the Fixed Facility
Availability Period. 
  
 SECTION 14.09 Change in Property Management. The
Borrower shall not change the management agent for any Mortgaged Property except to a management agent which the Lender 

  

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determines is qualified in accordance with the criteria set forth in Section 701 of the DUS Guide. 
  
 SECTION 14.10 Condominiums. The Borrower shall not submit any Mortgaged Property to a
condominium regime during the Term of this Agreement. 
  
 SECTION 14.11
Restrictions on Partnership Distributions. The Borrower shall not make any distributions of any nature or kind whatsoever to the owners of its Ownership Interests as such if, at the time of such distribution, a Potential Event of Default or
an Event of Default has occurred and remains uncured. 
  
 SECTION 14.12 Lines
of Business. The Borrower shall not be substantially involved in any businesses other than the acquisition, ownership, development, construction, leasing, financing or management, directly or through Affiliates, of Multifamily Residential
Properties, and the conduct of these businesses shall not violate the Organizational Documents pursuant to which it is formed. 
  
 SECTION 14.13 Limitation on Unimproved Real Property and New Construction. The Borrower shall not permit: 
  
 (a) the value of its real property which is not improved
(except real property on which phases of a Mortgaged Property are contemplated to be constructed) by one or more buildings leased, or held out for lease, to third parties (“Unimproved Real Property”) to exceed 10% of the value of all of
its “Real Estate Assets” (as that term is defined in Section 856(c)(6)(B) of the Internal Revenue Code and the regulations thereunder); and 
  
 (b) the sum of (i) the value of its Unimproved Real Property and (ii) the value of its Real Estate Assets which are under construction or
subject to substantial rehabilitation to exceed 20% of the value of all of its Real Estate Assets. 
  
 All of the foregoing values shall be reasonably determined by the Lender. 
  
 SECTION 14.14 Dividend Payout. The Borrower shall not make a dividend payment (including both common stock dividends and preferred stock dividends) which is greater than ninety percent (90%) of Funds from
Operations or that would otherwise violate the United States federal tax laws governing the qualifications of real estate investment trusts. As used herein, “Funds from Operations” shall mean consolidated net income of the REIT (computed
in accordance with GAAP), excluding gains (or losses) from debt restructuring or sales of property, plus depreciation and goodwill amortization, before extraordinary or unusual items, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect Funds from Operations on the same basis. Upon written pre-approval of the Lender, exceptions may be made where the Board of Directors of the REIT
determines, in good faith, that a special dividend must be paid to avoid taxes due to excess gains from the sale of Multifamily Residential Properties. 
  

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 ARTICLE XV 
 FINANCIAL COVENANTS OF THE BORROWER 
  
 The
Borrower agrees and covenants with the Lender that, at all times during the Term of this Agreement: 
  
 SECTION 15.01 Financial Definitions. For all purposes of this Agreement, the following terms shall have the respective meanings set forth below: 
  
 “Consolidated EBITDA” means, for any period, and without double counting any item, the
EBITDA for the Borrower and its Subsidiaries for such period on a consolidated basis. 
  
 “Consolidated EBITDA to Fixed Charges Ratio” means, for any period of determination, the ratio (expressed as a
percentage) of— 
  
 (a) the excess of—

  
 (i) the Consolidated EBITDA for the period,
less 
  
 (ii) the Imputed Capital Expenditures
for the period; 
  
 to 
  
 (b) the Consolidated Fixed Charges for the period.

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

(ii) the Imputed Capital Expenditures for the period; 
  
 to 
  
 (b) the Consolidated Interest Expense for the period. 
  
 “Consolidated Fixed Charges” means, for any period of determination, the sum of—

  
 (a) the Consolidated Interest Expense for the
period; 
  
 (b) the Consolidated Scheduled
Amortization for the period; and 
  
 (c)
Preferred Distributions for the period. 
  
 “Consolidated Interest Expense” means, for any period of determination, and without double counting any item, the sum of the Interest Expense for the Borrower and its Subsidiaries for such period on a consolidated basis.

  

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 “Consolidated Scheduled Amortization” means, for any period of
determination, and without double counting any item, the sum of the Scheduled Amortization (but excluding balloon payments) for the Borrower and its Subsidiaries for such period on a consolidated basis. 
  
 “Consolidated Total Assets” means, for any
Person, all assets of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP; provided that all assets composed of real property shall be valued on an undepreciated cost basis and the portion of any joint venture
assets owned by such Person shall be included in Consolidated Total Assets. The assets of a Person and its Subsidiaries shall be adjusted to reflect such Person’s allocable share of such assets, for the relevant period or as of the date of
determination, taking into account (a) the relative proportion of each such item derived from assets directly owned by such Person and from assets owned by its Subsidiaries, and (b) such Person’s respective ownership interest in its
Subsidiaries. 
  
 “Consolidated Total
Indebtedness” means, as of any date, and without double counting any item, the Total Indebtedness for the Borrower and its Subsidiaries as of such date (including the Total Indebtedness of the Borrower as of such date and the portion of any
indebtedness of any joint venture in which the Borrower or any Subsidiary thereof is a venturer attributable to the Borrower or its Subsidiary). 
  
 “EBITDA” means, for any period, the sum determined in accordance with GAAP, of the following, for any Person on a
consolidated basis— 
  
 (a) the net income
(or net loss) of such Person during such Period, but excluding gains and losses on the sale of fixed assets; 
  
 (b) all amounts treated as expenses for depreciation, Interest Expense and the amortization of intangibles of any kind to the extent
included in the determination of such net income (or loss); and 
  
 (c) all accrued taxes on or measured by income to the extent included in the determination of such net income (or loss); 
  
 provided, however, that net income (or loss) shall be computed for these purposes without giving effect to extraordinary losses or
extraordinary gains. 
  
 “Imputed Capital
Expenditures” means, for any four (4) consecutive quarters, an amount equal to the average number of apartment units owned by the Borrower or its Subsidiaries during such period multiplied by Three Hundred Dollars ($300.00) per apartment
unit, and for any period of less than four (4) consecutive quarters, an appropriate proration of such figure. 
  
 “Interest Expense” means, for any period, the sum of— 
  
 (a) gross interest expense for the period (including all commissions, discounts, fees and other charges in
connection with standby letters of credit and similar instruments) for the Borrower and its Subsidiaries; and 
  

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 (b) the portion of the up-front costs and expenses for Rate Contracts entered into by the
Borrower and its Subsidiaries (to the extent not included in gross interest expense) fairly allocated to such Rate Contracts as expenses for such period, as determined in accordance with GAAP; 
  
 (c) provided, that, all interest expense accrued by the
Borrower and its Subsidiaries during such period, even if not payable on or before the Credit Facility Termination Date, shall be included within “Interest Expense.” Notwithstanding the foregoing, interest accrued under any Intra-Company
Debt shall not be included within “Interest Expense” for any purposes hereof. 
  
 “Intra-Company Debt” means Indebtedness (whether book-entry or evidenced by a term, demand or other note or other
instrument) owed by the Borrower or its Subsidiaries to any Subsidiary, and incurred or assumed for the purpose of capitalizing a Subsidiary of the Borrower. 
  

“Management Entity” means the REIT. 
  
 “Net Worth” means, as of any specified date, for any Person, the excess of the
Person’s assets over the Person’s liabilities, determined in accordance with GAAP, on a consolidated basis, provided that all real property shall be valued on an undepreciated basis. 
  
 “Pledged Cash” shall mean the amount held
on deposit in the Pledgee Account. 
  
 “Preferred Distributions” means, for any period, the amount of any and all distributions due and payable to the holders of any form of preferred stock (whether perpetual, convertible or otherwise) or other ownership or
beneficial interest in the REIT or any of its Subsidiaries that entitles the holders thereof to preferential payment or distribution priority with respect to dividends, assets or other payments over the holders of any other stock or other ownership
or beneficial interest in such Person. 
  
 “Rate Contracts” means interest rate and currency swap agreements, cap, floor and collar agreements, interest rate insurance, currency spot and forward contracts and other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates. 
  
 “Restricted Cash” means the sum of Pledged Cash plus any cash pledged by the Borrower or its Subsidiaries to other lenders, as indicated in the line item for “restricted cash” in the
Borrower’s balance sheet from time to time. 
  
 “Scheduled Amortization” means, with respect to any Person, the sum, as of any date of determination, of the current portion (i.e., such portion as is scheduled to be paid by the obligor thereof within 12 months from the
date of determination) of all regularly scheduled amortization payments due on such Person’s long-term fully amortizing mortgage Indebtedness (exclusive of balloon payments). 
  
 “Stock” means all shares, options, warrants, interests, participations or other equivalents
(regardless of how designated) of or in a corporation or equivalent entity, whether 

  

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voting or nonvoting, including common stock, preferred stock, perpetual preferred stock or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities and Exchange Act of 1934, and regulations promulgated thereunder). 
  
 “Total Indebtedness” means, as of any date
of determination, and in respect of any Person, all outstanding Indebtedness, and shall include, without limitation: (i) such Person’s share of the Indebtedness of any partnership or joint venture in which such Person directly or indirectly
holds any interest; and (ii) any recourse or contingent obligations, directly or indirectly, of such Person with respect to any Indebtedness of such partnership or joint venture in excess of its proportionate share. Notwithstanding the foregoing,
(x) Intra-Company Debt, and (y) accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the ordinary course of business in accordance with customary terms
and paid within the specified time, shall be excluded from the calculation of “Total Indebtedness” but shall not otherwise be excluded as Indebtedness for any other purpose hereof. 
  
