10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission file number 1-10524

UNITED DOMINION REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization) 54-0857512
(I.R.S. Employer
Identification No.)

1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129
(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code: (720) 283-6120

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value Preferred Stock Purchase Rights 8.60% Series B Cumulative Redeemable Preferred Stock 8.50% Monthly Income Notes Due 2008	New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or other information statements incorporated by reference into Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

The aggregate market value of the shares of common stock held by non-affiliates on June 30, 2006 was approximately $3.7 billion. This calculation excludes shares of common stock held by the registrant’s officers and directors and each person known by the registrant to beneficially own more than 5% of the registrant’s outstanding shares, as such persons may be deemed to be affiliates. This determination of affiliate status should not be deemed conclusive for any other purpose. As of February 20, 2007 there were 135,544,953 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this Report, to the extent not set forth herein, is incorporated by reference from the registrant’s definitive proxy statement for the Annual Meeting of Stockholders to be held on May 8, 2007.

TABLE OF CONTENTS

			Page
PART I
	Item 1.	Business		2
	Item 1A.	Risk Factors		11
	Item 1B.	Unresolved Staff Comments		18
	Item 2.	Properties		18
	Item 3.	Legal Proceedings		19
	Item 4.	Submission of Matters to a Vote of Security Holders		19
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		20
	Item 6.	Selected Financial Data		24
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		40
	Item 8.	Financial Statements and Supplementary Data		40
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		40
	Item 9A.	Controls and Procedures		40
	Item 9B.	Other Information		41
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance		41
	Item 11.	Executive Compensation		41
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		41
	Item 13.	Certain Relationships and Related Transactions, and Director Independence		42
	Item 14.	Principal Accountant Fees and Services		42
PART IV
	Item 15.	Exhibits, Financial Statement Schedules		42
Credit Agreement - August 14, 2001
Credit Agreement - December 12, 2001
Amended and Restated Master Credit Facility Agreement
Computation of Ratio of Earnings to Fixed Charges
Subsidiaries
Consent of Independent Registered Public Accounting Firm
Rule 13a-14(a) Certification of CEO
Rule 13a-14(a) Certification of CFO
Section 1350 Certification of CEO
Section 1350 Certification of CFO

PART I

Item 1.   BUSINESS

General

United Dominion Realty Trust, Inc. is a self administered real estate investment trust, or REIT, that owns, acquires, renovates, develops, and manages apartment communities nationwide. At December 31, 2006, our apartment portfolio included 242 communities located in 33 markets, with a total of 70,339 completed apartment homes. In addition, we had five apartment communities under development.

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code. To continue to qualify as a REIT, we must continue to meet certain tests which, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of our REIT taxable income (other than our net capital gain) to our stockholders. As a qualified REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on our net income to the extent we distribute such net income to our stockholders. In 2006, we declared total distributions of $1.25 per common share to our stockholders, which represents our 30th year of consecutive dividend increases to our stockholders.

We were formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our corporate headquarters is located at 400 East Cary Street, Richmond, Virginia. Our principal executive offices are located at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado. As of February 20, 2007, we had 1,809 full-time employees and 127 part-time employees.

Our subsidiaries include two operating partnerships, Heritage Communities L.P., a Delaware limited partnership, and United Dominion Realty L.P., a Delaware limited partnership. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” “the company,” or “UDR” refer collectively to United Dominion Realty Trust, Inc. and its subsidiaries.

2006 Accomplishments

•  We increased our common stock dividend for the 30th consecutive year.

•  We completed over $1.2 billion of capital transactions in 2006.

•  We authorized a new 10 million share repurchase program that replaced our previous 11 million share repurchase program.

•  We acquired 2,763 apartment homes in eight communities for approximately $327.5 million and two parcels of land for $19.9 million.

•  We completed the disposition of 24 apartment communities with 7,653 apartment homes for an aggregate sales price of approximately $444.9 million. In addition, we sold 384 condominiums within four communities for a total consideration of $72.1 million.

Business Objectives and Operating Strategies

Our principal business objective is to maximize the economic returns of our apartment communities to provide our stockholders with the greatest possible total return and value. To achieve this objective, we intend to continue to pursue the following goals and strategies:

•  own and operate apartments across a national platform, thus enhancing stability and predictability of returns to our stockholders,

•  manage real estate cycles by taking an opportunistic approach to buying, selling, and building apartment communities,

•  empower site associates to manage our communities efficiently and effectively,

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•  measure and reward associates based on specific performance targets, and

•  manage our capital structure to ensure predictability of earnings and dividends.

Acquisitions

During 2006, using the proceeds from our disposition program, as well as debt offerings, we acquired eight communities with 2,763 apartment homes at a total cost of approximately $327.5 million, including the assumption of secured debt. In addition, we purchased two parcels of land for $19.9 million.

When evaluating potential acquisitions, we consider:

•  research in the following areas: population growth, cost of alternative housing, overall potential for economic growth and the tax and regulatory environment of the community in which the property is located,

•  geographic location, including proximity to our existing communities which can deliver significant economies of scale,

•  construction quality, condition and design of the community,

•  current and projected cash flow of the property and the ability to increase cash flow,

•  potential for capital appreciation of the property,

•  ability to increase the value and profitability of the property through upgrades and repositioning,

•  terms of resident leases, including the potential for rent increases,

•  occupancy and demand by residents for properties of a similar type in the vicinity,

•  prospects for liquidity through sale, financing, or refinancing of the property, and

•  competition from existing multifamily communities and the potential for the construction of new multifamily properties in the area.

The following table summarizes our apartment acquisitions and our year-end ownership position for the past five years (dollars in thousands):

	2006		2005		2004		2003		2002
Homes acquired		2,763		2,561		8,060		5,220		4,611
Homes owned at December 31		70,339		74,875		78,855		76,244		74,480
Total real estate owned, at carrying value	$	5,820,122	$	5,512,424	$	5,243,296	$	4,351,551	$	3,967,483

Dispositions

We regularly monitor and adjust our assets to increase the quality and performance of our portfolio. During 2006, we sold over 7,600 of our slower growing, non-core apartment homes while exiting some markets in an effort to increase the quality and performance of our portfolio. Proceeds from the disposition program were used primarily to reduce debt and fund acquisitions.

Factors we consider in deciding whether to dispose of a property include:

•  current market price for an asset compared to projected economics for that asset,

•  potential increases in new construction in the market area,

•  areas where the economy is not expected to grow substantially, and

•  markets where we do not intend to establish long-term concentration.

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At December 31, 2006, we had two communities with a total of 475 apartment homes, one community with a total of 320 condominiums, one commercial unit, and one parcel of land classified as real estate held for disposition. We are in the market for replacement properties that will correspond with our expected sales activity to prevent dilution to earnings.

Upgrading and Development Activities

During 2006, we continued to reposition properties in targeted markets where we concluded there was an opportunity to add value and achieve greater than inflationary increases in rents over the long term. In 2006, we spent $21.6 million on five development projects that are expected to be completed in 2007 and 2008. Revenue enhancing capital expenditures, including kitchen and bath renovations, and other extensive interior upgrades totaled $144.1 million or $2,002 per home for the year ended December 31, 2006. In addition, we spent $37.0 million on major renovation projects that included major structural changes and/or architectural revisions to existing buildings and the wiring and/or re-plumbing of an entire building.

The following wholly owned projects were under development as of December 31, 2006:

	Number of		Completed		Cost to		Budgeted		Estimated		Expected
	Apartment		Apartment		Date		Cost		Cost		Completion
	Homes		Homes		(In thousands)		(In thousands)		Per Home		Date
2000 Post — Phase III
San Francisco, CA		24		24	$	10,254	$	11,000	$	458,300		1Q07
Villas at Ridgeview Townhomes
Plano, TX		48		—		7,022		10,000		208,300		3Q07
Ridgeview Apartments
Plano, TX		202		—		8,296		18,000		89,100		3Q07
Northwest Houston — Phase I
Houston, TX		320		—		4,421		22,000		68,800		2Q08
Lincoln Towne Square — Phase II
Plano, TX		302		—		4,384		26,000		86,100		3Q08
		896		24	$	34,377	$	87,000	$	97,100

In addition, we owned five parcels of land held for future development aggregating $35.4 million at December 31, 2006.

The following consolidated joint venture projects were under development as of December 31, 2006:

	Number of		Completed		Cost to		Budgeted		Estimated		Expected
	Apartment		Apartment		Date		Cost		Cost		Completion
	Homes		Homes		(In thousands)		(In thousands)		Per Home		Date
Jefferson at Marina del Rey
Marina del Rey, CA		298		—	$	76,601	$	138,000	$	463,100		2Q08
Ashwood Commons
Bellevue, WA		271		—		23,660		97,000		357,900		4Q08
Bellevue Plaza
Bellevue, WA		400		—		34,220		135,000		270,000		4Q09
		969		—	$	134,481	$	370,000	$	381,800

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Financing Activities

As part of our plan to strengthen our capital structure, we utilized proceeds from dispositions, debt and equity offerings and refinancings to extend maturities, pay down existing debt, and acquire apartment communities. The following is a summary of our major financing activities in 2006:

•  Repaid $70.3 million of secured debt and $138.8 million of unsecured debt.

•  Authorized a new 10 million share repurchase program in February 2006. This program replaces our previous 11 million share repurchase program under which we repurchased approximately 10 million shares.

•  Sold $125 million aggregate principal amount of 6.05% senior unsecured notes due June 2013 in June 2006 under our medium-term note program. The net proceeds of approximately $124 million were used for debt repayment.

•  Sold $250 million aggregate principal amount of 3.625% convertible senior unsecured notes due 2011 in October 2006. The net proceeds of approximately $245 million were used for the repayment of indebtedness under our revolving credit facility, the cost of a capped call transaction, and for other general corporate purposes. The capped call instrument effectively increased the conversion premium to 40%.

Markets and Competitive Conditions

At December 31, 2006, we owned 242 apartment communities in 33 markets in 16 states. When comparing fourth quarter 2006 to the same period in the prior year, 90% of the portfolio generated positive revenue growth and 75% of the portfolio generated positive net operating income growth. We have a geographically diverse portfolio and we believe that this diversification increases investment opportunity and decreases the risk associated with cyclical local real estate markets and economies, thereby increasing the stability and predictability of our earnings.

We believe changing demographics will have a significant impact on the apartment industry over the next two decades. In particular, we believe the annual number of young people entering the workforce and creating households will be significantly higher over the next 10 to 15 years as compared to the number who entered the workforce over the past 10 years. The number of single people and single parent households continues to grow significantly. The immigrant population is also expected to grow at an accelerated pace. Each of these population segments has a high propensity to rent.

In many of our markets, competition for new residents is intense. Some competing communities offer features that our communities do not have. Competing communities can use concessions or lower rents to obtain temporary competitive advantages. Also, some competing communities are larger or newer than our communities. The competitive position of each community is different depending upon many factors including sub-market supply and demand. In addition, other real estate investors compete with us to acquire existing properties and to develop new properties. These competitors include insurance companies, pension and investment funds, developer partnerships, investment companies and other apartment REITs. This competition could increase prices for properties of the type that we would likely pursue, and our competitors may have greater resources, or lower capital costs, than we do.

We believe that, in general, we are well-positioned to compete effectively for residents and investments. We believe our competitive advantages include:

•  a fully integrated organization with property management, development, acquisition, marketing and financing expertise,

•  scalable operating and support systems,

•  purchasing power,

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•  geographic diversification with a presence in 33 markets across the country, and

•  significant presence in many of our major markets that allows us to be a local operating expert.

Moving forward, we will continue to emphasize aggressive lease management, improved expense control, increased resident retention efforts and the realignment of employee incentive plans tied to our bottom line performance. We believe this plan of operation, coupled with the portfolio’s strengths in targeting renters across a geographically diverse platform, should position us for continued operational improvement.

Communities

At December 31, 2006, our apartment portfolio included 242 communities having a total of 70,339 completed apartment homes. In addition, we had five apartment communities under development. The overall quality of our portfolio has significantly improved since 2001 with the disposition of non-core apartment homes and our upgrade and rehabilitation program. The upgrading of the portfolio provides several key benefits related to portfolio profitability. It enables us to raise rents more significantly and to attract residents with higher levels of disposable income who are more likely to accept the transfer of expenses, such as water and sewer costs, from the landlord to the resident. In addition, it potentially reduces recurring capital expenditures per apartment home, and therefore should result in increased cash flow.

Same Community Comparison

For 2006, same community property operating income increased 8.6% or $30.4 million compared to 2005. The increase in property operating income was primarily attributable to a 6.0% or $34.2 million increase in revenues from rental and other income that was offset by a 1.8% or $3.9 million increase in operating expenses. The increase in revenues from rental and other income was primarily driven by a 4.9% or $28.4 million increase in rental rates, a 17.6% or $2.2 million decrease in concession expense, and a 12.5% or $5.0 million increase in utility reimbursement income and fee income. Physical occupancy increased 0.1% to 94.7%.

The increase in property operating expenses was primarily driven by a 15.8% or $1.6 million increase in insurance costs, a 4.4% or $1.5 million increase in utility costs, a 2.8% or $1.5 million increase in personnel costs, a 1.1% or $0.4 million increase in repair and maintenance expenses, and a 0.5% or $0.3 million increase in real estate taxes. These increases in operating expenses were partially offset by a 6.0% or $1.2 million decrease in administrative and marketing expenses.

Customers

Our upgrade and rehabilitation programs enable us to raise rents and attract residents with higher levels of disposable income who are more likely to accept the transfer of expenses, such as water and sewer costs, from the landlord to the resident. We believe this segment provides the highest profit potential in terms of rent growth, stability of occupancy and investment opportunities.

We believe there will be a significant increase in the number of younger renters over the next 10 to 15 years, and that the immigrant population will remain a significant and growing part of the renter base. Accordingly, we plan to target some of our incremental investments to communities that will be attractive to younger households or to the immigrant populations. These communities will often be located close to where these residents work, shop and play.

Tax Matters

We have elected to be taxed as a REIT under the Code. To continue to qualify as a REIT, we must continue to meet certain tests that, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of our REIT taxable income (other than net capital gains) to our stockholders. Provided we maintain our qualification as a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on

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our net income to the extent such net income is distributed to our stockholders. Even if we continue to qualify as a REIT, we will continue to be subject to certain federal, state and local taxes on our income and property.