 “Unconsolidated Partnership” means any
partnership or joint venture (a) in which the Borrower or any Subsidiary of the Borrower holds an interest which is not consolidated in the financial statements of the REIT or (b) which is not a Subsidiary. 
  
 “Wholly-Owned Subsidiary” means a
Subsidiary of the Borrower one hundred percent (100%) of the Stock or other equity or other beneficial interests (in the case of Persons other than corporations) is owned directly or indirectly by the Borrower; provided, however, that where such
term is qualified with respect to a specific Person (e.g., “Wholly-Owned Subsidiary of the REIT”) such terms means a Subsidiary one hundred percent (100%) of the Stock or other equity or other beneficial interests (in the case of Persons
other than corporations) is owned directly or indirectly by the specified Person. 
  
 SECTION 15.02 Compliance with Debt Service Coverage Ratios. The Borrower shall at all times maintain the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period so that it is not less than 1.40:1.0. 
  
 SECTION 15.03 Compliance with Loan to Value Ratios. The Borrower shall at all times
maintain the Aggregate Loan to Value Ratio so that it is not greater than 65%. Notwithstanding the foregoing, the parties hereby agree that if, as a result of any annual Valuation performed pursuant to Section 5.04, the Aggregate Loan to Value Ratio
exceeds 65% but is not greater than 70%, such Aggregate Loan to Value Ratio shall not be an Event of Default until the next annual Valuation and determination of Aggregate Loan to Value Ratio is performed, provided that Borrower shall pay an
additional Variable Facility Fee and Fixed Facility Fee of (x) if such non-compliance occurs during 2004, 9 basis points per annum for the period beginning on the date of the determination and ending on December 31, 2004, and (y) if such
non-compliance occurs subsequent to December 31, 2004, the number of basis points to be determined by Lender. 
  

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 SECTION 15.04 Compliance with Concentration Test. 
  
 (a) The Borrower shall at all times maintain the Collateral so that the aggregate Valuations of any group of
Mortgaged Properties located within a one mile radius shall not exceed 25% of the aggregate Valuations of all Mortgaged Properties. 
  
 (b) The Borrower shall at all times maintain the Collateral so that the Valuation of any one Mortgaged Property shall not exceed 20% of
the aggregate Valuations of all Mortgaged Properties. 
  
 SECTION 15.05
Compliance with REIT’s Net Worth Test. The REIT shall at all times maintain its Net Worth so that it is not less than the highest Net Worth covenant required by any other financial institution where the REIT maintains a bank line
(whether secured or unsecured), but in no event less than $550,000,000 plus 65% of proceeds (less all reasonable and customary expenses and costs) of equity offerings, net of redemptions, consummated by the REIT after August 22, 2002. 
  
 SECTION 15.06 Compliance with REIT’s Total Indebtedness to Consolidated Total Assets
Ratio. The REIT shall not permit the ratio of Consolidated Total Indebtedness to Consolidated Total Assets to exceed 60% at any time. 
  
 SECTION 15.07 Compliance with REIT’s Consolidated EBITDA to Interest Ratio. The REIT shall not permit the Consolidated EBITDA to Interest Ratio computed for
any fiscal quarter to be less than 200% for any period of four consecutive fiscal quarters (treated as a single accounting period). 
  
 SECTION 15.08 Compliance with REIT’s Consolidated EBITDA to Fixed Charge Ratio. The REIT shall not permit the Consolidated EBITDA to Fixed Charges Ratio
computed for any fiscal quarter or year to be less than 150% for any period of four consecutive fiscal quarters (treated as a single accounting period). 
  
 ARTICLE XVI 
 FEES 
  
 SECTION 16.01 Standby Fee and Rate Preservation Fee. The Borrower shall pay the
Standby Fee to the Lender for the period from the date of this Agreement to the end of the Term of this Agreement. Unless Borrower notifies Lender in writing not less than 30 days prior to the first anniversary of the Amended and Restated Closing
Date that it does not elect to pay the Rate Preservation Fee, Borrower shall pay the Rate Preservation Fee to Lender commencing on the first day after such first anniversary. If Borrower elects not to pay the Rate Preservation Fee, such election
shall be final. Borrower may elect to no longer pay the Rate Preservation Fee, which election shall be irrevocably terminated by at least 30 days’ written notice of such termination by Borrower to Lender. Each of the Standby Fee and the Rate
Preservation Fee shall be payable monthly, in arrears, on the first Business Day following the end of the month, except that the Standby Fee and Rate Preservation Fee for the last month during the Term of this Agreement shall be paid on the last day
of the Term of this Agreement. 
  

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 SECTION 16.02 Origination Fees. 
  
 (a) Initial Origination Fee. The Borrower has paid to the Lender an origination fee (“Initial
Origination Fee”) equal to the product obtained by multiplying the Commitment .65%. 
  
 (b) Expansion Origination Fee. Upon the closing of a Credit Facility Expansion Request under Article VIII, the Borrower shall pay
to the Lender an origination fee (“Expansion Origination Fee”) equal to the product obtained by multiplying (i) the increase in the Commitment made on the Closing Date for the Credit Facility Expansion Request, by (ii) .65%. Any
Expansion Origination Fee shall be reduced by the amount of any Collateral Addition Fee paid by the Borrower in respect of any Additional Mortgaged Properties added to the Collateral Pool in conjunction with such expansion. The Borrower shall pay
the Expansion Origination Fee on or before the Closing Date for the Credit Facility Expansion Request. 
  
 SECTION 16.03 Due Diligence Fees. 
  
 (a) Initial Due Diligence Fees. The Borrower has paid to the Lender due diligence fees (“Initial Due Diligence Fees”) with respect to the Initial Mortgaged Properties. 
  
 (b) Additional Due Diligence Fees for Additional and
Substituted Collateral. The Borrower shall pay to the Lender additional reasonable due diligence fees (the “Additional Collateral Due Diligence Fees”) with respect to each Additional and Substituted Mortgaged Property in an
amount not to exceed the sum of $16,000. The Borrower shall pay Additional Collateral Due Diligence Fees for the Additional or Substituted Mortgaged Property to the Lender on the date on which it submits the Collateral Addition or Substitution
Request for the addition of the Additional or Substituted Mortgaged Property to the Collateral Pool. 
  
 SECTION 16.04 Legal Fees and Expenses. 
  
 (a) Initial Legal Fees. The Borrower shall pay, or reimburse the Lender for, all out-of-pocket legal fees and expenses incurred by the Lender and by Fannie Mae in connection with the preparation, review and
negotiation of this Agreement and any other Loan Documents executed on the date hereof. The Borrower has paid Lender’s and Fannie Mae’s legal fees in connection with the Initial Mortgaged Properties. On the date of this Agreement, the
Borrower shall pay all such legal fees and expenses not previously paid or for which funds have not been previously provided. 
  
 (b) Fees and Expenses Associated with Requests. The Borrower shall pay, or reimburse the Lender for, all reasonable costs and
expenses incurred by the Lender, including the out-of-pocket legal fees and expenses incurred by the Lender in connection with the preparation, review and negotiation of all documents, instruments and certificates to be executed and delivered in
connection with each Request, the performance by the Lender of any of its obligations with respect to the Request, the satisfaction of all conditions precedent to the Borrower’s rights or the Lender’s obligations with respect to the
Request, and all transactions related to any of the foregoing, including the cost of title insurance premiums and applicable recordation and transfer taxes and charges and all other reasonable costs and expenses in connection with a Request. The
obligations of the Borrower under this subsection shall be 

  

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absolute and unconditional, regardless of whether the transaction requested in the Request actually occurs. The Borrower shall pay such costs and expenses to
the Lender on the Closing Date for the Request, or, as the case may be, after demand by the Lender when the Lender determines that such Request will not close. 
  

SECTION 16.05 MBS-Related Costs. The Borrower shall pay to the Lender, within 30 days after demand, all reasonable fees and expenses incurred by the Lender or
Fannie Mae in connection with the issuance of any MBS backed by an Advance, including the fees charged by Depository Trust Company and State Street Bank or any successor fiscal agent or custodian. 
  
 SECTION 16.06 Failure to Close any Request. If the Borrower makes a Request and fails
to close on the Request for any reason other than the default by the Lender, then the Borrower shall pay to the Lender and Fannie Mae all damages incurred by the Lender and Fannie Mae in connection with the failure to close. 
  
 SECTION 16.07 Other Fees. The Borrower shall pay the following additional fees and
payments, if and when required pursuant to the terms of this Agreement: 
  
 (a) The Collateral Addition Fee, pursuant to Section 6.03(b), in connection with the addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI; 
  
 (b) The Collateral Substitution Fee, pursuant to Section
7.04, in connection with the addition of a Substituted Mortgaged Property to the Collateral Pool pursuant to Article VII; 
  
 (c) The Release Price, pursuant to Section 7.02(c), in connection with the release of a Mortgaged Property from the Collateral Pool
pursuant to Article VII; 
  
 (d) The Release Fee,
pursuant to Section 7.03(c), in connection with the release of a Mortgaged Property from the Collateral Pool pursuant to Article VII; 
  
 (e) The Variable Facility Termination Fee, pursuant to Section 9.03(b) in connection with a complete or partial termination of the
Variable Facility pursuant to Article IX; and 
  
 (f) The Variable Facility Termination Fee, pursuant to Section 10.03(b), in connection with the termination of the Credit Facility pursuant to Article X. 
  
 ARTICLE XVII 
 EVENTS OF DEFAULT 
  
 SECTION 17.01 Events of Default. Each of the
following events shall constitute an “Event of Default” under this Agreement, whatever the reason for such event and whether it shall be voluntary or involuntary, or within or without the control of the Borrower, or be effected by 

  

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operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any Governmental Authority: 
  
 (a) the occurrence of a default under any Loan Document
beyond the cure period, if any, set forth therein; or 
  
 (b) the failure by the Borrower to pay when due any amount payable by the Borrower under any Note, any Mortgage, this Agreement or any other Loan Document, including any fees, costs or expenses; or 
  
 (c) the failure by the Borrower to perform or observe any
covenant set forth in Article XIII or Article XIV within thirty (30) days after prior written notice of such failure from Lender, provided that such period shall be extended for up to 30 additional days if the Borrower, in the discretion of the
Lender, is diligently pursuing a cure of such default within 30 days after receipt of notice from the Lender; or 
  
 (d) any warranty, representation or other written statement made by or on behalf of the Borrower contained in this Agreement, any other
Loan Document or in any instrument furnished in compliance with or in reference to any of the foregoing, is false or misleading in any material respect on any date when made or deemed made; or 
  
 (e) any other Indebtedness, including but not limited to
Indebtedness related to the Other Credit Agreement, in an aggregate amount of $1,000,000 of either Borrower or assumed by either Borrower (i) is not paid when due nor within any applicable grace period in any agreement or instrument relating to such
Indebtedness or (ii) becomes due and payable before its normal maturity by reason of a default or event of default, however described, or any other event of default shall occur and continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness; or 
  
 (f) (i) The Borrower shall (A) commence a voluntary case under the Federal bankruptcy laws (as now or hereafter in effect), (B) file a petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, debt adjustment, winding up or composition or adjustment of debts, (C) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (D) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of a substantial
part of its property, domestic or foreign, (E) admit in writing its inability to pay, or generally not be paying, its debts as they become due, (F) make a general assignment for the benefit of creditors, (G) assert that the Borrower has no liability
or obligations under this Agreement or any other Loan Document to which it is a party; or (H) take any action for the purpose of effecting any of the foregoing; or (ii) a case or other proceeding shall be commenced against the Borrower in any court
of competent jurisdiction seeking (A) relief under the Federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding upon or composition or
adjustment of debts, or (B) the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower, or of all or a substantial part of the property, domestic or foreign, of the Borrower and any such case or proceeding shall
continue 

  

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undismissed or unstayed for a period of 60 consecutive calendar days, or any order granting the relief requested in any such case or proceeding against the
Borrower (including an order for relief under such Federal bankruptcy laws) shall be entered; or 
  
 (g) if any provision of this Agreement or any other Loan Document or the lien and security interest purported to be created hereunder or
under any Loan Document shall at any time for any reason cease to be valid and binding in accordance with its terms on the Borrower, or shall be declared to be null and void, or the validity or enforceability hereof or thereof or the validity or
priority of the lien and security interest created hereunder or under any other Loan Document shall be contested by the Borrower seeking to establish the invalidity or unenforceability hereof or thereof, or the Borrower shall deny that it has any
further liability or obligation hereunder or thereunder; or 
  
 (h) (i) the execution by the Borrower of a chattel mortgage or other security agreement on any materials, fixtures or articles used in the construction or operation of the improvements located on any Mortgaged
Property or on articles of personal property located therein, or (ii) if any such materials, fixtures or articles are purchased pursuant to any conditional sales contract or other security agreement or otherwise so that the Ownership thereof will
not vest unconditionally in the Borrower free from encumbrances, or (iii) if the Borrower does not furnish to the Lender upon request the contracts, bills of sale, statements, receipted vouchers and agreements, or any of them, under which the
Borrower claims title to such materials, fixtures, or articles; or 
  
 (i) the failure by the Borrower to comply with any requirement of any Governmental Authority within 30 days after written notice of such requirement shall have been given to the Borrower by such Governmental
Authority; provided that, if action is commenced and diligently pursued by the Borrower within such 30 days, then the Borrower shall have an additional 30 days to comply with such requirement; or 
  
 (j) a dissolution or liquidation for any reason (whether
voluntary or involuntary) of the Borrower; or 
  
 (k) any judgment against either Borrower, any attachment or other levy against any portion of either Borrower’s assets with respect to a claim or claims in an amount in excess of $500,000 in the aggregate remains unpaid, unstayed on
appeal undischarged, unbonded, not fully insured or undismissed for a period of 60 days; or 
  
 (l) the failure of the Borrower to perform or observe any of the Financial Covenants, which failure shall continue for a period of 30 days
after the date on which the Borrower receives a notice from the Lender specifying the failure; or 
  
 (m) the failure of Borrower to maintain the Hedges required by Article XXI of this Agreement; or 
  
 (n) the failure by the Borrower to perform or observe any
term, covenant, condition or agreement hereunder, other than as set forth in subsections (a) through (l) above, or in any other Loan Document, within 30 days after receipt of notice from the Lender identifying such failure. 
  

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 ARTICLE XVIII 
 REMEDIES 
  
 SECTION 18.01 Remedies;
Waivers. Upon the occurrence of an Event of Default, the Lender may do any one or more of the following (without presentment, protest or notice of protest, all of which are expressly waived by the Borrower): 
  
 (a) by written notice to the Borrower, to be effective upon
dispatch, terminate the Commitment and declare the principal of, and interest on, the Advances and all other sums owing by the Borrower to the Lender under any of the Loan Documents forthwith due and payable, whereupon the Commitment will terminate
and the principal of, and interest on, the Advances and all other sums owing by the Borrower to the Lender under any of the Loan Documents will become forthwith due and payable. 
  
 (b) The Lender shall have the right to pursue any other remedies available to it under any of the Loan
Documents. 
  
 (c) The Lender shall have the
right to pursue all remedies available to it at law or in equity, including obtaining specific performance and injunctive relief. 
  
 SECTION 18.02 Waivers; Rescission of Declaration. The Lender shall have the right, to be exercised in its complete discretion, to waive any breach hereunder
(including the occurrence of an Event of Default), by a writing setting forth the terms, conditions, and extent of such waiver signed by the Lender and delivered to the Borrower. Unless such writing expressly provides to the contrary, any waiver so
granted shall extend only to the specific event or occurrence which gave rise to the waiver and not to any other similar event or occurrence which occurs subsequent to the date of such waiver. 
  
 SECTION 18.03 The Lender’s Right to Protect Collateral and Perform Covenants and
Other Obligations. If the Borrower fails to perform the covenants and agreements contained in this Agreement or any of the other Loan Documents, then the Lender at the Lender’s option may make such appearances, disburse such sums and take
such action as the Lender deems necessary, in its sole discretion, to protect the Lender’s interest, including (i) disbursement of reasonable attorneys’ fees, (ii) entry upon the Mortgaged Property to make repairs and Replacements, (iii)
procurement of satisfactory insurance as provided in paragraph 5 of the Security Instrument encumbering the Mortgaged Property, and (iv) if the Security Instrument is on a leasehold, exercise of any option to renew or extend the ground lease on
behalf of the Borrower and the curing of any default of the Borrower in the terms and conditions of the ground lease. Any amounts disbursed by the Lender pursuant to this Section, with interest thereon, shall become additional indebtedness of the
Borrower secured by the Loan Documents. Unless the Borrower and the Lender agree to other terms of payment, such amounts shall be immediately due and payable and shall bear interest from the date of disbursement at the weighted average, as
determined by Lender, of the interest rates in effect from time to time for each Advance unless collection from the Borrower of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from the Borrower under applicable law. Nothing contained in this Section shall require the Lender to incur any expense or take any action hereunder. 
  

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 SECTION 18.04 No Remedy Exclusive. Unless otherwise expressly provided, no remedy herein conferred upon or
reserved is intended to be exclusive of any other available remedy, but each remedy shall be cumulative and shall be in addition to other remedies given under the Loan Documents or existing at law or in equity. 
  
 SECTION 18.05 No Waiver. No delay or omission to exercise any right or power accruing
under any Loan Document upon the happening of any Event of Default or Potential Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and
as often as may be deemed expedient. 
  
 SECTION 18.06 No Notice. In order
to entitle the Lender to exercise any remedy reserved to the Lender in this Article, it shall not be necessary to give any notice, other than such notice as may be required under the applicable provisions of this Agreement or any of the other Loan
Documents. 
  
 SECTION 18.07 Application of Payments. Except as otherwise
expressly provided in the Loan Documents, and unless applicable law provides otherwise, (i) all payments received by the Lender from the Borrower under the Loan Documents shall be applied by the Lender against any amounts then due and payable under
the Loan Documents by the Borrower, in any order of priority that the Lender may determine and (ii) the Borrower shall have no right to determine the order of priority or the allocation of any payment it makes to the Lender. 
  