We may utilize taxable REIT subsidiaries to engage in activities that REITs may be prohibited from performing, including the provision of management and other services to third parties and the conduct of certain nonqualifying real estate transactions. Taxable REIT subsidiaries generally are taxable as regular corporations and therefore are subject to federal, state and local income taxes.

Inflation

Substantially all of our leases are for a term of one year or less, which may enable us to realize increased rents upon renewal of existing leases or the beginning of new leases. Such short-term leases generally minimize the risk to us of the adverse effects of inflation, although as a general rule these leases permit residents to leave at the end of the lease term without penalty. Short-term leases and relatively consistent demand allow rents to provide an attractive hedge against inflation.

Environmental Matters

Various environmental laws govern certain aspects of the ongoing operation of our communities. Such environmental laws include those regulating the existence of asbestos-containing materials in buildings, management of surfaces with lead-based paint (and notices to residents about the lead-based paint), use of active underground petroleum storage tanks, and waste-management activities. The failure to comply with such requirements could subject us to a government enforcement action and/or claims for damages by a private party.

To date, compliance with federal, state and local environmental protection regulations has not had a material effect on our capital expenditures, earnings or competitive position. We have a property management plan for hazardous materials. As part of the plan, Phase I environmental site investigations and reports have been completed for each property we acquire. In addition, all proposed acquisitions are inspected prior to acquisition. The inspections are conducted by qualified environmental consultants, and we review the issued report prior to the purchase or development of any property. Nevertheless, it is possible that our environmental assessments will not reveal all environmental liabilities, or that some material environmental liabilities exist of which we are unaware. In some cases, we have abandoned otherwise economically attractive acquisitions because the costs of removal or control of hazardous materials have been prohibitive or we have been unwilling to accept the potential risks involved. We do not believe we will be required to engage in any large-scale abatement at any of our properties. We believe that through professional environmental inspections and testing for asbestos, lead paint and other hazardous materials, coupled with a relatively conservative posture toward accepting known environmental risk, we can minimize our exposure to potential liability associated with environmental hazards.

Federal legislation requires owners and landlords of residential housing constructed prior to 1978 to disclose to potential residents or purchasers of the communities any known lead paint hazards and imposes treble damages for failure to provide such notification. In addition, lead based paint in any of the communities may result in lead poisoning in children residing in that community if chips or particles of such lead based paint are ingested, and we may be held liable under state laws for any such injuries caused by ingestion of lead based paint by children living at the communities.

We are unaware of any environmental hazards at any of our properties that individually or in the aggregate may have a material adverse impact on our operations or financial position. We have not been notified by any governmental authority, and we are not otherwise aware, of any material non-compliance, liability, or claim relating to environmental liabilities in connection with any of our properties. We do not believe that the cost of continued compliance with applicable environmental laws and regulations will have a material adverse effect on us or our financial condition or results of operations. Future environmental laws, regulations, or ordinances, however, may require additional remediation of existing conditions that are not currently actionable. Also, if more stringent requirements are imposed on us in the future, the costs of compliance could have a material adverse effect on us and our financial condition.

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Insurance

We carry comprehensive general liability coverage on our communities, with limits of liability customary within the industry to insure against liability claims and related defense costs. We are also insured, in all material respects, against the risk of direct physical damage in amounts necessary to reimburse us on a replacement cost basis for costs incurred to repair or rebuild each property, including loss of rental income during the reconstruction period.

Executive Officers of the Company

The following table sets forth information about our executive officers as of February 20, 2007. The executive officers listed below serve in their respective capacities at the discretion of our board of directors.

Name	Age		Office	Since
Thomas W. Toomey		46	Chief Executive Officer — President and Director		2001
W. Mark Wallis		56	Senior Executive Vice President		2001
Michael A. Ernst		46	Executive Vice President & Chief Financial Officer		2006
Martha R. Carlin		44	Executive Vice President — Operations		2001
Richard A. Giannotti		51	Executive Vice President — Asset Quality		1985
Matthew T. Akin		39	Senior Vice President — Acquisitions & Dispositions		1994
Lester C. Boeckel		58	Senior Vice President — Condominiums		2001
Mark M. Culwell, Jr.		55	Senior Vice President — Development		2006
Erin Ditto O’Brien		37	Senior Vice President — Director Property Operations		1996
Patrick S. Gregory		57	Senior Vice President & Chief Information Officer		1997
David L. Messenger		36	Senior Vice President & Chief Accounting Officer		2002
Thomas A. Spangler		46	Senior Vice President — Business Development		1998
S. Douglas Walker		51	Senior Vice President — Transactions		2006
Mary Ellen Norwood		52	Vice President — Legal Administration & Secretary		2001
Thomas P. Simon		46	Vice President & Treasurer		2006

Set forth below is certain biographical information about our executive officers.

Mr. Toomey spearheads the vision and strategic direction of the company and oversees its executive officers. He joined us in February 2001 as President, Chief Executive Officer and Director. Prior to joining us, Mr. Toomey was with Apartment Investment and Management Company (AIMCO) from January 1996 until February 2001, where he served as Chief Operating Officer for two years and Chief Financial Officer for four years. During his tenure at AIMCO, Mr. Toomey was instrumental in the growth of AIMCO from 34,000 apartment homes to 360,000 apartment homes. He has also served, from 1990 to 1995, as a Senior Vice President and Treasurer at Lincoln Property Company, a national real estate development, property management and real estate consulting company. Mr. Toomey began his career at Arthur Andersen & Co. serving real estate and banking clients as an Audit Manager. He currently serves as a member of the boards of the National Association of Real Estate Investment Trusts and the National Multihousing Council, and he serves as a consultant to the Homeland Security Task Force of the Real Estate Roundtable and Chairman of the Pandemic Flu Preparedness Committee of the Real Estate Roundtable.

Mr. Wallis oversees the areas of acquisitions, dispositions, condominium conversions, asset quality and development. He joined us in April 2001 as Senior Executive Vice President responsible for acquisitions, dispositions, legal and certain administrative matters. Since that time, his focus has shifted to acquisitions, dispositions, asset quality, condominium conversions and development. Prior to joining us, Mr. Wallis was the

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President of Golden Living Communities, a company he established in 1995 to develop senior housing. During his tenure at Golden Living, Mr. Wallis was involved in the development of eight communities containing over 1,200 assisted and independent living apartments. From 1980 to 1995, Mr. Wallis was Executive Vice President of Finance and Administration at Lincoln Property Company where he handled interim and permanent financing for office, retail, multi-family and mixed-use developments. His responsibilities also included the negotiation of acquisitions, dispositions, and management contracts, and oversaw the direction of the national accounting and computer services divisions. Prior to joining Lincoln, Mr. Wallis served as Vice President of Finance for Folsom Investments, Inc., a large diversified real estate developer. Mr. Wallis began his career as an auditor at Alford, Meroney and Company, a Dallas CPA firm.

Mr. Ernst oversees the areas of corporate accounting, financial planning and analysis, investor relations, treasury operations, tax and property tax administration, risk management, SEC reporting and legal administration. He joined us in July 2006 as Executive Vice President and Chief Financial Officer. Prior to joining us, Mr. Ernst was with Prentiss Properties Trust (Prentiss), where he most recently served as Executive Vice President and Chief Financial Officer. He joined Prentiss in 1997 in the role of Vice President and Treasurer, and was promoted to Senior Vice President and Chief Financial Officer in 1999, and then to Executive Vice President and Chief Financial Officer in 2001. During his tenure at Prentiss, Mr. Ernst was involved in the development of corporate strategy, was active in corporate mergers and acquisitions activity and structured in excess of $3.5 billion in capital transactions. He was a member of Prentiss’s investment committee and was responsible for corporate and property accounting, capital markets, investor relations and financial planning and analysis. Prior to that, Mr. Ernst worked for Nations Bank, now Bank of America, where he was a Senior Vice President in their real estate finance group.

Ms. Carlin oversees all operations, including property operations, human resources, technology, internet strategy and business development. She joined the company in March 2001 as Senior Vice President responsible for operational efficiencies and revenue enhancement. She was promoted to Senior Vice President, Director of Property Operations in 2004 and to Executive Vice President, Director of Property Operations in 2005. Ms. Carlin was Senior Vice President of Operations for opsXchange, Inc., a real estate procurement technology developer, from 1999 until March 2001. Prior to that, Ms. Carlin was with Apartment Investment and Management Company, from 1996 through 1999, where she served as Senior Vice President of Ancillary Services, President of Buyers Access and was involved in Dispositions and Secured Financing. Ms. Carlin began her accounting career as a member of Arthur Andersen’s Real Estate Services Group.

Mr. Giannotti oversees redevelopment projects in the mid-Atlantic region. He joined us in September 1985 as Director of Development and Construction. He was elected Assistant Vice President in 1988, Vice President in 1989, and Senior Vice President in 1996. In 1998, he was assigned the additional responsibilities of Director of Development for the Eastern Region. In 2003 Mr. Giannotti was promoted to Executive Vice President — Asset Quality to manage the company’s Asset Quality program and to be responsible for the direction of recurring capital expenditures for asset preservation, initial capital expenditures relating to acquisitions and redevelopment projects. In 2006 Mr. Giannotti’s responsibilities shifted to focus on acquisition efforts and development projects in the mid-Atlantic region as well as redevelopment projects.

Mr. Akin oversees our acquisition and disposition efforts. He joined us in 1996 in connection with the merger with SouthWest Property Trust, where he had been a Financial Analyst since 1994. He was promoted to Due Diligence Analyst in April 1998 and to Asset Manager for the Western Region in 1999. Mr. Akin was promoted to Vice President, Senior Business Analyst in September 2000 and his focus shifted to acquisitions for the Western Region. In May 2004 he was promoted to Vice President — Acquisitions, and in August 2006 he was promoted to Senior Vice President — Acquisitions and Dispositions. Prior to joining SouthWest Property Trust, Mr. Akin was with Lexford Properties from 1989 to 1994, where he began as Staff Accountant and was promoted to Assistant Controller.

Mr. Boeckel oversees the conversion of existing apartment properties, the acquisition of properties for conversion, and the development of condominium communities. He joined us in July 2001 as Vice President of Dispositions and Acquisitions and was promoted in February 2002 to Senior Vice President — Dispositions and Acquisitions. His title was changed to Senior Vice President — Condominiums in December of 2004,

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when his focus shifted from acquisitions and dispositions to condo conversions and the development of multi-family for-sale housing. Prior to joining us, Mr. Boeckel was with Apartment Investment and Management Company (AIMCO), from 1998 to 2001. Mr. Boeckel served as Regional Vice President, a position with operating responsibilities for a portfolio of 12,000 apartment homes, and as Senior Vice President of Asset Management. Before joining AIMCO, Mr. Boeckel had over 20 years of real estate experience with various firms, including a national multi-family development company, a pension fund advisor, a regional investment banking firm and several national apartment syndication firms.

Mr. Culwell oversees all aspects of in-house development, joint venture development and pre-sale opportunities. He joined us in June 2006 as Senior Vice President — Development. Prior to joining us, Mr. Culwell served as Regional Vice President of Development for Gables Residential, where he established a $300 million pipeline of new development and redevelopment opportunities. Before joining Gables Residential, Mr. Culwell had over 30 years of real estate experience, including working for Elsinore Group, LLC, Lexford Residential Trust, Cornerstone Housing Corporation and Trammell Crow Residential Company, where his development and construction responsibilities included site selection and acquisition, construction oversight, asset management, as well as obtaining financing for acquisitions and rehabilitations. Mr. Culwell began his career, in Houston, as a broker with Vallone and Associates Real Estate Brokerage.

Ms. O’Brien oversees our property operations. She joined us in 1996 as a Community Director and in 1997 she was promoted to Assistant Vice President, District Manager for our Greensboro, North Carolina portfolio. In 2001, Ms. O’Brien joined a real estate company headquartered in Greensboro as a Regional Manager, and then returned to UDR the same year as a Pricing Manager. In June 2002, she was promoted to the position of District Manager, and in October 2003 she was promoted to Vice President-Operations, which encompassed all of North Carolina except Charlotte. In November 2004, she was promoted to Vice President-Operations, which expanded her responsibilities to the entire portfolio. In January 2007, she was promoted to Senior Vice President-Property Operations. Prior to joining us, Ms. O’Brien served as a Property Manager, a Leasing Director and a Regional Marketing Director for several national multi-family housing companies, where her focus was primarily on the development of marketing plans and troubleshooting for underperforming properties.

Mr. Gregory oversees all aspects of our Technology Management. He joined us in March 1997 as Vice President, Chief Information Officer, responsible for the planning and management of all Information Services related activities, including systems development, network operations, training, enterprise applications and end user support. In 1999, Mr. Gregory was promoted to Senior Vice President, Chief Information Officer. In addition to oversight of Information Services, his responsibilities include the development of a strategic technology plan for the company and ensuring that the company’s technology supports the company’s strategic business goals as well as the day-to-day operational needs. Prior to joining us, Mr. Gregory was with Crestar Bank for over 20 years, where he began as a Training Manager, managing the technical training for the Information Systems professionals. He was promoted to Solution Center Manager, where he managed the introduction and assimilation of fourth generation languages, personal computers, personal productivity software and local area networks; to Internet Developer, where he researched new technologies and developed internet-based applications, and identified new technologies that would lower costs and improve services to both internal and external customers.

Mr. Messenger oversees all aspects of our accounting functions. He joined us in August 2002 as Vice President and Controller. In that role, Mr. Messenger was responsible for SEC reporting, Sarbanes-Oxley compliance and supervision of all accounting functions. In March 2006, Mr. Messenger was promoted to Vice President and Chief Accounting Officer. In January 2007, Mr. Messenger was promoted to Senior Vice President and Chief Accounting Officer. Prior to joining us, Mr. Messenger was owner and President of TRC Management Company, a restaurant management company, in Chicago. He has worked as a Controller at HMS Resource, Inc. Mr. Messenger began his career with Ernst & Young LLP, as a manager in their Chicago real estate division.

Mr. Spangler oversees internal audit, utilities management, procurement and non-rental revenue programs. He joined us in August 1998 as Assistant Vice President, Operational Planning and Asset Management, and

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was promoted to Vice President, Director of Operational Planning and Asset Management that same year. He was promoted to Senior Vice President — Business Development in February 2003. Prior to joining us, Mr. Spangler served for nine years as an Asset Manager for Summit Enterprises, Inc. of Virginia, a private investment management firm, where he oversaw a portfolio consisting of agricultural, commercial, mixed-use commercial, industrial and residential properties.

Mr. Walker oversees our Asset Quality, Kitchen & Bath and “Green Building” programs in addition to all non-residential owned and leased real estate. He joined us in May 2006 as Senior Vice President — Transactions. Prior to joining us, Mr. Walker served as a consultant to the multi-family industry. He served as President of Harwood Pacific, a Dallas-based developer of mixed-use high-rise office projects. He was also President of Harwood Management, a division of Harwood International, from 1994 to 2002, where he was responsible for operations of an $800 million portfolio of properties in Europe and the U.S.

Ms. Norwood oversees our legal department, coordinates outside legal services and is our Corporate Secretary. She joined us in August 2001 as Vice President — Legal Administration and Corporate Secretary. Prior to joining us, Ms. Norwood was employed by Centex Corporation in various legal capacities for 15 years, the most recent of which was as its Legal Administrator. Centex is a New York Stock Exchange listed company that operates in the home building, financial services, construction products, construction services and investment real estate business segments.

Mr. Simon oversees capital markets and treasury management. He joined us in October 2006 as Vice President and Treasurer. Prior to joining us, Mr. Simon was with Prentiss Properties Trust (Prentiss) where he most recently served as Senior Vice President and Treasurer. Mr. Simon’s tenure at Prentiss began in 1985 when he joined Cadillac Fairview US, a publicly-held precursor to Prentiss, in the role of tax analyst. In 1987 he was promoted to Corporate Controller, to Vice President Accounting in 1992, and to Senior Vice President and Chief Accounting Officer in 1999. In May 2004 Mr. Simon took over the role of Senior Vice President and Treasurer. During his tenure at Prentiss, Mr. Simon was responsible for the design and implementation of new accounting systems; project leader for the implementation of Sarbanes Oxley; negotiation of construction financing, property level financing, corporate financings and interest rate hedge transactions. He was integrally involved in the merger of Prentiss with Brandywine Realty Trust, including the transfer, pay-off, or defeasance of the Prentiss debt portfolio. Mr. Simon began his career at Fox & Company, now Grant Thornton, as a tax accountant.

Available Information

We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports on the day of filing with the SEC on our website at www.udrt.com, or by sending an e-mail message to ir@udrt.com.

NYSE Certification

On May 19, 2006, our Chief Executive Officer submitted to the New York Stock Exchange the annual certification required by Section 303A.12(a) of the NYSE Listed Company Manual regarding our compliance with NYSE corporate governance listing standards. In addition, the certifications of our Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2, respectively, to this Report.

Item 1A.   RISK FACTORS

There are many factors that affect our business and our results of operations, some of which are beyond our control. The following is a description of important factors that may cause our actual results of operations in future periods to differ materially from those currently expected or discussed in forward-looking statements set forth in this Report relating to our financial results, operations and business prospects. Except as required

11

by law, we undertake no obligation to update any such forward-looking statements to reflect events or circumstances after the date on which it is made.

Unfavorable Changes in Apartment Market and Economic Conditions Could Adversely Affect Occupancy Levels and Rental Rates.  Market and economic conditions in the metropolitan areas in which we operate may significantly affect our occupancy levels and rental rates and, therefore, our profitability. Factors that may adversely affect these conditions include the following:

•  a reduction in jobs and other local economic downturns,

•  declines in mortgage interest rates, making alternative housing more affordable,

•  government or builder incentives which enable first time homebuyers to put little or no money down, making alternative housing decisions easier to make,

•  oversupply of, or reduced demand for, apartment homes,

•  declines in household formation, and

•  rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs.

The strength of the United States economy has become increasingly susceptible to global events and threats of terrorism. At the same time, productivity enhancements and the increased exportation of labor have resulted in limited job growth despite an improving economy. Continued weakness in job creation, or any worsening of current economic conditions, generally and in our principal market areas, could have a material adverse effect on our occupancy levels, our rental rates and our ability to strategically acquire and dispose of apartment communities. This may impair our ability to satisfy our financial obligations and pay distributions to our stockholders.

New Acquisitions, Developments and Condominium Projects May Not Achieve Anticipated Results.  We intend to continue to selectively acquire apartment communities that meet our investment criteria and to develop apartment communities for rental operations, to convert properties into condominiums and to develop condominium projects. Our acquisition, development and condominium activities and their success are subject to the following risks:

•  an acquired apartment community may fail to perform as we expected in analyzing our investment, or a significant exposure related to the acquired property may go undetected during our due diligence procedures,

•  when we acquire an apartment community, we often invest additional amounts in it with the intention of increasing profitability. These additional investments may not produce the anticipated improvements in profitability,

•  new developments may not achieve pro forma rents or occupancy levels, or problems with construction or local building codes may delay initial occupancy dates for all or a portion of a development community, and

•  an over supply of condominiums in a given market may cause a decrease in the prices at which we expect to sell condominium properties.

Possible Difficulty of Selling Apartment Communities Could Limit Operational and Financial Flexibility.  We periodically dispose of apartment communities that no longer meet our strategic objectives. Market conditions could change and purchasers may not be willing to pay prices acceptable to us. A weak market may limit our ability to change our portfolio promptly in response to changing economic conditions. Furthermore, a significant portion of the proceeds from our overall property sales may be held by intermediaries in order for some sales to qualify as like-kind exchanges under Section 1031 of the Code, so that any related capital gain can be deferred for federal income tax purposes. As a result, we may not have immediate access to all of the cash flow generated from our property sales. In addition, federal tax laws limit our ability to profit on the sale

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of communities that we have owned for fewer than four years, and this limitation may prevent us from selling communities when market conditions are favorable.

Increased Competition Could Limit Our Ability to Lease Apartment Homes or Increase or Maintain Rents.  Our apartment communities compete with numerous housing alternatives in attracting residents, including other apartment communities and single-family rental homes, as well as owner occupied single- and multi-family homes. Competitive housing in a particular area could adversely affect our ability to lease apartment homes and increase or maintain rents.

Insufficient Cash Flow Could Affect Our Debt Financing and Create Refinancing Risk.  We are subject to the risks normally associated with debt financing, including the risk that our operating income and cash flow will be insufficient to make required payments of principal and interest, or could restrict our borrowing capacity under our line of credit due to debt covenant restraints. Sufficient cash flow may not be available to make all required principal payments and still satisfy our distribution requirements to maintain our status as a REIT for federal income tax purposes, and the full limits of our line of credit may not be available to us if our operating performance falls outside the constraints of our debt covenants. Additionally, we are likely to need to refinance substantially all of our outstanding debt as it matures. We may not be able to refinance existing debt, or the terms of any refinancing may not be as favorable as the terms of the existing debt, which could create pressures to sell assets or to issue additional equity when we would otherwise not choose to do so.

Failure to Generate Sufficient Revenue Could Impair Debt Service Payments and Distributions to Stockholders.  If our apartment communities do not generate sufficient net rental income to meet rental expenses, our ability to make required payments of interest and principal on our debt securities and to pay distributions to our stockholders will be adversely affected. The following factors, among others, may affect the net rental income generated by our apartment communities:

•  the national and local economies,

•  local real estate market conditions, such as an oversupply of apartment homes,

•  tenants’ perceptions of the safety, convenience, and attractiveness of our communities and the neighborhoods where they are located,

•  our ability to provide adequate management, maintenance and insurance, and

•  rental expenses, including real estate taxes and utilities.

Expenses associated with our investment in a community, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in rental income from that community. If a community is mortgaged to secure payment of debt and we are unable to make the mortgage payments, we could sustain a loss as a result of foreclosure on the community or the exercise of other remedies by the mortgage holder.

Debt Level May Be Increased.  Our current debt policy does not contain any limitations on the level of debt that we may incur, although our ability to incur debt is limited by covenants in our bank and other credit agreements. We manage our debt to be in compliance with these debt covenants, but subject to compliance with these covenants, we may increase the amount of our debt at any time without a concurrent improvement in our ability to service the additional debt.

Financing May Not Be Available and Could Be Dilutive.  Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity. Debt or equity financing may not be available in sufficient amounts, on favorable terms or at all. If we issue additional equity securities to finance developments and acquisitions instead of incurring debt, the interests of our existing stockholders could be diluted.

Development and Construction Risks Could Impact Our Profitability.  We intend to continue to develop and construct apartment communities. Development activities may be conducted through wholly owned

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affiliated companies or through joint ventures with unaffiliated parties. Our development and construction activities may be exposed to the following risks:

•  we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased development costs and could require us to abandon our activities entirely with respect to a project for which we are unable to obtain permits or authorizations,

•  if we are unable to find joint venture partners to help fund the development of a community or otherwise obtain acceptable financing for the developments, our development capacity may be limited,

•  we may abandon development opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring such opportunities,

•  we may be unable to complete construction and lease-up of a community on schedule, or incur development or construction costs that exceed our original estimates, and we may be unable to charge rents that would compensate for any increase in such costs,

•  occupancy rates and rents at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our profitability goals for that community, and

•  when we sell homes or properties that we developed or renovated to third parties, we may be subject to warranty or construction defect claims that are uninsured or exceed the limits of our insurance.

Construction costs have been increasing in our existing markets, and the costs of upgrading acquired communities have, in some cases, exceeded our original estimates. We may experience similar cost increases in the future. Our inability to charge rents that will be sufficient to offset the effects of any increases in these costs may impair our profitability.

Some Potential Losses Are Not Covered by Insurance.  We maintain insurance policies covering our property and operating activities which are of the type and in amounts we believe are reasonable and appropriate to cover our business. There are, however, certain types of extraordinary losses for which we may not have insurance, including certain extraordinary losses resulting from environmental damage or successive natural disasters or other catastrophes. Accordingly, we may sustain uninsured losses due to insurance deductibles, self-insured retention, uninsured claims or casualties, or losses in excess of applicable coverage.

We may not be able to renew insurance coverage in an adequate amount or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and mold, or, if offered, these types of insurance may be prohibitively expensive. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. Material losses in excess of insurance proceeds may occur in the future. If one or more of our significant properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Such events could adversely affect our cash flow and ability to make distributions to stockholders.

Failure to Succeed in New Markets May Limit Our Growth.  We may make acquisitions outside of our existing market areas if appropriate opportunities arise. We may be exposed to a variety of risks if we choose to enter new markets, and we may not be able to operate successfully in new markets. These risks include, among others:

•  inability to accurately evaluate local apartment market conditions and local economies,

•  inability to obtain land for development or to identify appropriate acquisition opportunities,

•  inability to hire and retain key personnel, and

•  lack of familiarity with local governmental and permitting procedures.

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Changing Interest Rates Could Increase Interest Costs and Adversely Affect Our Cash Flow and the Market Price of Our Securities.  We currently have, and expect to incur in the future, interest-bearing debt at rates that vary with market interest rates. As of December 31, 2006, we had approximately $492.5 million of variable rate indebtedness outstanding, which constitutes approximately 15% of our total outstanding indebtedness as of such date. An increase in interest rates would increase our interest expenses to the extent our variable rate debt is not hedged effectively, and it would increase the costs of refinancing existing indebtedness and of issuing new debt. Accordingly, higher interest rates could adversely affect cash flow and our ability to service our debt and to make distributions to security holders. In addition, an increase in market interest rates may lead our security holders to demand a higher annual yield, which could adversely affect the market price of our common and preferred stock and debt securities.

Risk of Inflation/Deflation.  Substantial inflationary or deflationary pressures could have a negative effect on rental rates and property operating expenses.

Limited Investment Opportunities Could Adversely Affect Our Growth.  We expect that other real estate investors will compete with us to acquire existing properties and to develop new properties. These competitors include insurance companies, pension and investment funds, developer partnerships, investment companies and other apartment REITs. This competition could increase prices for properties of the type that we would likely pursue, and our competitors may have greater resources than we do. As a result, we may not be able to make attractive investments on favorable terms, which could adversely affect our growth.

Failure to Integrate Acquired Communities and New Personnel Could Create Inefficiencies.  To grow successfully, we must be able to apply our experience in managing our existing portfolio of apartment communities to a larger number of properties. In addition, we must be able to integrate new management and operations personnel as our organization grows in size and complexity. Failures in either area will result in inefficiencies that could adversely affect our expected return on our investments and our overall profitability.

Interest Rate Hedging Contracts May Be Ineffective and May Result in Material Charges.  From time to time when we anticipate issuing debt securities, we may seek to limit our exposure to fluctuations in interest rates during the period prior to the pricing of the securities by entering into interest rate hedging contracts. We may do this to increase the predictability of our financing costs. Also, from time to time we may rely on interest rate hedging contracts to limit our exposure under variable rate debt to unfavorable changes in market interest rates. If the terms of new debt securities are not within the parameters of, or market interest rates fall below that which we incur under a particular interest rate hedging contract, the contract is ineffective. Furthermore, the settlement of interest rate hedging contracts has involved and may in the future involve material charges.

Potential Liability for Environmental Contamination Could Result in Substantial Costs.  Under various federal, state and local environmental laws, as a current or former owner or operator of real estate, we could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous or toxic substances, often regardless of our knowledge of or responsibility for the contamination and solely by virtue of our current or former ownership or operation of the real estate. In addition, we could be held liable to a governmental authority or to third parties for property damage and for investigation and clean-up costs incurred in connection with the contamination. These costs could be substantial, and in many cases environmental laws create liens in favor of governmental authorities to secure their payment. The presence of such substances or a failure to properly remediate any resulting contamination could materially and adversely affect our ability to borrow against, sell or rent an affected property.

We Would Incur Adverse Tax Consequences if We Fail to Qualify as a REIT.   We have elected to be taxed as a REIT under the Code. Our qualification as a REIT requires us to satisfy numerous requirements, some on an annual and quarterly basis, established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. We intend that our current organization and method of operation enable us to continue to qualify as a REIT, but we may not so qualify or we may not be able to remain so qualified in the future. In addition, U.S. federal income tax laws governing REITs and other corporations and the administrative interpretations of those laws may be amended at any

15

time, potentially with retroactive effect. Future legislation, new regulations, administrative interpretations or court decisions could adversely affect our ability to qualify as a REIT or adversely affect our stockholders.