 ARTICLE XIX 
 RIGHTS OF FANNIE MAE 
  
 SECTION 19.01 Special Pool Purchase Contract. The Borrower acknowledges that Fannie Mae is entering into an agreement with the Lender (“Special Pool Purchase Contract”), pursuant to which, inter alia,
(i) the Lender shall agree to assign all of its rights under this Agreement to Fannie Mae, (ii) Fannie Mae shall accept the assignment of the rights, (iii) subject to the terms, limitations and conditions set forth in the Special Pool Purchase
Contract, Fannie Mae shall agree to purchase a 100% participation interest in each Advance issued under this Agreement by issuing to the Lender a Fannie Mae MBS, in the amount and for a term equal to the Advance purchased and backed by an interest
in the Fixed Facility Note or the Variable Facility Note, as the case may be, and the Collateral Pool securing the Notes, (iv) the Lender shall agree to assign to Fannie Mae all of the Lender’s interest in the Notes and Collateral Pool securing
the Notes, and (v) the Lender shall agree to service the loans evidenced by the Notes. 
  
 SECTION 19.02 Assignment of Rights. The Borrower acknowledges and consents to the assignment to Fannie Mae of all of the rights of the Lender under this Agreement and all other Loan Documents, including the right and power to make
all decisions on the part of the Lender to be made under this Agreement and the other Loan Documents, but Fannie Mae, by virtue of this assignment, shall not be obligated to perform the obligations of the Lender under this Agreement or the other
Loan Documents. 
  
 SECTION 19.03 Release of Collateral. The Borrower
hereby acknowledges that, after the assignment of Loan Documents contemplated in Section 19.02, the Lender shall not have the 

  

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right or power to effect a release of any Collateral pursuant to Articles VII or X. The Borrower acknowledges that the Security Instruments provide for the
release of the Collateral under Articles VII and X. Accordingly, the Borrower shall not look to the Lender for performance of any obligations set forth in Articles VII and X, but shall look solely to the party secured by the Collateral to be
released for such performance. The Lender represents and warrants to the Borrower that the party secured by the Collateral shall be subject to the release provisions contained in Articles VII and X by virtue of the release provisions in each
Security Instrument. 
  
 SECTION 19.04 Replacement of Lender. At the
request of Fannie Mae, the Borrower and the Lender shall agree to the assumption by another lender designated by Fannie Mae (which lender shall meet Fannie Mae’s then current standards for lenders for credit facilities of the type and size of
the credit facility evidenced by this Agreement), of all of the obligations of the Lender under this Agreement and the other Loan Documents, and/or any related servicing obligations, and, at Fannie Mae’s option, the concurrent release of the
Lender from its obligations under this Agreement and the other Loan Documents, and/or any related servicing obligations, and shall execute all releases, modifications and other documents which Fannie Mae determines are necessary or desirable to
effect such assumption. 
  
 SECTION 19.05 Fannie Mae and Lender Fees and
Expenses. The Borrower agrees that any provision providing for the payment of fees, costs or expenses incurred or charged by the Lender pursuant to this Agreement shall be deemed to provide for the Borrower’s payment of all reasonable fees,
costs and expenses incurred or charged by the Lender or Fannie Mae in connection with the matter for which fees, costs or expenses are payable. 
  
 SECTION 19.06 Third-Party Beneficiary. The Borrower hereby acknowledges and agrees that Fannie Mae is a third party beneficiary of all of the representations,
warranties and covenants made by any Borrower to, and all rights under this Agreement conferred upon, the Lender, and, by virtue of its status as third-party beneficiary and/or assignee of the Lender’s rights under this Agreement, Fannie Mae
shall have the right to enforce all of the provisions of this Agreement against the Borrower. 
  
 ARTICLE XX 
 INSURANCE, REAL ESTATE TAXES 
 AND REPLACEMENT RESERVES 
  
 SECTION 20.01 Insurance and Real Estate Taxes. The Borrower shall (unless waived by Lender) establish funds for taxes, insurance premiums and certain other charges for each Mortgaged Property in accordance with Section 7(a) of the
Security Instrument for each Mortgaged Property. The requirement for any fund established pursuant to the preceding sentence may be met, at the Lender’s reasonable discretion, by the posting of a letter of credit in form and substance
reasonably satisfactory to the Lender and meeting the requirements of Fannie Mae. 
  
 SECTION 20.02 Replacement Reserves. The Borrower shall execute a Replacement Reserve Agreement for the Mortgaged Property which they own and shall (unless waived by the Lender) make all deposits for replacement reserves in accordance
with the terms of the Replacement Reserve Agreement. 
  

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 ARTICLE XXI 
 INTEREST RATE PROTECTION 
  
 SECTION 21.01
Interest Rate Protection. 
  
 (a) Hedge
Requirement. To protect against fluctuations in interest rates, the Borrower shall make arrangements for a Hedge to be in place and maintained at all times with respect to the Hedge Requirement Amount. The Hedge for the Hedge Requirement Amount
shall be in place for a period beginning on the date of the first Variable Advance from the Hedge Requirement Amount and ending not earlier than the date which is the fifth anniversary of the Initial Closing Date (the “Initial Hedge
Period”). 
  
 (b) Subsequent
Hedges. Subject to the terms of Article XXI, additional Hedges (each a “Subsequent Hedge”) shall be required (i) upon the expiration of the Hedge in place for the Initial Hedge Period and (ii) if and at such times as a new
Variable Advance is funded that is part of the Hedge Requirement Amount, such Subsequent Hedge to be in effect for a period beginning on the day of the expiration of the Hedge in place for the Initial Hedge Period or on the Closing Date of the
Future Advance Request, as the case may be, and ending not earlier than the then effective Variable Facility Termination Date with respect to such Variable Advance. It is the intention of the parties, and a condition of the Amended and Restated
Variable Facility Commitment, that the Borrower shall obtain, and shall maintain at all times during the term of this Agreement so long as any Variable Facility Advance is Outstanding with respect to the Hedge Requirement Amount, a Hedge or Hedges
in an aggregate notional principal amount equal to the Variable Advances Outstanding that are part of the Hedge Requirement Amount and covering the entire term of the Amended and Restated Variable Facility Commitment and meeting the conditions set
forth in Section 21.02. 
  
 SECTION 21.02. Hedge Terms. Each Hedge shall:

  
 (a) provide for a notional principal amount
equal at all times to Variable Advances Outstanding that are part of the Hedge Requirement Amount; 
  
 (b) [intentionally deleted]; 
  
 (c) in the case of Swaps, provide for a notional interest rate required to achieve a 1.40 Aggregate Debt Service Coverage Ratio for the
Trailing 12 Months based upon a 30-year amortization period equal to the Three Month Libor Rate in effect from time to time (the “Swap Rate”); 
  

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

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 (e) in the case of Swaps, require the counterparty to make interest payments on the
notional principal amount at a rate equal to the amount by which Coupon Rate exceeds the Swap Rate; 
  
 (f) in the case of Caps, require the counterparty to make interest payments on the notional principal amount at a rate equal to the amount
by which the then applicable Coupon Rate exceeds the Cap Interest Rate; 
  
 (g) [intentionally deleted]; and 
  
 (h) be evidenced, governed and secured on terms and conditions, and pursuant to documentation (the “Hedge Documents”), in form and content reasonably acceptable to Fannie Mae, and with a counterparty
(a “Counterparty”) approved by Fannie Mae. 
  
 SECTION 21.03
Hedge Security Agreement; Delivery of Hedge Payments. Pursuant to a Hedge Security Agreement, the Lender shall be granted an enforceable, perfected, first priority lien on and security interest in each Hedge and payments due under the Hedge
(including scheduled and termination payments) in order to secure the Borrower’s obligations to the Lender under this Agreement. With respect to each Hedge, the Hedge Security Agreement must be delivered by the Borrower to the Lender no later
than the effective date of the Hedge. 
  
 SECTION 21.04 Termination. The
Borrower shall not terminate, transfer or consent to any transfer of any existing Hedge without the Lender’s prior written consent as long as the Borrower is required to maintain a Hedge pursuant to this Agreement; provided, however, that if,
and at such time as, there are no Variable Advances Outstanding that are part of the Hedge Requirement Amount, the Borrower shall have the right to terminate the existing Hedge and the proceeds of any such termination shall be paid to the Borrower.

  
 SECTION 21.05 Performance Under Hedge Documents. The Borrower agrees to
comply fully with, and to otherwise perform when due, its obligations under, all applicable Hedge Documents and all other agreements evidencing, governing and/or securing any Hedge arrangement contemplated under this Article XXI. The Borrower shall
not exercise, without the Lender’s prior written consent, which consent shall not be unreasonably withheld, and shall exercise, at the Lender’s direction, any rights or remedies under any Hedge Document, including without limitation the
right of termination. 
  
 ARTICLE XXII 
 LIMITS ON PERSONAL LIABILITY 
  
 SECTION 22.01 Personal Liability to the Borrower. 
  
 (a) Full Recourse. Except as provided in Section 22.01(b), each Borrower is and shall remain jointly and severally personally
liable to the Lender for the payment and performance of all Obligations throughout the term of this Agreement. 
  