If we fail to qualify as a REIT in any taxable year, and applicable relief provisions under the Code were not available, we would be subject to U.S. federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates, and would not be allowed to deduct dividends paid to our stockholders in computing our taxable income. Also, unless the Internal Revenue Service, or “IRS,” granted us relief under certain statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year in which we first failed to qualify. The additional tax liability from the failure to qualify as a REIT would reduce or eliminate the amount of cash available for investment or distribution to our stockholders. This would likely have a significant adverse effect on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to our stockholders. Even if we continue to qualify as a REIT, we will continue to be subject to certain federal, state and local taxes on our income and property.

We May Conduct a Portion of Our Business Through Taxable REIT Subsidiaries, Which are Subject to Certain Tax Risks.  We have established taxable REIT subsidiaries in which we conduct a portion of our business. Despite our qualification as a REIT, our taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify as a REIT for U.S. federal income tax purposes, and our income from and investments in our taxable REIT subsidiaries generally do not constitute permissible income and investments for these tests. While we will attempt to ensure that our dealings with our taxable REIT subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result. Furthermore, we may be subject to a 100% penalty tax, we may jeopardize our ability to retain future gains on real property sales, or our taxable REIT subsidiaries may be denied deductions, to the extent our dealings with our taxable REIT subsidiaries are not deemed to be arm’s length in nature or are otherwise not respected.

Certain Property Transfers May Generate Prohibited Transaction Income, Resulting in a Penalty Tax on Gain Attributable to the Transaction.  From time to time, we may transfer or otherwise dispose of some of our properties. Under the Code, any gain resulting from transfers of properties that we hold as inventory or primarily for sale to customers in the ordinary course of business would be treated as income from a prohibited transaction subject to a 100% penalty tax. Since we acquire properties for investment purposes, we do not believe that our occasional transfers or disposals of property are prohibited transactions. However, whether property is held for investment purposes is a question of fact that depends on all the facts and circumstances surrounding the particular transaction. The IRS may contend that certain transfers or disposals of properties by us are prohibited transactions. If the IRS were to argue successfully that a transfer or disposition of property constituted a prohibited transaction, then we would be required to pay a 100% penalty tax on any gain allocable to us from the prohibited transaction and we may jeopardize our ability to retain future gains on real property sales. In addition, income from a prohibited transaction might adversely affect our ability to satisfy the income tests for qualification as a REIT for U.S. federal income tax purposes.

Changes in Market Conditions and Volatility of Stock Prices Could Adversely Affect the Market Price of Our Common Stock.  The stock markets, including the New York Stock Exchange, on which we list our common shares, have experienced significant price and volume fluctuations. As a result, the market price of our common stock could be similarly volatile, and investors in our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects.

Property Ownership Through Joint Ventures May Limit Our Ability to Act Exclusively in Our Interest.  We have in the past and expect in the future to develop and acquire properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures. As a result, we could become engaged in a dispute with one or more of our joint venture partners that might affect our ability to operate a jointly-owned property. Moreover, joint venture partners may have business, economic or other objectives that are inconsistent with our objectives, including objectives that relate to the appropriate timing and terms of any sale or refinancing of a property. In some instances, joint venture partners may have competing interests in our markets that could create conflicts of interest.

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Real Estate Tax and Other Laws.  Generally we do not directly pass through costs resulting from compliance with or changes in real estate tax laws to residential property tenants. We also do not generally pass through increases in income, service or other taxes, to tenants under leases. These costs may adversely affect funds from operations and the ability to make distributions to stockholders. Similarly, compliance with or changes in (i) laws increasing the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions or (ii) rent control or rent stabilization laws or other laws regulating housing, such as the Americans with Disabilities Act of 1990 and the Fair Housing Amendments Act of 1988, may result in significant unanticipated expenditures, which would adversely affect funds from operations and the ability to make distributions to stockholders.

Any Weaknesses Identified in Our Internal Control Over Financial Reporting Could Have an Adverse Effect on Our Stock Price.  Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal report over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on our stock price.

Maryland Law May Limit the Ability of a Third Party to Acquire Control of Us, Which May Not be in Our Stockholders’ Best Interests.  Maryland business statutes may limit the ability of a third party to acquire control of us. As a Maryland corporation, we are subject to various Maryland laws which may have the effect of discouraging offers to acquire our company and of increasing the difficulty of consummating any such offers, even if our acquisition would be in our stockholders’ best interests. The Maryland General Corporation Law restricts mergers and other business combination transactions between us and any person who acquires beneficial ownership of shares of our stock representing 10% or more of the voting power without our board of directors’ prior approval. Any such business combination transaction could not be completed until five years after the person acquired such voting power, and generally only with the approval of stockholders representing 80% of all votes entitled to be cast and 662/3% of the votes entitled to be cast, excluding the interested stockholder, or upon payment of a fair price. Maryland law also provides generally that a person who acquires shares of our equity stock that represents 10% (and certain higher levels) of the voting power in electing directors will have no voting rights unless approved by a vote of two-thirds of the shares eligible to vote.

Limitations on Share Ownership and Limitations on the Ability of Our Stockholders to Effect a Change in Control of Our Company May Prevent Takeovers That are Beneficial to Our Stockholders.  One of the requirements for maintenance of our qualification as a REIT for U.S. federal income tax purposes is that no more than 50% in value of our outstanding capital stock may be owned by five or fewer individuals, including entities specified in the Code, during the last half of any taxable year. Our charter contains ownership and transfer restrictions relating to our stock primarily to assist us in complying with this and other REIT ownership requirements; however, the restrictions may have the effect of preventing a change of control, which does not threaten REIT status. These restrictions include a provision that generally limits ownership by any person of more than 9.9% of the value of our outstanding equity stock, unless our board of directors exempts the person from such ownership limitation, provided that any such exemption shall not allow the person to exceed 13% of the value of our outstanding equity stock. These provisions may have the effect of delaying, deferring or preventing someone from taking control of us, even though a change of control might involve a premium price for our stockholders or might otherwise be in our stockholders’ best interests.

Under the terms of our shareholder rights plan, our board of directors can, in effect, prevent a person or group from acquiring more than 15% of the outstanding shares of our common stock. Unless our board of directors approves the person’s purchase, after that person acquires more than 15% of our outstanding common stock, all other stockholders will have the right to purchase securities from us at a price that is less than their then fair market value. Purchases by other stockholders would substantially reduce the value and influence of the shares of our common stock owned by the acquiring person. Our board of directors, however, can prevent the shareholder rights plan from operating in this manner. This gives our board of directors significant discretion to approve or disapprove a person’s efforts to acquire a large interest in us. Additional information regarding our shareholder rights plan is set forth in Note 6 in the Notes to Consolidated Financial Statement included elsewhere in this Report.

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Item 1B.   UNRESOLVED STAFF COMMENTS

None.

Item 2.   PROPERTIES

At December 31, 2006, our apartment portfolio included 242 communities located in 33 markets, with a total of 70,339 completed apartment homes. In addition, we had five apartment communities under development. We own approximately 53,000 square feet of office space in Richmond, Virginia, for our corporate offices and we lease approximately 11,000 square feet of office space in Highlands Ranch, Colorado, for our principal executive offices. The table below sets forth a summary of our real estate portfolio by geographic market at December 31, 2006.

SUMMARY OF REAL ESTATE PORTFOLIO BY GEOGRAPHIC MARKET AT DECEMBER 31, 2006

																	Total
																	Income		Average
	Number of		Number of		Percentage of			Carrying									per		Home Size
	Apartment		Apartment		Carrying			Value		Encumbrances		Cost per		Physical			Occupied		(Square
	Communities		Homes		Value			(In thousands)		(In thousands)		Home		Occupancy			Home(a)		Feet)
WESTERN REGION
Orange Co., CA		13		4,067		11.8	%	$	684,460	$	114,255	$	168,296		94.9	%	$	1,435		821
San Francisco, CA		10		2,425		7.7	%		445,360		19,645		183,654		96.8	%		1,543		786
Los Angeles, CA		6		1,210		3.4	%		197,287		90,722		163,047		94.0	%		1,412		937
San Diego, CA		5		1,123		2.8	%		162,878		39,176		145,038		94.1	%		1,241		797
Inland Empire, CA		4		1,282		2.7	%		156,495		13,394		122,071		91.4	%		1,033		830
Monterey Peninsula, CA		7		1,568		2.5	%		144,133		—		91,922		89.8	%		955		724
Seattle, WA		7		1,466		2.2	%		130,875		58,621		89,274		96.4	%		921		886
Portland, OR		5		1,365		1.5	%		86,644		20,576		63,475		94.5	%		745		887
Sacramento, CA		2		914		1.1	%		64,563		45,837		70,638		92.7	%		869		820
MID-ATLANTIC REGION
Metropolitan DC		8		2,469		4.3	%		249,270		30,691		100,960		95.9	%		1,208		922
Raleigh, NC		11		3,663		3.9	%		229,947		68,059		62,776		92.8	%		695		957
Baltimore, MD		10		2,118		3.0	%		176,424		13,286		83,297		95.9	%		1,054		925
Richmond, VA		9		2,636		3.0	%		174,696		61,532		66,273		95.5	%		864		954
Wilmington, NC		6		1,868		1.8	%		103,893		—		55,617		95.2	%		755		952
Charlotte, NC		6		1,226		1.5	%		88,685		—		72,337		94.3	%		739		990
Norfolk, VA		6		1,438		1.3	%		74,475		9,118		51,791		95.4	%		913		1,016
Other Mid-Atlantic		13		2,817		2.5	%		145,972		36,232		51,818		95.0	%		861		922
SOUTHEASTERN REGION
Tampa, FL		12		4,138		4.7	%		273,531		63,253		66,102		94.1	%		929		977
Orlando, FL		12		3,476		3.8	%		219,802		47,871		63,234		93.1	%		900		955
Nashville, TN		10		2,966		3.2	%		187,754		71,585		63,302		95.1	%		747		918
Jacksonville, FL		4		1,557		1.9	%		110,344		17,043		70,870		94.0	%		845		913
Atlanta, GA		6		1,426		1.5	%		84,779		23,884		59,452		95.4	%		701		908
Other Florida		8		2,400		2.8	%		164,164		52,588		68,402		91.6	%		918		917
Other Southeastern		7		1,752		1.4	%		79,467		—		45,358		95.2	%		644		819
SOUTHWESTERN REGION
Houston, TX		16		5,447		4.6	%		265,438		40,693		48,731		94.4	%		677		811
Dallas, TX		6		2,684		3.4	%		199,570		23,971		74,355		94.2	%		811		909
Arlington, TX		6		1,828		1.6	%		95,916		20,543		52,470		94.5	%		679		807
Phoenix, AZ		4		1,234		1.6	%		92,293		27,771		74,792		93.7	%		905		1,008
Austin, TX		5		1,425		1.5	%		87,073		6,073		61,104		96.4	%		726		805
Denver, CO		2		884		1.2	%		70,425		—		79,666		91.9	%		748		878
Other Southwestern		6		2,469		2.6	%		149,892		41,674		60,710		95.7	%		739		879

18

																	Total
																	Income		Average
	Number of		Number of		Percentage of			Carrying									per		Home Size
	Apartment		Apartment		Carrying			Value		Encumbrances		Cost per		Physical			Occupied		(Square
	Communities		Homes		Value			(In thousands)		(In thousands)		Home		Occupancy			Home(a)		Feet)
MIDWESTERN REGION
Columbus, OH		6		2,530		2.8	%		165,785		40,635		65,528		93.5	%		734		904
Other Midwestern		3		444		0.4	%		24,890		6,241		56,059		91.4	%		763		955
Real Estate Under Development		1		24		1.1	%		63,828		—		n/a		n/a			n/a		n/a
Land		n/a		n/a		2.5	%		144,633		67,674		n/a		n/a			n/a		n/a
Total Apartments(b)		242		70,339		99.6	%	$	5,795,641	$	1,172,643	$	82,396		94.3	%	$	899		895
Commercial Property		n/a		n/a		0.3	%		20,390		10,276		n/a		n/a			n/a		n/a
Richmond — Corporate		n/a		n/a		0.1	%		4,091		—		n/a		n/a			n/a		n/a
Total Real Estate Owned		242		70,339		100.0	%	$	5,820,122	$	1,182,919	$	82,396		94.3	%	$	899		895

(a)	Total Income per Occupied Home represents total revenues per weighted average number of homes occupied.
(b)	Includes real estate held for disposition, real estate under development, and land, but excludes commercial property.

Item 3.   LEGAL PROCEEDINGS

We are subject to various legal proceedings and claims arising in the ordinary course of business. We cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. We believe that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flow.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of our security holders during the fourth quarter of the year ended December 31, 2006.

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PART II

Item 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Common Stock

Our common stock is traded on the New York Stock Exchange under the symbol “UDR.” The following tables set forth the quarterly high and low sale prices per common share reported on the NYSE for each quarter of the last two fiscal years. Distribution information for common stock reflects distributions declared per share for each calendar quarter and paid at the end of the following month.

					Distributions
	High		Low		Declared
2006
1st Quarter	$	29.05	$	23.41	$	.3125
2nd Quarter		28.82		25.50		.3125
3rd Quarter		30.81		26.97		.3125
4th Quarter		33.75		29.95		.3125
2005
1st Quarter	$	24.75	$	20.55	$	.3000
2nd Quarter		24.15		20.57		.3000
3rd Quarter		25.97		22.70		.3000
4th Quarter		23.97		20.88		.3000

On February 20, 2007, the closing sale price of our common stock was $33.95 per share on the NYSE and there were 5,871 holders of record of the 135,544,953 outstanding shares of our common stock.

We have determined that, for federal income tax purposes, approximately 38% of the distributions for each of the four quarters of 2006 represented ordinary income, 37% represented long-term capital gain, and 25% represented unrecaptured section 1250 gain.

We pay regular quarterly distributions to holders of shares of our common stock. Future distributions will be at the discretion of our board of directors and will depend on our actual funds from operations, financial condition and capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, and other factors. The annual distribution payment for calendar year 2006 necessary for us to maintain our status as a REIT was approximately $0.43 per share of common stock. We declared total distributions of $1.25 per share of common stock for 2006.

Series E Preferred Stock

The Series E Cumulative Convertible Preferred Stock has no stated par value and a liquidation preference of $16.61 per share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time and from time to time at the holder’s option into one share of our common stock. The holders of the Series E are entitled to vote on an as-converted basis as a single class in combination with the holders of common stock at any meeting of our stockholders for the election of directors or for any other purpose on which the holders of common stock are entitled to vote. The Series E has no stated maturity and is not subject to any sinking fund or any mandatory redemption.

Distributions declared on the Series E in 2006 were $1.33 per share or $0.3322 per quarter. The Series E is not listed on any exchange. At December 31, 2006, a total of 2,803,812 shares of the Series E were outstanding.

20

Series F Preferred Stock

We are authorized to issue up to 20,000,000 shares of our Series F Preferred Stock. Our Series F Preferred Stock may be purchased by holders of our operating partnership units, or OP Units, described below under “Operating Partnership Units,” at a purchase price of $0.0001 per share. OP Unitholders are entitled to subscribe for and purchase one share of our Series F Preferred Stock for each OP Unit held. At December 31, 2006, a total of 666,293 shares of the Series F Preferred Stock were outstanding at a value of $66.63. Holders of the Series F Preferred Stock are entitled to one vote for each share of the Series F Preferred Stock they hold, voting together with the holders of our common stock, on each matter submitted to a vote of securityholders at a meeting of our stockholders. The Series F Preferred Stock does not entitle its holders to any other rights, privileges or preferences.

Dividend Reinvestment and Stock Purchase Plan

We have a Dividend Reinvestment and Stock Purchase Plan under which holders of our common stock and our Series B Cumulative Redeemable Preferred Stock may elect to automatically reinvest their distributions and make additional cash payments to acquire additional shares of our common stock. Stockholders who do not participate in the plan continue to receive dividends as declared. As of February 20, 2007, there were 3,372 participants in the plan.

Operating Partnership Units

From time to time we issue shares of our common stock in exchange for OP Units tendered to our operating partnerships, United Dominion Realty, L.P. and Heritage Communities L.P., for redemption in accordance with the provisions of their respective partnership agreements. At December 31, 2006, there were 9,692,058 OP Units (of which 1,650,322 are owned by the holders of the Series A OPPS) and 329,207 OP Units in United Dominion Realty, L.P. and Heritage Communities L.P., respectively, that were owned by limited partners. The holder of the OP Units has the right to require United Dominion Realty, L.P. to redeem all or a portion of the OP Units held by the holder in exchange for a cash payment based on the market value of our common stock at the time of redemption. However, United Dominion Realty, L.P.’s obligation to pay the cash amount is subject to the prior right of the company to acquire such OP Units in exchange for either the cash amount or shares of our common stock. Heritage Communities L.P. OP Units are convertible into common stock in lieu of cash, at our option, once the holder elects to convert, at an exchange ratio of 1.575 shares for each OP Unit. During 2006, we issued a total of 381,001 shares of common stock in exchange for OP Units.

Purchases of Equity Securities

In February 2006, our Board of Directors authorized a new 10 million share repurchase program. This program replaces our previous 11 million share repurchase program (of which 1,180,737 shares were available for repurchase) and authorizes the repurchase of our common stock in open market purchases, in block purchases, privately negotiated transactions, or otherwise. As reflected in the table below, no shares of common stock were repurchased under this program or otherwise during the quarter ended December 31, 2006.

21

The following table sets forth certain information regarding our common stock repurchases during the quarter ended December 31, 2006:

					Total Number of Shares
					Purchased as		Maximum Number of Shares
	Total Number of		Average		Part of Publicly		that May Yet Be
	Shares		Price per		Announced Plans or		Purchased Under the
Period	Purchased		Share		Programs		Plans or Programs
October 1, 2006 through October 31, 2006		0		N/A		0		10,000,000
November 1, 2006 through November 30, 2006		0		N/A		0		10,000,000
December 1, 2006 through December 31, 2006		0		N/A		0		10,000,000
Total		0		N/A		0		10,000,000

Recent Sales of Unregistered Securities

On October 12, 2006, we completed the sale of $250 million principal amount of our 3.625% convertible senior notes due 2011. These notes are convertible into shares of our common stock at an initial conversion rate of 26.6326 shares per $1,000 principal amount of notes, which equates to an initial conversion price of approximately $37.55 per share. Because the notes and the shares of common stock issuable upon conversion of the notes were sold to accredited investors in transactions not involving a public offering, the transactions are exempt from registration under the Securities Act of 1933 in accordance with Section 4(2) of the Securities Act. In connection with the offering of the notes, we also entered into a capped call transaction with respect to our common stock with JPMorgan Chase Bank, National Association, London Branch, an affiliate of one of the initial purchasers of the notes. The capped call transaction covers, subject to anti-dilution adjustments similar to those contained in the notes, approximately 6,658,150 shares of our common stock. Information regarding the offering of our 3.625% convertible senior notes due 2011, the shares of our common stock issuable upon conversion of the notes, and the capped call transaction is set forth in our Current Report on Form 8-K dated October 5, 2006 and filed with the SEC on October 12, 2006, and is incorporated herein by reference.

22

Comparison of Cumulative Total Returns

The following graph provides a comparison from December 31, 2001 through December 31, 2006 of the cumulative total stockholder return (assuming reinvestment of any dividends) among UDR, the NAREIT Equity REIT Index, Standard & Poor’s 500 Stock Index, the NAREIT Equity Apartment Index and the MSCI US REIT Index. The graph assumes that $100 was invested on December 31, 2001, in each of our common stock and the indices presented. Historical stock price performance is not necessarily indicative of future stock price performance.

Performance Graph

	December 31
	2001		2002		2003		2004		2005		2006
UDR	$	100	$	122.30	$	153.29	$	210.58	$	209.93	$	297.63
NAREIT Equity REIT Index	$	100	$	103.82	$	142.37	$	187.33	$	210.12	$	283.78
S&P 500 Index	$	100	$	77.90	$	100.24	$	111.15	$	116.61	$	135.02
NAREIT Equity Apartment Index	$	100	$	93.85	$	117.77	$	158.66	$	181.91	$	254.57
MSCI US REIT Index	$	100	$	103.51	$	141.72	$	186.70	$	208.95	$	284.00

The foregoing graph and chart shall not be deemed incorporated by reference by any general statement incorporating by reference this Report into any filing under the Securities Act or under the Exchange Act, except to the extent we specifically incorporate this information by reference.

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Item 6.   SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial and other information as of and for each of the years in the five-year period ended December 31, 2006. The table should be read in conjunction with our consolidated financial statements and the notes thereto, and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this Report.

	Years Ended December 31,
	(In thousands, except per share data and apartment homes owned)
	2006			2005			2004			2003			2002
Operating Data(a)
Rental income	$	694,473		$	621,904		$	513,463		$	450,572		$	429,726
(Loss)/income before minority interests and discontinued operations		(30,026	)		(81	)		5,928			5,039			(31,210	)
Income from discontinued operations, net of minority interests		156,012			154,437			90,176			63,318			82,151
Net income		128,605			155,166			97,152			70,404			53,229
Distributions to preferred stockholders		15,370			15,370			19,531			26,326			27,424
Net income available to common stockholders		113,235			139,796			71,892			24,807			25,805
Common distributions declared		168,408			163,690			152,203			134,876			118,888
Weighted average number of common shares outstanding — basic		133,732			136,143			128,097			114,672			106,078
Weighted average number of common shares outstanding — diluted		133,732			136,143			128,097			114,672			106,078
Weighted average number of common shares, OP Units, and common stock equivalents outstanding — diluted		147,981			150,141			145,842			136,975			127,838
Per share — basic and diluted:
Loss from continuing operations available to common stockholders, net of minority interests	$	(0.32	)	$	(0.11	)	$	(0.14	)	$	(0.33	)	$	(0.53	)
Income from discontinued operations, net of minority interests		1.17			1.14			0.70			0.55			0.77
Net income available to common stockholders		0.85			1.03			0.56			0.22			0.24
Common distributions declared		1.25			1.20			1.17			1.14			1.11
Balance Sheet Data
Real estate owned, at carrying value	$	5,820,122		$	5,512,424		$	5,243,296		$	4,351,551		$	3,967,483
Accumulated depreciation		1,253,727			1,123,829			1,007,887			896,630			748,733
Total real estate owned, net of accumulated depreciation		4,566,395			4,388,595			4,235,409			3,454,921			3,218,750
Total assets		4,675,875			4,541,593			4,332,001			3,543,643			3,276,136
Secured debt		1,182,919			1,116,259			1,197,924			1,018,028			1,015,740
Unsecured debt		2,155,866			2,043,518			1,682,058			1,114,009			1,041,900
Total debt		3,338,785			3,159,777			2,879,982			2,132,037			2,057,640
Stockholders’ equity		1,055,255			1,107,724			1,195,451			1,163,436			1,001,271
Number of common shares outstanding		135,029			134,012			136,430			127,295			106,605
Other Data
Cash Flow Data
Cash provided by operating activities	$	229,613		$	248,186		$	251,747		$	234,945		$	229,001
Cash used in investing activities		(149,973	)		(219,017	)		(595,966	)		(304,217	)		(67,363	)
Cash (used in)/provided by financing activities		(93,040	)		(21,530	)		347,299			70,944			(163,127	)
Funds from Operations(b)
Funds from operations — basic	$	244,471		$	238,254		$	211,670		$	193,750		$	153,016
Funds from operations — diluted		248,197			241,980			219,557			208,431			168,795
Apartment Homes Owned
Total apartment homes owned at December 31		70,339			74,875			78,855			76,244			74,480
Weighted average number of apartment homes owned during the year		73,731			76,069			76,873			74,550			76,567

24

(a)

Reclassified to conform to current year presentation in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” as described in Note 3 to the consolidated financial statements.

(b)

Funds from operations, or FFO, is defined as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s definition issued in April 2002. We consider FFO in evaluating property acquisitions and our operating performance and believe that FFO should be considered along with, but not as an alternative to, net income and cash flows as a measure of our activities in accordance with generally accepted accounting principles. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs. For 2005, FFO includes $2.5 million of hurricane related insurance recoveries. For 2004, FFO includes a charge of $5.5 million to cover hurricane related expenses. For the years ended December 31, 2004 and 2003, distributions to preferred stockholders exclude $5.7 million and $19.3 million, respectively, related to premiums on preferred stock conversions.

Item 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, without limitation, statements concerning property acquisitions and dispositions, development activity and capital expenditures, capital raising activities, rent growth, occupancy, and rental expense growth. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such factors include, among other things, unanticipated adverse business developments affecting us, or our properties, adverse changes in the real estate markets and general and local economies and business conditions. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

Business Overview

We are a real estate investment trust, or REIT, that owns, acquires, renovates, develops, and manages apartment communities nationwide. We were formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our subsidiaries include two operating partnerships, Heritage Communities L.P., a Delaware limited partnership, and United Dominion Realty, L.P., a Delaware limited partnership. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” “the company,” or “UDR” refer collectively to United Dominion Realty Trust, Inc. and its subsidiaries.

25

At December 31, 2006, our portfolio included 242 communities with 70,339 apartment homes nationwide. The following table summarizes our market information by major geographic markets (includes real estate held for disposition, real estate under development, and land, but excludes commercial properties):

	As of December 31, 2006								Year Ended December 31, 2006
	Number of		Number of		Percentage of		Carrying		Average			Total Income per
	Apartment		Apartment		Carrying		Value		Physical			Occupied
	Communities		Homes		Value		(In thousands)		Occupancy			Home(a)
WESTERN REGION
Orange Co., CA		13		4,067		11.8%	$	684,460		94.9	%	$	1,435
San Francisco, CA		10		2,425		7.7%		445,360		96.8	%		1,543
Los Angeles, CA		6		1,210		3.4%		197,287		94.0	%		1,412
San Diego, CA		5		1,123		2.8%		162,878		94.1	%		1,241
Inland Empire, CA		4		1,282		2.7%		156,495		91.4	%		1,033
Monterey Peninsula, CA		7		1,568		2.5%		144,133		89.8	%		955
Seattle, WA		7		1,466		2.3%		130,875		96.4	%		921
Portland, OR		5		1,365		1.5%		86,644		94.5	%		745
Sacramento, CA		2		914		1.1%		64,563		92.7	%		869
MID-ATLANTIC REGION
Metropolitan DC		8		2,469		4.3%		249,270		95.9	%		1,208
Raleigh, NC		11		3,663		4.0%		229,947		92.8	%		695
Baltimore, MD		10		2,118		3.0%		176,424		95.9	%		1,054
Richmond, VA		9		2,636		3.0%		174,696		95.5	%		864
Wilmington, NC		6		1,868		1.8%		103,893		95.2	%		755
Charlotte, NC		6		1,226		1.5%		88,685		94.3	%		739
Norfolk, VA		6		1,438		1.3%		74,475		95.4	%		913
Other Mid-Atlantic		13		2,817		2.5%		145,972		95.0	%		861
SOUTHEASTERN REGION
Tampa, FL		12		4,138		4.7%		273,531		94.1	%		929
Orlando, FL		12		3,476		3.8%		219,802		93.1	%		900
Nashville, TN		10		2,966		3.2%		187,754		95.1	%		747
Jacksonville, FL		4		1,557		1.9%		110,344		94.0	%		845
Atlanta, GA		6		1,426		1.5%		84,779		95.4	%		701
Other Florida		8		2,400		2.8%		164,164		91.6	%		918
Other Southeastern		7		1,752		1.4%		79,467		95.2	%		644
SOUTHWESTERN REGION
Houston, TX		16		5,447		4.6%		265,438		94.4	%		677
Dallas, TX		6		2,684		3.4%		199,570		94.2	%		811
Arlington, TX		6		1,828		1.7%		95,916		94.5	%		679
Phoenix, AZ		4		1,234		1.6%		92,293		93.7	%		905
Austin, TX		5		1,425		1.5%		87,073		96.4	%		726
Denver, CO		2		884		1.2%		70,425		91.9	%		748
Other Southwestern		6		2,469		2.6%		149,892		95.7	%		739
MIDWESTERN REGION
Columbus, OH		6		2,530		2.9%		165,785		93.5	%		734
Other Midwestern		3		444		0.4%		24,890		91.4	%		763
Real Estate Under Development		1		24		1.1%		63,828		—			—
Land		—		—		2.5%		144,633		—			—
Total		242		70,339		100.0%	$	5,795,641		94.3	%	$	899

(a) Total Income per Occupied Home represents total revenues per weighted average number of apartment homes occupied.