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 (b) Termination of Personal Liability. The provisions of Section 22.01(a) shall be
null and void upon the written notice of Borrower to Lender of its election to render such provisions null and void if (i) the Aggregate Loan to Value Ratio is 60% or less, (ii) the Aggregate Debt Service Ratio for the Trailing 12 Month Period is
145% or more, (iii) there has been a complete termination of the Variable Facility, and (iv) the Mortgaged Properties are owned in fee simple by the Borrower that is a Single Purpose Entity. Upon the termination of the effectiveness of Section
22.01(a) the following additional provisions of this Agreement shall be null and void and no longer applicable: 
  
 (1) The second, third and fourth sentences of Section 8.01; and 
  
 (2) Sections 15.02 and 15.03 to the extent that a Default would result from the failure of the Borrower to
be in compliance with such Sections; 
  
 (c)
Exceptions to Limits on Personal Liability. Upon termination of personal liability of the Borrower pursuant to paragraph (b) of this Section 22.01, the Borrower shall remain personally liable to the Lender on a joint and several basis for the
repayment of a portion of the Advances and other amounts due under the Loan Documents equal to any loss or damage suffered by the Lender as a result of (1) failure of the Borrower to pay to the Lender upon written demand after an Event of Default
all Rents to which the Lender is entitled under Section 3(a) of the Security Instrument encumbering the Mortgaged Property and the amount of all security deposits collected by the Borrower from tenants then in residence; (2) failure of the Borrower
to apply all insurance proceeds and condemnation proceeds as required by the Security Instrument encumbering the Mortgaged Property; (3) failure of the Borrower to comply in all material respects with Section 13.04 relating to the delivery of books
and records, statements, schedules and reports; (4) fraud or written material misrepresentation by the Borrower or any officer, director, partner, member or employee of the Borrower in connection with the application for or creation of the
Obligations or any request for any action or consent by the Lender; (5) failure to apply Rents, first, to the payment of reasonable operating expenses and then to amounts (“Debt Service Amounts”) payable under the Loan Documents (except
that the Borrower will not be personally liable (i) to the extent that the Borrower lacks the legal right to direct the disbursement of such sums because of a bankruptcy, receivership or similar judicial proceeding or otherwise under the Loan
Documents, or (ii) with respect to Rents of a Mortgaged Property that are distributed in any Calendar Quarter if the Borrower has paid all operating expenses and Debt Service Amounts for that Calendar Quarter); or (6) failure of the Borrower to pay
any and all documentary stamp taxes, intangible taxes and other taxes, impositions, fees and charges due on or with respect to the Note, the Indebtedness, this Instrument and/or any of the other Loan Documents. 
  
 (d) Full Recourse After Termination of Personal
Liability. Upon termination of personal liability of the Borrower pursuant to paragraph (b) of this Section 22.01, the Borrower shall become personally liable to the Lender for the payment and performance of all Obligations upon the occurrence
of any of the following Events of Default: (1) the Borrower’s acquisition of any property or operation of any business not permitted by Section 33 of the Security Instrument; or (2) a Transfer that is an Event of Default under Section 21 of the
Security Instrument. 
  
 (e) Permitted
Transfer Not Release. No Transfer by the REIT of its Ownership Interests in the Borrower shall release the Borrower from liability under this Article, 

  

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this Agreement or any other Loan Document, unless the Lender shall have approved the Transfer and shall have expressly released the Borrower in connection
with the Transfer. 
  
 (f) Miscellaneous.
To the extent that the Borrower has personal liability under this Section, the Lender may exercise its rights against the Borrower personally without regard to whether the Lender has exercised any rights against the Mortgaged Property or any other
security, or pursued any rights against any guarantor, or pursued any other rights available to the Lender under the Loan Documents or applicable law. For purposes of this Article, the term “Mortgaged Property” shall not include any funds
that (1) have been applied by the Borrower as required or permitted by the Loan Documents prior to the occurrence of an Event of Default, or (2) are owned by the Borrower and which the Borrower was unable to apply as required or permitted by the
Loan Documents because of a bankruptcy, receivership, or similar judicial proceeding. 
  
 ARTICLE XXIII 
 MISCELLANEOUS PROVISIONS 
  
 SECTION 23.01 Counterparts. To facilitate execution, this Agreement may be executed in any number of counterparts. It shall not be
necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart, but it shall be sufficient that the signature of, or on behalf of, each party, appear on one
or more counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than the number of counterparts containing the respective signatures
of, or on behalf of, all of the parties hereto. 
  
 SECTION 23.02 Amendments,
Changes and Modifications. This Agreement may be amended, changed, modified, altered or terminated only by written instrument or written instruments signed by all of the parties hereto. 
  
 SECTION 23.03 Payment of Costs, Fees and Expenses. The Borrower shall pay, on demand,
all reasonable fees, costs, charges or expenses (including the fees and expenses of attorneys, accountants and other experts) incurred by the Lender in connection with: 
  
 (a) Any amendment, consent or waiver to this Agreement or any of the Loan Documents (whether or not any such
amendments, consents or waivers are entered into). 
  
 (b) Defending or participating in any litigation arising from actions by third parties and brought against or involving the Lender with respect to (i) any Mortgaged Property, (ii) any event, act, condition or circumstance in connection with
any Mortgaged Property or (iii) the relationship between the Lender and the Borrower in connection with this Agreement or any of the transactions contemplated by this Agreement. 
  
 (c) The administration or enforcement of, or preservation of rights or remedies under, this Agreement or any
other Loan Documents or in connection with the foreclosure upon, sale of or other disposition of any Collateral granted pursuant to the Loan Documents. 
  

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 (d) The REIT’s Registration Statement, or similar disclosure documents, including
fees payable to any rating agencies, including the reasonable fees and expenses of the Lender’s attorneys and accountants. 
  
 The Borrower shall also pay, on demand, any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution,
delivery, filing, recordation, performance or enforcement of any of the Loan Documents or the Advances. However, the Borrower will not be obligated to pay any franchise, excise, estate, inheritance, income, excess profits or similar tax on the
Lender. Any attorneys’ fees and expenses payable by the Borrower pursuant to this Section shall be recoverable separately from and in addition to any other amount included in such judgment, and such obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any such judgment. Any amounts payable by the Borrower pursuant to this Section, with interest thereon if not paid when due, shall become additional indebtedness of the
Borrower secured by the Loan Documents. Such amounts shall bear interest from the date such amounts are due until paid in full at the weighted average, as determined by Lender, of the interest rates in effect from time to time for each Advance
unless collection from the Borrower of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Borrower under applicable law. The provisions of
this Section are cumulative with, and do not exclude the application and benefit to the Lender of, any provision of any other Loan Document relating to any of the matters covered by this Section. 
  
 SECTION 23.04 Payment Procedure. All payments to be made to the Lender pursuant to
this Agreement or any of the Loan Documents shall be made in lawful currency of the United States of America and in immediately available funds by wire transfer to an account designated by the Lender before 1:00 p.m. (Eastern Standard Time) on the
date when due. 
  
 SECTION 23.05 Payments on Business Days. In any case in
which the date of payment to the Lender or the expiration of any time period hereunder occurs on a day which is not a Business Day, then such payment or expiration of such time period need not occur on such date but may be made on the next
succeeding Business Day with the same force and effect as if made on the day of maturity or expiration of such period, except that interest shall continue to accrue for the period after such date to the next Business Day. 
  
 SECTION 23.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial.
NOTWITHSTANDING ANYTHING IN THE NOTES, THE SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS TO THE CONTRARY, EACH OF THE TERMS AND PROVISIONS, AND RIGHTS AND OBLIGATIONS OF THE BORROWER UNDER THE NOTES, AND THE BORROWER UNDER THE OTHER LOAN
DOCUMENTS, SHALL BE GOVERNED BY, INTERPRETED, CONSTRUED AND ENFORCED PURSUANT TO AND IN ACCORDANCE WITH THE LAWS OF THE DISTRICT OF COLUMBIA (EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND
SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE
JURISDICTION IN WHICH 

  

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THE MORTGAGED PROPERTY IS LOCATED, (2) THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND FORECLOSURE OF SECURITY INTERESTS ON PERSONAL PROPERTY
(OTHER THAN DEPOSIT ACCOUNTS), WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION DETERMINED BY THE CHOICE OF LAW PROVISIONS OF THE DISTRICT OF COLUMBIA UNIFORM COMMERCIAL CODE AND (3) THE PERFECTION, THE EFFECT OF PERFECTION AND
NON-PERFECTION AND FORECLOSURE OF DEPOSIT ACCOUNTS, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE DEPOSIT ACCOUNT IS LOCATED. THE BORROWER AGREES THAT ANY CONTROVERSY ARISING UNDER OR IN RELATION TO THE NOTES, THE
SECURITY DOCUMENTS OR ANY OTHER LOAN DOCUMENT SHALL BE, EXCEPT AS OTHERWISE PROVIDED HEREIN, LITIGATED IN THE DISTRICT OF COLUMBIA. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN THE DISTRICT OF COLUMBIA SHALL, EXCEPT AS OTHERWISE
PROVIDED HEREIN, HAVE JURISDICTION OVER ALL CONTROVERSIES WHICH MAY ARISE UNDER OR IN RELATION TO THE LOAN DOCUMENTS, INCLUDING THOSE CONTROVERSIES RELATING TO THE EXECUTION, JURISDICTION, BREACH, ENFORCEMENT OR COMPLIANCE WITH THE NOTES, THE
SECURITY DOCUMENTS OR ANY OTHER ISSUE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS. THE BORROWER IRREVOCABLY CONSENTS TO SERVICE, JURISDICTION, AND VENUE OF SUCH COURTS FOR ANY LITIGATION ARISING FROM THE NOTES, THE
SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS, AND WAIVES ANY OTHER VENUE TO WHICH IT MIGHT BE ENTITLED BY VIRTUE OF DOMICILE, HABITUAL RESIDENCE OR OTHERWISE. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT THE LENDER FROM BRINGING ANY
SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST THE BORROWER, AND AGAINST THE COLLATERAL IN ANY OTHER JURISDICTION. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY OTHER JURISDICTION SHALL IN NO EVENT CONSTITUTE A
WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF DISTRICT OF COLUMBIA SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER AS PROVIDED HEREIN OR THE SUBMISSION HEREIN BY THE BORROWER TO PERSONAL JURISDICTION WITHIN THE
DISTRICT OF COLUMBIA. THE BORROWER (I) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING UNDER ANY OF THE LOAN DOCUMENTS TRIABLE BY A JURY AND (II) WAIVES ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH RIGHT
SHALL NOW OR HEREAFTER EXIST. THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
LENDER (INCLUDING, BUT NOT LIMITED TO, LENDER’S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND
VOLUNTARILY AGREED TO BY THE BORROWER UPON CONSULTATION 