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Liquidity and Capital Resources

Liquidity is the ability to meet present and future financial obligations either through operating cash flows, the sale or maturity of existing assets, or by the acquisition of additional funds through capital management. Both the coordination of asset and liability maturities and effective capital management are important to the maintenance of liquidity. Our primary source of liquidity is our cash flow from operations as determined by rental rates, occupancy levels, and operating expenses related to our portfolio of apartment homes. We routinely use our unsecured bank credit facility to temporarily fund certain investing and financing activities prior to arranging for longer-term financing. During the past several years, proceeds from the sale of real estate have been used for both investing and financing activities.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations and borrowings under credit arrangements. We expect to meet certain long-term liquidity requirements such as scheduled debt maturities, the repayment of financing on development activities, and potential property acquisitions, through long-term secured and unsecured borrowings, the disposition of properties, and the issuance of additional debt or equity securities. We believe that our net cash provided by operations will continue to be adequate to meet both operating requirements and the payment of dividends by the company in accordance with REIT requirements in both the short- and long-term. Likewise, the budgeted expenditures for improvements and renovations of certain properties are expected to be funded from property operations.

We have a shelf registration statement filed with the Securities and Exchange Commission which provides for the issuance of an indeterminate amount of common stock, preferred stock, debt securities, warrants, purchase contracts and units to facilitate future financing activities in the public capital markets. Access to capital markets is dependent on market conditions at the time of issuance.

Future Capital Needs

Future development expenditures are expected to be funded with proceeds from the sale of property, with construction loans, through joint ventures and, to a lesser extent, with cash flows provided by operating activities. Acquisition activity in strategic markets is expected to be largely financed through the issuance of equity and debt securities, the issuance of operating partnership units, the assumption or placement of secured and/or unsecured debt and by the reinvestment of proceeds from the sale of properties.

During 2007, we have approximately $81.7 million of secured debt and $167.3 million of unsecured debt maturing and we anticipate repaying that debt with proceeds from borrowings under our secured or unsecured credit facilities, the issuance of new unsecured debt securities or equity or from disposition proceeds.

Critical Accounting Policies and Estimates

Our critical accounting policies are those having the most impact on the reporting of our financial condition and results and those requiring significant judgments and estimates. These policies include those related to (1) capital expenditures, (2) impairment of long-lived assets, and (3) real estate investment properties. With respect to these critical accounting policies, we believe that the application of judgments and assessments is consistently applied and produces financial information that fairly depicts the results of operations for all periods presented.

Capital Expenditures

In conformity with accounting principles generally accepted in the United States, we capitalize those expenditures related to acquiring new assets, materially enhancing the value of an existing asset, or substantially extending the useful life of an existing asset. Expenditures necessary to maintain an existing property in ordinary operating condition are expensed as incurred.

During 2006, $215.7 million or $2,996 per home was spent on capital expenditures for all of our communities, excluding development, condominium conversions and commercial properties. These capital improvements included turnover related expenditures for floor coverings and appliances, other recurring capital expenditures such as roofs, siding, parking lots, and other non-revenue enhancing capital expenditures, which

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aggregated $34.6 million or $480 per home. In addition, revenue enhancing capital expenditures, kitchen and bath upgrades, upgrades to HVAC equipment, and other extensive exterior/interior upgrades totaled $144.1 million or $2,002 per home, and major renovations totaled $37.0 million or $514 per home for the year ended December 31, 2006.

The following table outlines capital expenditures and repair and maintenance costs for all of our communities, excluding real estate under development, condominium conversions and commercial properties for the periods presented:

	Year Ended December 31,							Year Ended December 31,
	(dollars in thousands)							(per home)
	2006		2005		% Change			2006		2005		% Change
Turnover capital expenditures	$	14,214	$	17,916		(20.7	)%	$	197	$	237		(16.9	)%
Other recurring capital expenditures		20,409		20,928		(2.5	)%		283		276		2.5	%
Total recurring capital expenditures		34,623		38,844		(10.9	)%		480		513		(6.4	)%
Revenue enhancing improvements		144,102		98,592		46.2	%		2,002		1,302		53.8	%
Major renovations		36,996		18,686		98.0	%		514		247		108.1	%
Total capital improvements	$	215,721	$	156,122		38.2	%	$	2,996	$	2,062		45.3	%
Repair and maintenance		43,498		45,266		(3.9	)%		604		598		1.0	%
Total expenditures	$	259,219	$	201,388		28.7	%	$	3,600	$	2,660		35.3	%

Total capital improvements increased $59.6 million or $934 per home for the year ended December 31, 2006 compared to the same period in 2005. This increase was attributable to an additional $18.3 million of major renovations at certain of our properties. These renovations included the re-wiring and/or re-plumbing of an entire building as well as major structural changes and/or architectural revisions to existing buildings. The increase was also attributable to an additional $45.5 million being invested in revenue enhancing improvements. These increases were offset by a $4.2 million decrease in recurring capital expenditures. We will continue to selectively add revenue enhancing improvements which we believe will provide a return on investment substantially in excess of our cost of capital. Recurring capital expenditures during 2007 are currently expected to be approximately $610 per home.

Impairment of Long-Lived Assets

We record impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by the future operation and disposition of those assets are less than the net book value of those assets. Our cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and operating conditions and our estimated holding periods. The net book value of impaired assets is reduced to fair market value. Our estimates of fair market value represent our best estimate based upon industry trends and reference to market rates and transactions.

Real Estate Investment Properties

We purchase real estate investment properties from time to time and allocate the purchase price to various components, such as land, buildings, and intangibles related to in-place leases in accordance with FASB Statement No. 141, “Business Combinations.” The purchase price is allocated based on the relative fair value of each component. The fair value of buildings is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates. As such, the determination of fair value considers the present

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value of all cash flows expected to be generated from the property including an initial lease-up period. We determine the fair value of in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition. In addition, we consider the cost of acquiring similar leases, the foregone rents associated with the lease-up period, and the carrying costs associated with the lease-up period. The fair value of in-place leases is recorded and amortized as amortization expense over the remaining contractual lease period.

Statements of Cash Flow

The following discussion explains the changes in net cash provided by operating activities and net cash used in investing and financing activities that are presented in our Consolidated Statements of Cash Flows.

Operating Activities

For the year ended December 31, 2006, our net cash flow provided by operating activities was $229.6 million compared to $248.2 million for 2005. During 2006, the decrease in cash flow from operating activities resulted primarily from an $18.5 million increase in interest expense, a decrease of $17.1 million in other income due to a 2005 sale of a technology investment, an $11.4 million increase in operating assets and a $9.8 million decrease in operating liabilities in 2006 as compared to 2005. These decreases in cash flow from operating activities were partially offset by a $34.2 million increase in property operating results from our apartment community portfolio (see discussion under “Apartment Community Operations”), $5.1 million more in gains recognized from the sale of depreciable property and an unconsolidated joint venture in 2006 as compared to 2005, and an $8.5 million decrease in prepayment penalties from 2005.

Investing Activities

For the year ended December 31, 2006, net cash used in investing activities was $150.0 million compared to $219.0 million for 2005. Changes in the level of investing activities from period to period reflects our strategy as it relates to our acquisition, capital expenditure, development, and disposition programs, as well as the impact of the capital market environment on these activities, all of which are discussed in further detail below.

Acquisitions

For the year ended December 31, 2006, we acquired eight apartment communities with 2,763 apartment homes for an aggregate consideration of $327.5 million and two parcels of land for $19.9 million. For 2005, we acquired eight apartment communities with 2,561 apartment homes for an aggregate consideration of $390.9 million and one parcel of land for $2.9 million. Our long-term strategic plan is to achieve greater operating efficiencies by investing in fewer, more concentrated markets. As a result, we have been expanding our interests in the fast growing Southern California, Florida, and Metropolitan Washington DC markets over the past three years. During 2007, we plan to continue to channel new investments into those markets we believe will provide the best investment returns. Markets will be targeted based upon defined criteria including past performance, expected job growth, current and anticipated housing supply and demand and the ability to attract and support household formation.

Real Estate Under Development

Development activity is focused in core markets in which we have strong operations in place. For the year ended December 31, 2006, we invested approximately $101.8 million in development projects, an increase of $52.5 million from our 2005 level of $49.3 million.

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The following wholly owned projects were under development as of December 31, 2006:

	Number of		Completed		Cost to		Budgeted		Estimated		Expected
	Apartment		Apartment		Date		Cost		Cost		Completion
	Homes		Homes		(In thousands)		(In thousands)		per Home		Date
2000 Post — Phase III
San Francisco, CA		24		24	$	10,254	$	11,000	$	458,300		1Q07
Villas at Ridgeview Townhomes
Plano, TX		48		—		7,022		10,000		208,300		3Q07
Ridgeview Apartments
Plano, TX		202		—		8,296		18,000		89,100		3Q07
Northwest Houston — Phase I
Houston, TX		320		—		4,421		22,000		68,800		2Q08
Lincoln Towne Square — Phase II
Plano, TX		302		—		4,384		26,000		86,100		3Q08
		896		24	$	34,377	$	87,000	$	97,100

In addition, we owned five parcels of land held for future development aggregating $35.4 million at December 31, 2006.

Development Joint Ventures

In June 2006, we completed the formation of a development joint venture that will invest approximately $138 million to develop one apartment community with 298 apartment homes in Marina del Rey, California. UDR is the financial partner and is responsible for funding the costs of development and receives a preferred return from 7% to 8.5% before our partner receives a 50% participation. Our initial investment was $27.5 million.

In July 2006, we closed on a joint venture to develop a site in Bellevue, Washington. At closing, we owned 49% of the $135 million project that involves building a 400 home high rise apartment building with ground floor retail. Our initial investment was $5.7 million.

In November 2006, we closed on a joint venture to develop a site close to Bellevue Plaza in the central business district of Bellevue, Washington. This project will include the development of 271 apartment homes. Construction began in the fourth quarter of 2006 and is scheduled for completion in 2008. At closing, we owned 49% of the $97 million project. Our initial investment was $10.0 million.

Under FASB Interpretation No. 46, “Consolidation of Variable Interest Entities,” these ventures have been consolidated into UDR’s financial statements. Our joint venture partners are the managing partners as well as the developers, general contractors, and property managers.

The following consolidated joint venture projects were under development as of December 31, 2006:

	Number of		Completed		Cost to		Budgeted		Estimated		Expected
	Apartment		Apartment		Date		Cost		Cost		Completion
	Homes		Homes		(In thousands)		(In thousands)		per Home		Date
Jefferson at Marina del Rey
Marina del Rey, CA		298		—	$	76,601	$	138,000	$	463,100		2Q08
Ashwood Commons
Bellevue, WA		271		—		23,660		97,000		357,900		4Q08
Bellevue Plaza
Bellevue, WA		400		—		34,220		135,000		270,000		4Q09
		969		—	$	134,481	$	370,000	$	381,800

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Disposition of Investments

For the year ended December 31, 2006, UDR sold 24 communities with 7,653 apartment homes for a gross consideration of $444.9 million. In addition, we sold 384 condominiums from four communities with a total of 612 condominiums for a gross consideration of $72.1 million. We recognized after-tax gains for financial reporting purposes of $148.6 million on these sales. Proceeds from the sales were used primarily to reduce debt.

For the year ended December 31, 2005, UDR sold 22 communities with 6,352 apartment homes and 240 condominiums from five communities with a total of 648 condominiums for a gross consideration of $456.3 million. In addition, we sold our investment in an unconsolidated joint venture for $39.2 million and one parcel of land for $0.9 million. We recognized gains for financial reporting purposes of $143.5 million on these sales. Proceeds from the sales were used primarily to reduce debt and acquire additional communities. In conjunction with the sale of ten communities in July 2005, we received short-term notes for $124.7 million that bear interest at 6.75% and had maturities ranging from September 2005 to July 2006. As of December 31, 2006, all of the notes receivable had matured and had been repaid. We recognized previously deferred gains for financial reporting purposes of $6.4 million for the year ended December 31, 2006.

During 2007, we plan to continue to pursue our strategy of exiting markets where long-term growth prospects are limited and redeploying capital into those markets we believe will provide the best investment returns. We intend to use the proceeds from 2007 dispositions to reduce debt, acquire communities, and fund development activity.

Financing Activities

Net cash used in financing activities during 2006 was $93.0 million compared to $21.5 million in 2005. As part of the plan to improve our balance sheet, we utilized proceeds from dispositions, equity and debt offerings, and refinancings to extend maturities, pay down existing debt, and purchase new properties.

The following is a summary of our financing activities for the year ended December 31, 2006:

•  Repaid $70.3 million of secured debt and $138.8 million of unsecured debt.

•  Authorized a new 10 million share repurchase program in February 2006. This program replaces our previous 11 million share repurchase program under which we repurchased approximately 10 million shares.

•  Sold $125 million aggregate principal amount of 6.05% senior unsecured notes due June 2013 in June 2006 under our medium-term note program. The net proceeds of approximately $124 million were used for debt repayment.

•  Sold $250 million aggregate principal amount of 3.625% convertible senior unsecured notes due 2011 in October 2006. The net proceeds of approximately $245 million were used for the repayment of indebtedness under our revolving credit facility, the cost of a capped call transaction, and for other general corporate purposes. The capped call instrument effectively increased the conversion premium to 40%.

Credit Facilities

We have four secured revolving credit facilities with Fannie Mae with an aggregate commitment of $860 million. As of December 31, 2006, $691.8 million was outstanding under the Fannie Mae credit facilities leaving $168.2 million of unused capacity. The Fannie Mae credit facilities are for an initial term of ten years, bear interest at floating and fixed rates, and can be extended for an additional five years at our discretion. We have $399.4 million of the funded balance fixed at a weighted average interest rate of 6.1% and the remaining balance on these facilities is currently at a weighted average variable rate of 5.9%.

We have a $500 million unsecured revolving credit facility that matures in May 2008 and, at our option, can be extended an additional year. We have the right to increase the credit facility to $750 million under

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certain circumstances. Based on our current credit ratings, the credit facility bears interest at a rate equal to LIBOR plus 57.5 basis points. Under a competitive bid feature, and for so long as we maintain an Investment Grade Rating, we have the right to bid out 100% of the commitment amount. As of December 31, 2006, $87.2 million was outstanding under the credit facility leaving $412.8 million of unused capacity.

The Fannie Mae credit facility and the bank revolving credit facility are subject to customary financial covenants and limitations.

Interest Rate Risk

We are exposed to interest rate risk associated with variable rate notes payable and maturing debt that has to be refinanced. We do not hold financial instruments for trading or other speculative purposes, but rather issue these financial instruments to finance our portfolio of real estate assets. Interest rate sensitivity is the relationship between changes in market interest rates and the fair value of market rate sensitive assets and liabilities. Our earnings are affected as changes in short-term interest rates impact our cost of variable rate debt and maturing fixed rate debt. A large portion of our market risk is exposure to short-term interest rates from variable rate borrowings outstanding under our Fannie Mae credit facility and our bank revolving credit facility, which totaled $292.5 million and $87.2 million, respectively, at December 31, 2006. The impact on our financial statements of refinancing fixed rate debt that matured during 2006 was immaterial.

If market interest rates for variable rate debt average 100 basis points more in 2007 than they did during 2006, our interest expense would increase, and income before taxes would decrease by $4.9 million. Comparatively, if market interest rates for variable rate debt had averaged 100 basis points more in 2006 than in 2005, our interest expense would have increased, and net income would have decreased by $6.0 million. If market rates for fixed rate debt were 100 basis points higher at December 31, 2006, the fair value of fixed rate debt would have decreased from $2.7 billion to $2.6 billion. If market interest rates for fixed rate debt were 100 basis points lower at December 31, 2006, the fair value of fixed rate debt would have increased from $2.7 billion to $2.9 billion.

These amounts are determined by considering the impact of hypothetical interest rates on our borrowing cost. These analyses do not consider the effects of the adjusted level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management would likely take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no change in our financial structure.

Funds from Operations

Funds from operations, or FFO, is defined as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of depreciable property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. We compute FFO for all periods presented in accordance with the recommendations set forth by the National Association of Real Estate Investment Trust’s (“NAREIT”) April 1, 2002 White Paper. We consider FFO in evaluating property acquisitions and our operating performance, and believe that FFO should be considered along with, but not as an alternative to, net income and cash flow as a measure of our activities in accordance with generally accepted accounting principles. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs.

Historical cost accounting for real estate assets in accordance with generally accepted accounting principles implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance and defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States), excluding gains (or losses) from sales of depreciable property, plus

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depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The use of FFO, combined with the required presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. We generally consider FFO to be a useful measure for reviewing our comparative operating and financial performance (although FFO should be reviewed in conjunction with net income which remains the primary measure of performance) because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO can help one compare the operating performance of a company’s real estate between periods or as compared to different companies. We believe that FFO is the best measure of economic profitability for real estate investment trusts.

The following table outlines our FFO calculation and reconciliation to generally accepted accounting principles for the three years ended December 31, 2006 (dollars in thousands):

	2006			2005			2004
Net income	$	128,605		$	155,166		$	97,152
Adjustments:
Distributions to preferred stockholders		(15,370	)		(15,370	)		(19,531	)
Real estate depreciation and amortization		236,523			193,517			147,133
Minority interests of unitholders in operating partnership		(2,722	)		(918	)		(1,230	)
Real estate depreciation related to unconsolidated entities		—			311			279
Discontinued Operations:
Real estate depreciation		7,366			18,907			33,495
Minority interests of unitholders in operating partnership		10,082			9,648			6,073
Net gain on the sale of land and depreciable property		(148,614	)		(139,724	)		(52,903	)
Net incremental gains on the sale of condominium homes and assets developed for sale		28,601			16,717			1,202
Funds from operations — basic	$	244,471		$	238,254		$	211,670
Distributions to preferred stockholders — Series D and E (Convertible)		3,726			3,726			7,887
Funds from operations — diluted	$	248,197		$	241,980		$	219,557
Weighted average number of common shares and OP Units outstanding — basic		142,426			144,689			136,852
Weighted average number of common shares, OP Units, and common stock equivalents outstanding — diluted		147,981			150,141			145,842

In the computation of diluted FFO, OP Units, out-performance partnership shares, and the shares of Series D Cumulative Convertible Redeemable Preferred Stock and Series E Cumulative Convertible Preferred Stock are dilutive; therefore, they are included in the diluted share count. For the year ended December 31, 2004, distributions to preferred stockholders exclude $5.7 million related to premiums on preferred stock conversions.

Net incremental gains on the sale of condominium homes and the net incremental gain on the disposition of real estate investments developed for sale are defined as net sales proceeds less a tax provision and the gross investment basis of the asset before accumulated depreciation. We consider FFO with gains/losses on the sale of condominium homes and gains/losses on the disposition of real estate investments developed for sale to be a meaningful supplemental measure of performance because the short-term use of funds produce a profit that differs from the traditional long-term investment in real estate for REITs.

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The following table is our reconciliation of FFO share information to weighted average common shares outstanding, basic and diluted, reflected on the Consolidated Statements of Operations for the three years ended December 31, 2006 (shares in thousands):

	2006			2005			2004
Weighted average number of common shares and OP units outstanding — basic		142,426			144,689			136,852
Weighted average number of OP units outstanding		(8,694	)		(8,546	)		(8,755	)
Weighted average number of common shares outstanding — basic per the Consolidated Statements of Operations		133,732			136,143			128,097
Weighted average number of common shares, OP units, and common stock equivalents outstanding — diluted		147,981			150,141			145,842
Weighted average number of OP units outstanding		(8,694	)		(8,546	)		(8,755	)
Weighted average number of incremental shares from assumed conversion of stock options		(966	)		(870	)		(897	)
Weighted average number of incremental shares from assumed conversion of $250 million convertible debt		(68	)		—			—
Weighted average number of Series A OPPSs outstanding		(1,717	)		(1,778	)		(1,791	)
Weighted average number of Series D preferred stock outstanding		—			—			(2,892	)
Weighted average number of Series E preferred stock outstanding		(2,804	)		(2,804	)		(3,410	)
Weighted average number of common shares outstanding — diluted per the Consolidated Statements of Operations		133,732			136,143			128,097

FFO also does not represent cash generated from operating activities in accordance with generally accepted accounting principles, and therefore should not be considered an alternative to net cash flows from operating activities, as determined by generally accepted accounting principles, as a measure of liquidity. Additionally, it is not necessarily indicative of cash availability to fund cash needs. A presentation of cash flow metrics based on generally accepted accounting principles is as follows (dollars in thousands):

	2006			2005			2004
Net cash provided by operating activities	$	229,613		$	248,186		$	251,747
Net cash used in investing activities		(149,973	)		(219,017	)		(595,966	)
Net cash (used in)/provided by financing activities		(93,040	)		(21,530	)		347,299

Results of Operations

The following discussion includes the results of both continuing and discontinued operations for the periods presented.

Net Income Available to Common Stockholders

2006-vs.-2005

Net income available to common stockholders was $113.2 million ($0.85 per diluted share) for the year ended December 31, 2006, compared to $139.8 million ($1.03 per diluted share) for the year ended December 31, 2005, representing a decrease of $26.6 million ($0.18 per diluted share). The decrease for the year ended December 31, 2006, when compared to the same period in 2005, resulted primarily from the following items, all of which are discussed in further detail elsewhere within this Report:

•  $31.7 million more in depreciation and amortization expense in 2006,

•  $18.5 million more in interest expense in 2006,

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•  $17.1 million less in non-property income in 2006, and

•  $6.4 million more in general and administrative expense in 2006.

These decreases in net income were partially offset by $5.1 million more in gains recognized from the sale of depreciable property and an unconsolidated joint venture, an $8.5 million decrease in losses on early debt retirement, and a $34.2 million increase in apartment community operating results in 2006 when compared to 2005.

2005-vs.-2004

Net income available to common stockholders was $139.8 million ($1.03 per diluted share) for the year ended December 31, 2005, compared to $71.9 million ($0.56 per diluted share) for the year ended December 31, 2004, representing an increase of $67.9 million ($0.47 per diluted share). The increase in net income for the year ended December 31, 2005, when compared to the same period in 2004, resulted primarily from the following items, all of which are discussed in further detail elsewhere within this Report:

•  $90.6 million more in gains recognized from the sale of depreciable property and an unconsolidated joint venture in 2005,

•  a $32.6 million increase in apartment community operating results in 2005,

•  an $18.1 million increase in non-property income in 2005,

•  a $5.7 million decrease in premiums paid on preferred stock conversions in 2005,

•  a $5.5 million charge recorded for hurricane related expenses in 2004,

•  $4.2 million less in preferred stock distributions in 2005, and

•  $2.5 million in hurricane related insurance recoveries in 2005.

These increases in net income were partially offset by a $38.7 million increase in interest expense, a $31.8 million increase in real estate depreciation and amortization expense, an $8.5 million increase in losses on early debt retirement, and a $5.5 million increase in general and administrative expense in 2005 when compared to 2004.

Apartment Community Operations

Our net income is primarily generated from the operation of our apartment communities. The following table summarizes the operating performance of our total apartment portfolio for each of the periods presented (dollars in thousands):

	Year Ended December 31,									Year Ended December 31,
	2006			2005			% Change			2005			2004			% Change
Property rental income	$	736,329		$	700,344			5.1	%	$	700,344		$	649,952			7.8	%
Property operating expense*		(271,297	)		(269,486	)		0.7	%		(269,486	)		(251,697	)		7.1	%
Property operating income	$	465,032		$	430,858			7.9	%	$	430,858		$	398,255			8.2	%
Weighted average number of homes		73,731			76,069			(3.1	)%		76,069			76,873			(1.0	)%
Physical occupancy**		94.3	%		94.1	%		0.2	%		94.1	%		93.6	%		0.5	%

*	Excludes depreciation, amortization, and property management expenses. Also excludes $5.5 million of hurricane related expenses in 2004 and $2.5 million of hurricane related insurance recoveries in 2005.
**	Based upon weighted average stabilized units.

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The following table is our reconciliation of property operating income to net income as reflected on the Consolidated Statements of Operations for the periods presented (dollars in thousands):

	2006			2005			2004
Property operating income	$	465,032		$	430,858		$	398,255
Commercial operating (loss)/income		(350	)		1,997			427
Non-property income		3,590			20,672			2,606
Depreciation and amortization		(246,934	)		(215,192	)		(184,087	)
Interest		(181,183	)		(162,723	)		(124,001	)
General and administrative and property management		(51,463	)		(44,128	)		(37,197	)
Other operating expenses		(1,238	)		(1,178	)		(1,226	)
Net gain on the sale of land and depreciable property		148,614			139,724			52,903
Loss on early debt retirement		—			(8,483	)		—
Hurricane related expenses		—			—			(5,503	)
Hurricane related insurance recoveries		—			2,457			—
Minority interests		(7,463	)		(8,838	)		(5,025	)
Net income per the Consolidated Statements of Operations	$	128,605		$	155,166		$	97,152

2006-vs.-2005

Same Communities

Our same communities (those communities acquired, developed, and stabilized prior to December 31, 2005 and held on December 31, 2006, which consisted of 60,062 apartment homes) provided 82% of our property operating income for the year ended December 31, 2006.

For the year ended December 31, 2006, same community property operating income increased 8.6% or $30.4 million compared to 2005. The increase in property operating income was primarily attributable to a 6.0% or $34.2 million increase in revenues from rental and other income that was offset by a 1.8% or $3.9 million increase in operating expenses. The increase in revenues from rental and other income was primarily driven by a 4.9% or $28.4 million increase in rental rates, a 17.6% or $2.2 million decrease in concession expense, and a 12.5% or $5.0 million increase in utility reimbursement income and fee income. Physical occupancy increased 0.1% to 94.7%.

The increase in property operating expenses was primarily driven by a 15.8% or $1.6 million increase in insurance costs, a 4.4% or $1.5 million increase in utility costs, a 2.8% or $1.5 million increase in personnel costs, a 1.1% or $0.4 million increase in repair and maintenance expenses, and a 0.5% or $0.3 million increase in real estate taxes. These increases in operating expenses were partially offset by a 6.0% or $1.2 million decrease in administrative and marketing expenses.

As a result of the percentage changes in property rental income and property operating expenses, the operating margin (property operating income divided by property rental income) increased 1.5% to 63.5%.

Non-Mature Communities

The remaining 18% of our property operating income during 2006 was generated from communities that we classify as “non-mature communities” (primarily those communities acquired or developed in 2005 and 2006, sold properties, and those properties classified as real estate held for disposition). The 16 communities with 5,324 apartment homes that we acquired in 2005 and 2006 provided $32.8 million of property operating income. The 46 communities with 14,005 homes and the 624 condominiums from five communities that we sold in 2005 and 2006 provided $18.3 million of property operating income. In addition, our development communities, which included 438 apartment homes completed in 2005 and 2006, provided $2.2 million of operating income and the two communities with 475 apartment homes, one community with 320

36

condominiums, and the one commercial unit classified as real estate held for disposition provided $5.5 million of property operating income. Other non-mature communities provided $23.1 million of property operating income for the year ended December 31, 2006.

2005-vs.-2004

Same Communities

Our same communities (those communities acquired, developed, and stabilized prior to September 30, 2004 and held on December 31, 2005, which consisted of 58,840 apartment homes) provided 73% of our property operating income for the year ended December 31, 2005.

For the year ended December 31, 2005, same community property operating income increased 3.4% or $10.3 million compared to 2004. The increase in property operating income was primarily attributable to a 3.8% or $18.6 million increase in revenues from rental and other income that was partially offset by a 4.4% or $8.3 million increase in operating expenses. The increase in revenues from rental and other income was primarily driven by a 2.0% or $10.3 million increase in rental rates, a 20.2% or $2.9 million decrease in concession expense, a 7.5% or $2.6 million increase in utility reimbursement income and fee income, a 7.8% or $2.5 million decrease in vacancy loss, and a 15.6% or $0.4 million decrease in bad debt expense. Physical occupancy increased 0.6% to 94.5%.

The increase in property operating expenses was primarily driven by a 4.3% or $2.0 million increase in real estate taxes, a 3.8% or $1.9 million increase in personnel costs, a 3.8% or $1.1 million increase in utilities expense, a 2.9% or $0.9 million increase in repair and maintenance costs, a 4.7% or $0.8 million increase in administrative and marketing costs, a 46.7% or $0.7 million increase in incentive compensation, and a 5.4% or $0.5 million increase in insurance costs.