  

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WITH INDEPENDENT LEGAL COUNSEL SELECTED BY THE BORROWER’S FREE WILL. 
  
 SECTION 23.07 Severability. In the event any provision of this Agreement or in any other Loan Document shall be held invalid, illegal
or unenforceable in any jurisdiction, such provision will be severable from the remainder hereof as to such jurisdiction and the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired in any
jurisdiction. 
  
 SECTION 23.08 Notices. 
  
 (a) Manner of Giving Notice. Each notice, direction,
certificate or other communication hereunder (in this Section referred to collectively as “notices” and singly as a “notice”) which any party is required or permitted to give to the other party pursuant to this Agreement shall be
in writing and shall be deemed to have been duly and sufficiently given if: 
  
 (1) personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); 
  
 (2) sent by Federal Express (or other similar overnight courier) designating morning delivery (any notice so
delivered shall be deemed to have been received on the Business Day it is delivered by the courier); 
  
 (3) sent by telecopier or facsimile machine which automatically generates a transmission report that states the date and time of the
transmission, the length of the document transmitted, and the telephone number of the recipient’s telecopier or facsimile machine (to be confirmed with a copy thereof sent in accordance with paragraphs (1) or (2) above within two Business Days)
(any notice so delivered shall be deemed to have been received (i) on the date of transmission, if so transmitted before 5:00 p.m. (local time of the recipient) on a Business Day, or (ii) on the next Business Day, if so transmitted on or after 5:00
p.m. (local time of the recipient) on a Business Day or if transmitted on a day other than a Business Day); 
  
 addressed to the parties as follows: 
  
 As to the Borrower: 
  
 c/o Mid-America Apartment
Communities, Inc. 
 6584 Polar Avenue 
 Suite 300 
 Memphis, Tennessee 38138 
 Attention: Simon R.C. Wadsworth 
                  Chief Financial Officer 
 Telecopy
No.: (901) 682-6667 
  

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 with a copy to: 
  

Bass, Berry & Sims PLC 
 The Tower at
Peabody Place 
 100 Peabody Place 
 Suite 900 
 Memphis, Tennessee 38103-3672 
 Attention: John A. Stemmler, Esq. 
 Telecopy No.: (901) 543-5999 
  
 As to the Lender: 
  
 Prudential Multifamily Mortgage, Inc. 
 c/o Prudential Asset Resources 
 2200 Ross
Avenue 
 Suite 4900 E 
 Dallas,
Texas 75201 
 Attention: Asset Management Department 
 Telecopy No.: (214) 777-4556 
  
 with a copy to: 
  
 Prudential Multifamily Mortgage,
Inc. 
 8401 Greensboro Drive 
 Suite 200 
 McLean, Virginia 22102 
 Attention: Laura Eckhardt 
 Telecopy No.: (703) 610-1422 
  
 and 
  
 Prudential Multifamily Mortgage, Inc. 
 Four Embarcadero Center 
 Suite 2700 
 San Francisco, California 94111 
 Attention:
Harry N. Mixon, Esq. 
 Telecopy No.: (415) 956-2197 
  

As to Fannie Mae: 
  
 Fannie Mae 
 3939 Wisconsin Avenue N. W.

 Washington, D.C. 20016-2899 
 Attention: Vice President for 
                 
Multifamily Asset Management 
 Telecopy No.: (202) 752-5016 
  
 with a copy to: 
  
 Venable LLP 
 575 7th Street, N.W. 
 Washington, D.C. 20004 
 Attention: Lawrence H. Gesner, Esq. 
 Telecopy No.: (202) 344-8300 
  

 -98- 

 (b) Change of Notice Address. Any party may, by notice given pursuant to this
Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its notices, but notice of a change of address shall only be effective upon receipt. Each
party agrees that it shall not refuse or reject delivery of any notice given hereunder, that it shall acknowledge, in writing, receipt of the same upon request by the other party and that any notice rejected or refused by it shall be deemed for all
purposes of this Agreement to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service, the courier service or facsimile. 
  
 SECTION 23.09 Further Assurances and Corrective Instruments. 
  
 (a) Further Assurances. To the extent permitted by
law, the parties hereto agree that they shall, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as the Lender or the Borrower may request
and as may be required in the opinion of the Lender or its counsel to effectuate the intention of or facilitate the performance of this Agreement or any Loan Document. 
  
 (b) Further Documentation. Without limiting the generality of subsection (a), in the event any
further documentation or information is required by the Lender to correct patent mistakes in the Loan Documents, materials relating to the Title Insurance Policies or the funding of the Advances, the Borrower shall provide, or cause to be provided
to the Lender, at their cost and expense, such documentation or information. The Borrower shall execute and deliver to the Lender such documentation, including any amendments, corrections, deletions or additions to the Notes, the Security
Instruments or the other Loan Documents as is reasonably required by the Lender. 
  
 (c) Compliance with Investor Requirements. Without limiting the generality of subsection (a), the Borrower shall do anything
necessary to comply with the reasonable requirements of the Lender in order to enable the Lender to sell the MBS backed by an Advance. 
  
 SECTION 23.10 Term of this Agreement. This Agreement shall continue in effect until the Credit Facility Termination Date. 
  
 SECTION 23.11 Assignments; Third-Party Rights. The Borrower shall not assign this
Agreement, or delegate any of its obligations hereunder, without the prior written consent of the Lender. The Lender may assign its rights and obligations under this Agreement separately or together, without the Borrower’s consent, only to
Fannie Mae, but may not delegate its obligations under this Agreement unless required to do so pursuant to Section 19.04. 
  

 -99- 

 SECTION 23.12 Headings. Article and Section headings used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 
  
 SECTION 23.13 General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i)
the terms defined in Article I, Section 15.01, Section 16.01 and elsewhere in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to
include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (iii) references herein to “Articles,” “Sections,” “subsections,”
“paragraphs” and other subdivisions without reference to a document are to designated Articles, Sections, subsections, paragraphs and other subdivisions of this Agreement; (iv) a reference to a subsection without further reference to a
Section is a reference to such subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions; (v) a reference to an Exhibit or a Schedule without a further reference
to the document to which the Exhibit or Schedule is attached is a reference to an Exhibit or Schedule to this Agreement; (vi) the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and (vii) the word “including” means “including, but not limited to.” 
  
 SECTION 23.14 Interpretation. The parties hereto acknowledge that each party and their respective counsel have participated in the drafting and revision of this
Agreement and the Loan Documents. Accordingly, the parties agree that any rule of construction which disfavors the drafting party shall not apply in the interpretation of this Agreement and the Loan Documents or any amendment or supplement or
exhibit hereto or thereto. 
  
 SECTION 23.15 Standards for Decisions, Etc.
Unless otherwise provided herein, if the Lender’s approval is required for any matter hereunder, such approval may be granted or withheld in the Lender’s sole and absolute discretion. Unless otherwise provided herein, if the Lender’s
designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such designation, determination, selection, estimate, action or decision shall be made in the Lender’s sole and absolute
discretion. 
  
 SECTION 23.16 Decisions in Writing. Any approval,
designation, determination, selection, action or decision of the Lender or the Borrower must be in writing to be effective. 
  
 SECTION 23.17 Joint and Several Liability. Each Borrower shall be jointly and severally liable for the payment and performance of each obligation of the Borrower
arising under any of the Loan Documents. 
  
 [THE REMAINDER OF THIS
PAGE IS LEFT INTENTIONALLY BLANK] 
  

 -100- 

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

							
	 Borrower

	
	MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee corporation
		
	 By:
	 	 /s/    SIMON R.C. WADSWORTH

	 	 	

	 	 	 Simon R.C. Wadsworth

	 	 	 Executive Vice President

	
	 MID-AMERICA APARTMENTS, L.P.,
 a Tennessee
limited partnership

		
	 By:
	 	 Mid-America Apartment Communities, Inc.,
 a Tennessee corporation, its general partner

			
	 	 	 By:
	 	 /s/    SIMON R.C. WADSWORTH

	 	 	 	 	

	 	 	 	 	 Simon R.C. Wadsworth

	 	 	 	 	 Executive Vice President

  

 -101- 

			
	 Lender
  
 PRUDENTIAL MULTIFAMILY MORTGAGE, INC., a Delaware corporation

		
	 By:
	  	 /s/    SHARON D. SINGLETON

	 	 	

	 Name:
	  	 Sharon D. Singleton

	 Title:
	  	 Vice President

  

 -102- 

 SCHEDULE I 
  
 SUMMARY OF CREDIT FACILITY STRUCTURE 
  

											
	 	  	 	  	 Facility Fees (1)

	  	 Standby Fee

	  	 Variable Facility
Termination Date

	  	 Facility Termination Date

	Initial Commitment	  	 	  	 	  	 	  	 	  	 
	Fixed	  	 	  	57 bps	  	 	  	 	  	 
	Variable	  	$183,372,000	  	67 bps	  	24 bps	  	Nov. 10, 2004	  	24 bps
	Total	  	$183,372,000	  	 	  	 	  	 Extension to 11/10/09
 2nd Ext to 11/10/14
	  	through Variable Facility Termination Date as calculated in Agreement
						
	Original Expanded Commitment	  	Amounts above	  	 	  	 	  	 	  	 
	Fixed	  	 	  	 	  	 	  	 	  	 
	Variable	  	$183,372,000	  	 	  	 	  	 	  	 
	Total	  	$183,372,000	  	 	  	 	  	 	  	 
						
	 	  	Up to	  	 	  	 	  	 	  	 
						
	Fixed	  	 	  	 	  	 	  	 	  	 
	Variable	  	$413,374,000	  	 	  	 	  	 	  	 
	Total	  	$413,374,000	  	 	  	 	  	 	  	 
						
	 	  	Net Amount Equal to	  	 	  	 	  	 	  	 
						
	Fixed	  	 	  	65 bps (2)	  	 	  	 	  	 
	Variable	  	$230,002,000	  	72 bps	  	15 bps	  	Aug. 22, 2007	  	15 bps
	Total	  	$230,002,000	  	 	  	 	  	Extension to 08/22/12	  	through Variable Facility Termination Date as calculated in Agreement
						
	Amended and Restated Commitment (6)	  	Amounts above	  	 	  	 	  	 	  	 
	Fixed	  	 	  	 	  	 	  	 	  	 
	Variable	  	$413,374,000	  	 	  	 	  	 	  	 
	Total	  	$413,374,000	  	 	  	 	  	 	  	 
						
	 	  	Up to	  	 	  	 	  	 	  	 
						
	Fixed	  	 	  	 	  	 	  	 	  	 
	Variable	  	$451,000,000	  	 	  	 	  	 	  	 
	Total	  	$451,000,000	  	 	  	 	  	 	  	 
						
	 	  	Net Amount Equal to	  	 	  	 	  	 	  	 
						
	Fixed	  	 	  	50 bps (3) (5)	  	 	  	 	  	 
	Variable	  	$37,626,000(4)	  	60 bps (5)	  	15 bps	  	Dec. 10, 2008	  	15 bps
	Total	  	$37,626,000	  	 	  	 	  	Extension to 12/10/13	  	through Variable Facility Termination Date as calculated in Agreement

  
 NOTES

  

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

  

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

  

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

  

	(4)	$5.646 million of the Amended and Restated Commitment closed in connection with addition of Wildwood II and Three Oaks II to Collateral Pool.

  

	(5)	Both the Fixed and Variable Facility Fees for the Amended and Restated Commitment are subject to change after October 1, 2004 unless the Borrower pays the Rate
Preservation Fee, in which case the pricing shall not change for so long as the Rate Preservation Fee is paid, provided that in no event shall the Fixed Facility Fee exceed 72 basis points. 

  

	(6)	Although not shown here, the Amended and Restated Commitment includes those amounts by which the Commitment is expanded beyond the amounts shown here to reflect
additional capacity as result of the payoff of the Blackstone JV properties up to a total maximum commitment of $511 million. 

  

	(7)	For purposes of this Schedule, any Advances Outstanding (taking into account any Variable Advances or Fixed Facility Advances) up to an aggregate amount of
$119,367,000 shall be deemed to be part of the Initial Commitment, Advances Outstanding (taking into account any Variable Advances or Fixed Facility Advances) in excess of $119,367,000 but less than or equal to $138,382,000 shall be deemed to be
part of the Original Expansion Commitment, and any Advances Outstanding (taking into account any Variable Advances or Fixed Facility Advances) in excess of $138,382,000 shall be deemed to be part of the Amended and Restated Commitment.

  

 I-1 

 MID-AMERICA APARTMENT COMMUNITIES LP 
  
 SUMMARY OF CREDIT FACILITY STRUCTURE 

																	
	 	  	 	  	 	  	 	  	 	  	 Fee

	  	 	  	 
	 	  	 MAA #1

	  	 MAA #2

	  	 TF Bond

	  	 Total

	  	 Variable

	  	 Standby

	  	 Maturity

	  	 Comments

	Initial Commitment	  	$119,367,000	  	$183,372,000	  	 	  	$302,739,000	  	67 bps	  	24 bps	  	 11/10/04
 Extension to 11/10/09
 2nd Ext to 11/10/14
	  	Based on actual amount outstanding under the Facility as of 8/02.
									
	Original Expanded Commitment	  	 Amounts above
 $119,367,000
 Up to
 $138,382,000
 Net Amount Equal to
 $19,015,000
	  	 Amounts above
 $183,372,000
 Up to
 $413,374,000
 Net Amount Equal to
 $230,002,000
	  	 	  	 Amounts above
 $302,739,000
 Up to
 $551,756,000
 Net Amount Equal to
 $249,017,000
	  	72 bps	  	15 bps	  	 8/22/07
 Extension to 08/22/12
	  	Based on the $250 expansion approved and closed 8/2002 (the “re-structure”) the net amount is slightly off of the $250 because the initial commitment was slightly over the $300 million
($302.739) and the current commitment is slight over the $50 million ($551.756)
									
	Amended and Restated Commitment Count	  	 Amounts above
 $138,382,000
 Up to
 $160,000,000
 Net Amount Equal to
 $21,618,000
	  	 Amounts above
 $413,374,000
 Up to
 $451,000,000
 Net Amount Equal to
 $37,626,000
	  	  
  
  

 
 $100,000,000
	  	 Amounts above
 $551,756,000
 Up to
 $711,000,000
 Net Amount Equal to
 $159,244,000
	  	60 bps	  	15 bps	  	 12/10/08
 Extension to 12/10/13
	  	This is the new $ we just approved. The figure is slightly less than $60 due to rounded figures for max commitment. This does not include the Blackstone capacity which will be added as those DUS
loans are paid off or otherwise transferred.
									
	At 12-10-03:	  	 	  	 	  	 	  	 	  	 	  	 	  	 	  	 
									
	Available	  	$160,000,000	  	$451,000,000	  	$100,000,000	  	$711,000,000	  	 	  	 	  	 	  	 
									
	Collateralized incl Lighthouse	  	$159,507,000	  	$436,608,000	  	$  55,635,000	  	$651,750,000	  	 	  	 	  	 	  	 
									
	Net available but uncollateralized	  	$       493,000	  	$  14,392,000	  	$  44,365,000	  	$  59,250,000	  	 	  	 	  	 	  	 
									
	Expansion capacity	  	$193,000,000	  	$511,000,000	  	$100,000,000	  	$804,000,000	  	 	  	 	  	 	  	 
									
	Expansion less collateralized $	  	$  33,493,000	  	$  74,392,000	  	$  44,365,000	  	 	  	 	  	 	  	 	  	 
									
	Increase in availability	  	$  33,000,000	  	$  60,000,000	  	$             —  	  	 	  	 	  	 	  	 	  	 
									
	Lighthouse	  	 	  	$  17,588,000	  	 	  	 	  	 	  	 	  	 	  	 

  

			
	NOTE:	  	For MAA #1, $21.125 million already closed and collateralized by Los Rios, leaving $493,000 in capacity until Blackstone payoffs.
		
	 	  	For MAA #2,$5.646 million already closed and collateralized by Three Oaks II and Wildwood II, leaving $31,980,000 in capacity.
		
	 	  	In addition, for MAA #2, $17.558 million for Lighthouse Court approved currently and closing concurrently with expansion.

  

 I-2First Amendment to Amended and Restated Master Credit Facility Agreement

 Exhibit 10.13 
  
 FIRST AMENDMENT TO AMENDED AND RESTATED 
 MASTER CREDIT FACILITY AGREEMENT 
  
 THIS FIRST AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the
11th day of December, 2003, by and among (i) (a) MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee corporation
(the “REIT”), (b) MID-AMERICA APARTMENTS, L.P., a Tennessee limited partnership (“OP”) (the REIT and OP being collectively referred to as “Borrower”) and (ii) PRUDENTIAL
MULTIFAMILY MORTGAGE INC., a Delaware corporation (“Lender”). 
  
 RECITALS 
  
 A. Borrower is
a party to that certain Master Credit Facility Agreement dated as of the 22nd day of August, 2002, by and between Borrower and Lender (the “Original Master Agreement”), which has been amended and restated pursuant to that
certain Amended and Restated Master Credit Facility Agreement dated as of December 10, 2003 (the “Master Agreement”). 
  
 B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or
the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreements and Other Loan Documents, dated as of August 22, 2002 and that certain Assignment of Collateral
Agreements and Other Loan Documents, dated as of December 10, 2003 (collectively, the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result
of the Assignment. Fannie Mae has designated the Lender as the servicer of the Loans contemplated by the Master Agreement. Lender is entering into this Amendment in its capacity as servicer of the loan set forth in the Master Agreement. 

 
 C. Borrower and Lender are executing this Amendment pursuant to the Master
Agreement to provide for the addition of the Mortgaged Property known as Lighthouse Court to the Collateral Pool under the terms of the Master Agreement. 
  
 NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Amendment and the Master Agreement, and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows: 
  
 Section 1. Collateral Pool. Exhibit A to the Master Agreement is hereby deleted and replaced with the attached Exhibit A to
reflect the addition of the Lighthouse Court as an Additional Mortgaged Property in the Collateral Pool. 
  
 Section 2. Conservation Easement. Borrower hereby agrees that the conservation easement referenced in the letter attached as Exhibit
B hereto shall be released and amended as provided therein to Lender’s satisfaction within 120 days of the date hereof. Borrower further agrees to remove the Mortgaged Property known as Lighthouse Court from the Collateral Pool if 

  

 - 1 - 

 
the above-referenced conservation easement is not released and amended within such time-frame. 
  
 Section 3. Capitalized Terms. All capitalized terms used in this Amendment which are not specifically defined
herein shall have the respective meanings set forth in the Master Agreement. 
  
 Section 4. Reaffirmation. The REIT and OP hereby reaffirm their obligations under the Agreement as Borrower. 
  
 Section 5. Full Force and Effect. Except as expressly modified by this Amendment, all terms and conditions of the Master Agreement shall
continue in full force and effect. 
  
 Section 6.
Counterparts. This Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument. 
  
 [Remainder of this page intentionally left blank] 
  

 -2- 

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

			
	 BORROWER:
  

	 MID-AMERICA APARTMENT COMMUNITIES,
 INC., a
Tennessee corporation

		
	By:	 	/s/    SIMON R.C. WADSWORTH
	 	 	

	 	 	 Simon R.C. Wadsworth
 Executive Vice President

  

					
	 MID-AMERICA APARTMENTS, L.P.,
 a Tennessee
limited partnership

		
	By:	 	 Mid-America Apartment Communities, Inc.,
 a
Tennessee corporation, its general partner
  

	 	 	By:	 	/s/    SIMON R.C. WADSWORTH
	 	 	 	 	

	 	 	 	 	 Simon R.C. Wadsworth
 Executive Vice President

  
 [Signatures
follow on next page] 
  

 -3- 

			
	 LENDER:
  

	PRUDENTIAL MULTIFAMILY MORTGAGE INC., a Delaware corporation
		
	By:	 	 /s/    SHARON D. SINGLETON

	Name:	 	Sharon D. Singleton 
	Title:	 	Vice President

  
 [Signatures
follow on next page] 
  

 -4- 

 EXHIBIT A 
  

SCHEDULE OF INITIAL MORTGAGED PROPERTIES 
 AND INITIAL VALUATIONS 
  

							
	 Property Name

	  	 County

	  	 Property Location

	  	Initial Valuation

	 Abbington Place
	  	Madison	  	Huntsville, AL	  	$4,670,000
	 Paddock Club Montgomery
	  	Montgomery	  	Montgomery, AL	  	$10,370,000
	 Terraces at Towne Lake II
	  	Cherokee	  	Woodstock, GA	  	$14,870,000
	 Terraces at Fieldstone
	  	Rockdale	  	Conyers, GA	  	$20,700,000
	 Paddock Club Columbia I and II
	  	Richland	  	Columbia, SC	  	$13,420,000
	 The Mansion
	  	Fayette	  	Lexington, KY	  	$7,630,000
	 Brentwood Downs
	  	Davidson	  	Nashville, TN	  	$14,600,000
	 Calais Forest
	  	Pulaski	  	Little Rock, AR	  	$9,900,000
	 Southland Station II
	  	Houston	  	Warner Robins, GA	  	$8,050,000
	 Fairways at Hartland
	  	Warren	  	Bowling Green, KY	  	$10,900,000
	 Paddock Club Murfreesboro
	  	Rutherford	  	Murfreesboro, TN	  	$14,160,000
	 Whisperwood
	  	Muscogee	  	Columbus, GA	  	$49,900,000
	 River Trace I
	  	Shelby	  	Memphis, TN	  	$8,975,000
	 Wildwood I
	  	Thomas	  	Thomasville, GA	  	$3,825,000
	 Three Oaks I
	  	Lowndes	  	Valdosta, GA	  	$3,950,000
	 Westbury Springs
	  	Gwinnett	  	Lilburn, GA	  	$6,775,000
	 Hickory Farms
	  	Shelby	  	Memphis, TN	  	$6,475,000
	 Gleneagles
	  	Shelby	  	Memphis, TN	  	$6,850,000
	 The Oaks
	  	Madison	  	Jackson, TN	  	$2,825,000
	 TPC Greenville
	  	Greenville	  	Greenville, SC	  	$8,930,000
	 TPC Huntsville
	  	Madison	  	Huntsville, AL	  	$17,800,000
	 Eagle Ridge
	  	Birmingham	  	Birmingham, AL	  	$8,400,000
	 River Hills
	  	Grenada	  	Grenada, MS	  	$1,600,000
	 Stonemill Village
	  	Jefferson	  	Louisville, KY	  	$19,825,000
	 Woodwinds
	  	Aiken	  	Aiken, SC	  	$7,000,000
	 Tanglewood
	  	Anderson	  	Anderson, SC	  	$5,110,000
	 Wood Hollow
	  	Duval	  	Jacksonville, FL	  	$22,800,000
	 Terraces at Towne Lake I
	  	Cherokee	  	Woodstock, GA	  	$16,450,000
	 Grand Reserve
	  	Fayette	  	Lexington, KY	  	$23,200,000
	 Island Retreat
	  	Glynn	  	St. Simons Island, GA	  	$5,400,000
	 Belmere
	  	Hillsborough	  	Tampa, FL	  	$11,150,000
	 Bradford Chase (WV)
	  	Madison	  	Jackson, TN	  	$4,960,000
	 Crosswinds
	  	Rankin	  	Jackson, MS	  	$13,420,000
	 Fairways at Royal Oak
	  	Clermont	  	Cincinnati, OH	  	$9,800,000
	 Hermitage at Beechtree
	  	Wake	  	Cary, NC	  	$8,720,000
	 Hidden Lake II
	  	Fulton	  	Union City, GA	  	$7,050,000
	 High Ridge
	  	Clarke	  	Athens, GA	  	$6,600,000
	 Howell Commons
	  	Greenville	  	Greenville, SC	  	$12,380,000
	 Kirby Station
	  	Shelby	  	Memphis, TN	  	$15,800,000
	 Lakepointe
	  	Fayette	  	Lexington, KY	  	$4,425,000
	 Lakeside
	  	Duval	  	Jacksonville, FL	  	$21,100,000
	 Marsh Oaks
	  	Duval	  	Atlantic Beach, FL	  	$5,500,000

  

								
	 Property Name

	  	 County

	  	 Property Location

	  	Initial Valuation

	 Napa Valley
	  	Pulaski	  	Little Rock, AR	  	$	10,500,000
	 Park Haywood
	  	Greenville	  	Greenville, SC	  	$	5,600,000
	 Park Place
	  	Spartanburg	  	Spartanburg, SC	  	$	6,470,000
	 Pear Orchard
	  	Madison	  	Jackson, MS	  	$	15,700,000
	 Savannah Creek
	  	DeSoto	  	Southaven, MS (Memphis suburb)	  	$	9,550,000
	 Shenandoah Petersburg
	  	Columbia	  	Augusta, GA	  	$	9,567,000
	 Somerset
	  	Hinds	  	Jackson, MS	  	$	3,160,000
	 Southland Station I
	  	Houston	  	Warner Robins, GA	  	$	7,300,000
	 Steeplechase
	  	Hamilton	  	Chattanooga, TN	  	$	4,000,000
	 Sutton Place
	  	DeSoto	  	Southaven, MS (Memphis suburb)	  	$	10,800,000
	 Tiffany Oaks
	  	Seminole	  	Altamonte Springs, FL	  	$	14,750,000
	 Village
	  	Fayette	  	Lexington, KY	  	$	10,340,000
	 Westside Creek I
	  	Pulaski	  	Little Rock, AR	  	$	7,010,000
	 Willow Creek
	  	Muscogee	  	Columbus, GA	  	$	10,150,000
	 Links at Carrollwood
	  	Hillsborough	  	Tampa, FL	  	$	13,050,000
	 Grand View
	  	Nashville	  	Nashville, TN	  	$	26,805,000
	 Three Oaks II
	  	Lowndes	  	Valdosta, GA	  	$	4,737,000
	 Wildwood II
	  	Thomas	  	Thomasville, GA	  	$	3,950,000
	 Lighthouse Court
	  	Clay	  	Orange Park, FL	  	$	40,092,000

  

 EXHIBIT B 
  

(St. John’s Letter Attached)

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