As a result of the percentage changes in property rental income and property operating expenses, the operating margin decreased 0.3% to 61.5%.

Non-Mature Communities

The remaining 27% of our property operating income during 2005 was generated from communities that we classify as “non-mature communities” (primarily those communities acquired or developed in 2003, 2004 and 2005, sold properties, and those properties classified as real estate held for disposition). The 41 communities with 12,458 apartment homes that we acquired in the fourth quarter of 2003, and in 2004 and 2005, provided $87.5 million of property operating income. The 22 communities with 6,352 apartment homes and 240 condominiums sold during 2005 provided $10.0 million of property operating income. In addition, our development communities, which included 244 apartment homes constructed since January 1, 2003, provided $0.7 million of property operating income during 2005, the four communities with a total of 384 condominiums classified as real estate held for disposition provided $0.3 million of property operating income, and other non-mature communities which includes homes that are undergoing major rehabilitation, provided $17.5 million of property operating income for the year ended December 31, 2005.

Real Estate Depreciation and Amortization

For the year ended December 31, 2006, real estate depreciation and amortization on both continuing and discontinued operations increased $31.7 million or 14.8% compared to 2005, primarily due to the significant increase in per home acquisition cost compared to the existing portfolio and other capital expenditures.

For the year ended December 31, 2005, real estate depreciation and amortization on both continuing and discontinued operations increased $31.8 million or 17.6% compared to 2004, primarily due to the significant increase in the per home acquisition cost compared to the existing portfolio and other capital expenditures.

37

Interest Expense

For the year ended December 31, 2006, interest expense on both continuing and discontinued operations increased $18.5 million or 11.3% from 2005 primarily due to the issuance of debt and higher interest rates. For the year ended December 31, 2006, the weighted average amount of debt outstanding increased 11.7% or $350.4 million compared to 2005 and the weighted average interest rate increased from 5.3% to 5.4% during 2006. The weighted average amount of debt outstanding during 2006 is higher than 2005 as acquisition costs in 2005 and in 2006 have been funded, in most part, by the issuance of debt. The increase in the weighted average interest rate during 2006 reflects short-term bank borrowings and variable rate debt that had higher interest rates when compared to the prior year that were partially offset by the retirement of higher coupon debt with lower coupon debt.

For the year ended December 31, 2005, interest expense on both continuing and discontinued operations increased $47.2 million or 38.1% from 2004 primarily due to the issuance of debt and $8.5 million in prepayment penalties. For the year ended December 31, 2005, the weighted average amount of debt outstanding increased 30.7% or $697.4 million compared to 2004 and the weighted average interest rate increased from 5.0% to 5.3% during 2005. The weighted average amount of debt outstanding during 2005 is higher than 2004 as acquisition costs in 2005 have been funded, in most part, by the issuance of debt. The increase in the weighted average interest rate during 2005 reflects short-term bank borrowings and variable rate debt that had higher interest rates when compared to the prior year.

General and Administrative

For the year ended December 31, 2006, general and administrative expenses increased $6.4 million or 25.7% over 2005 due to a number of factors, including increases in incentive compensation, professional fees, relocation costs, and an operating lease on an airplane.

For the year ended December 31, 2005, general and administrative expenses increased $5.5 million or 28.5% over 2004 primarily as a result of an increase in personnel and incentive compensation costs, an operating lease on an airplane, compliance costs and an operations improvement initiative.

Hurricane Related Expenses and Hurricane Related Insurance Recoveries

In 2005, $2.5 million of hurricane related insurance recoveries were recorded. In 2004, we recognized a $5.5 million charge to cover expenses associated with the damage in Florida caused by hurricanes Charley, Frances, and Jeanne. UDR reported that 25 of our 34 Florida communities were affected by the hurricanes.

Gains on the Sale of Land, Depreciable Property and an Unconsolidated Joint Venture

For the years ended December 31, 2006 and 2005, we recognized after-tax gains for financial reporting purposes of $148.6 million and $143.5 million, respectively. Changes in the level of gains recognized from period to period reflect the changing level of our divestiture activity from period to period as well as the extent of gains related to specific properties sold.

Premium on Preferred Stock Conversions

In the fourth quarter of 2004, we exercised our right to redeem 2 million shares of our Series D Cumulative Convertible Redeemable Preferred Stock. Upon receipt of our redemption notice, the shares to be redeemed were converted by the holder into 3,076,769 shares of common stock at a price of $16.25 per share. As a result, we recognized a $5.7 million premium on preferred stock conversions.

The premium amount recognized to convert these shares represents the cumulative accretion to date between the conversion value of the preferred stock and the value at which it was recorded at the time of issuance.

38

eBay Purchase of Rent.com

On December 16, 2004, eBay announced that it had agreed to acquire privately held Rent.com, a leading Internet listing web site in the apartment and rental housing industry, for approximately $415 million plus acquisition costs, net of Rent.com’s cash on hand. On February 23, 2005, eBay announced that it had completed the acquisition. We owned shares in Rent.com, and as a result of the transaction, we recorded a one-time pre-tax gain of $12.3 million on the sale. In August 2006, we received an additional $0.8 million representing our portion of the escrow balance.

Inflation

We believe that the direct effects of inflation on our operations have been immaterial. Substantially all of our leases are for a term of one year or less which generally minimizes our risk from the adverse effects of inflation.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material.

Contractual Obligations

The following table summarizes our contractual obligations as of December 31, 2006 (dollars in thousands):

	Payments Due by Period
Contractual Obligations	Total		2007		2008-2009		2010-2011		Thereafter
Long-Term Debt Obligations	$	3,338,785	$	248,985	$	695,892	$	946,462	$	1,447,446
Capital Lease Obligations		—		—		—		—		—
Operating Lease Obligations		32,882		2,770		5,460		3,681		20,971
Purchase Obligations		—		—		—		—		—
Other Long-Term Liabilities Reflected on the Balance Sheet Under GAAP		—		—		—		—		—

During 2006, we incurred interest costs of $181.2 million, of which $5.2 million was capitalized.

Factors Affecting Our Business and Prospects

There are many factors that affect our business and the results of our operations, some of which are beyond our control. These factors include:

•  unfavorable changes in apartment market and economic conditions that could adversely affect occupancy levels, rental rates and purchase or sale prices of apartment communities,

•  the failure of acquisitions to achieve anticipated results,

•  possible difficulty in selling apartment communities,

•  the timing and closing of planned dispositions under agreement,

•  competitive factors that may limit our ability to lease apartment homes or increase or maintain rents,

•  insufficient cash flow that could affect our debt financing and create refinancing risk,

•  failure to generate sufficient revenue, which could impair our debt service payments and distributions to stockholders,

•  development and construction risks that may impact our profitability,

39

•  potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs,

•  delays in completing developments and lease-ups on schedule,

•  our failure to succeed in new markets,

•  changing interest rates, which could increase interest costs and affect the market price of our securities,

•  potential liability for environmental contamination, which could result in substantial costs, and

•  the imposition of federal taxes if we fail to qualify as a REIT in any taxable year.

Item 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this item is included in and incorporated by reference from Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Report.

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and related financial information required to be filed are attached to this Report. Reference is made to page 44 of this Report for the Index to Consolidated Financial Statements and Schedule.

Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.   CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2006, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Our disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC reports.

It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. However, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective under circumstances where our disclosure controls and procedures should reasonably be expected to operate effectively.

Management’s Report on Internal Control over Financial Reporting

UDR’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, UDR’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations (COSO).

Based on UDR’s evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2006. Management’s assessment of the effectiveness of our internal control over

40

financial reporting as of December 31, 2006, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included herein.

Changes in Internal Control Over Financial Reporting

Our Chief Executive Officer and our Chief Financial Officer concluded that during the quarter ended December 31, 2006, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.   OTHER INFORMATION

None.

PART III

Item 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to the information set forth under the headings “Election of Directors,” “Corporate Governance Matters,” “Audit Committee Report,” “Corporate Governance Matters-Audit Committee Financial Expert,” “Corporate Governance Matters-Identification and Selection of Nominees for Directors,” “Corporate Governance Matters-Board of Directors and Committee Meetings” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007.

Information required by this item regarding our executive officers is included in Part I of this Report in the section entitled “Business-Executive Officers of the Company.”

We have a code of ethics for senior financial officers that applies to our principal executive officer, all members of our finance staff, including the principal financial officer, the principal accounting officer, the treasurer and the controller, our director of investor relations, our corporate secretary, and all other company officers. We also have a code of business conduct and ethics that applies to all of our employees. Information regarding our codes is available on our website, www.udrt.com, and is incorporated by reference to the information set forth under the heading “Corporate Governance Matters” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007. We intend to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment to, or a waiver from, a provision of our codes by posting such amendment or waiver on our website.

Item 11.   EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the information set forth under the headings “Security Ownership of Certain Beneficial Owners and Management,” “Corporate Governance Matters-Compensation Committee Interlocks and Insider Participation,” “Executive Compensation,” “Compensation of Directors” and “Compensation Committee Report” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007.

Item 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to the information set forth under the headings “Security Ownership of Certain Beneficial Owners and Management,” “Executive Compensation” and “Equity Compensation Plan Information” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007.

41

Item 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to the information set forth under the heading “Security Ownership of Certain Beneficial Owners and Management,” “Corporate Governance Matters-Corporate Governance Overview,” “Corporate Governance Matters-Director Independence,” “Corporate Governance Matters-Independence of Audit, Compensation and Governance Committees,” and “Executive Compensation” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007.

Item 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to the information set forth under the headings “Audit Fees” and “Pre-Approval Policies and Procedures” in our definitive proxy statement for our Annual Meeting of Stockholders to be held on May 8, 2007.

PART IV

Item 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Report:

1. Financial Statements.  See Index to Consolidated Financial Statements and Schedule on page 44 of this Report.

2. Financial Statement Schedule.  See Index to Consolidated Financial Statements and Schedule on page 44 of this Report. All other schedules are omitted because they are not required, are inapplicable, or the required information is included in the financial statements or notes thereto.

3. Exhibits.  The exhibits filed with this Report are set forth in the Exhibit Index.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED DOMINION REALTY TRUST, INC.
Date: March 1, 2007	By:	/s/  Thomas W. Toomey Thomas W. Toomey Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on March 1, 2007 by the following persons on behalf of the registrant and in the capacities indicated.

/s/  Thomas W. Toomey Thomas W. Toomey Chief Executive Officer, President, and Director	/s/  Jon A. Grove Jon A. Grove Director
/s/  Michael A. Ernst Michael A. Ernst Executive Vice President and Chief Financial Officer	/s/  Thomas R. Oliver Thomas R. Oliver Director
/s/  David L. Messenger David L. Messenger Senior Vice President and Chief Accounting Officer	/s/  Lynne B. Sagalyn Lynne B. Sagalyn Director
/s/  Robert C. Larson Robert C. Larson Chairman of the Board	/s/  Mark J. Sandler Mark J. Sandler Director
/s/  James D. Klingbeil James D. Klingbeil Vice Chairman of the Board	/s/  Thomas C. Wajnert Thomas C. Wajnert Director
/s/  Katherine A. Cattanach Katherine A. Cattanach Director
/s/  Eric J. Foss Eric J. Foss Director
/s/  Robert P. Freeman Robert P. Freeman Director

43

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

UNITED DOMINION REALTY TRUST, INC.

	Page
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		45
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm		46
Consolidated Balance Sheets at December 31, 2006 and 2005		47
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2006		48
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2006		49
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2006		50
Notes to Consolidated Financial Statements		52
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III — Summary of Real Estate Owned		75

All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.

44

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Board of Directors and Stockholders

United Dominion Realty Trust, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting included at Item 9A, that United Dominion Realty Trust, Inc. (the “Company”) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006 of United Dominion Realty Trust, Inc. and our report dated February 23, 2007 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Richmond, Virginia

February 23, 2007

45

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

United Dominion Realty Trust, Inc.

We have audited the accompanying consolidated balance sheets of United Dominion Realty Trust, Inc. (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of United Dominion Realty Trust, Inc. at December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2007 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Richmond, Virginia

February 23, 2007

46

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share data)

	December 31,
	2006			2005
ASSETS
Real estate owned:
Real estate held for investment	$	5,559,156		$	4,931,085
Less: accumulated depreciation		(1,238,392	)		(1,000,109	)
		4,320,764			3,930,976
Real estate under development (net of accumulated depreciation of $527 and $140)		203,786			90,769
Real estate held for disposition (net of accumulated depreciation of $14,808 and $123,580)		41,845			366,850
Total real estate owned, net of accumulated depreciation		4,566,395			4,388,595
Cash and cash equivalents		2,143			15,543
Restricted cash		5,602			4,583
Deferred financing costs, net		35,160			31,036
Notes receivable		10,500			64,805
Other assets		43,123			33,727
Other assets — real estate held for disposition		12,952			3,304
Total assets	$	4,675,875		$	4,541,593
LIABILITIES AND STOCKHOLDERS’ EQUITY
Secured debt	$	1,182,919		$	1,062,526
Secured debt — real estate held for disposition		—			53,733
Unsecured debt		2,155,866			2,043,518
Real estate taxes payable		25,557			22,413
Accrued interest payable		34,347			26,672
Security deposits and prepaid rent		25,249			24,046
Distributions payable		46,936			45,313
Accounts payable, accrued expenses, and other liabilities		54,878			53,162
Other liabilities — real estate held for disposition		6,035			18,667
Total liabilities		3,531,787			3,350,050
Minority interests		88,833			83,819
Stockholders’ equity:
Preferred stock, no par value; 50,000,000 shares authorized 5,416,009 shares 8.60% Series B Cumulative Redeemable issued and     outstanding (5,416,009 in 2005)		135,400			135,400
2,803,812 shares 8.00% Series E Cumulative Convertible issued and outstanding (2,803,812 in 2005)		46,571			46,571
Common stock, $0.01 par value; 250,000,000 shares authorized, 135,029,126 shares issued and outstanding (134,012,053 in 2005)		1,350			1,340
Additional paid-in capital		1,682,809			1,680,115
Distributions in excess of net income		(810,875	)		(755,702	)
Total stockholders’ equity		1,055,255			1,107,724
Total liabilities and stockholders’ equity	$	4,675,875		$	4,541,593

See accompanying notes to consolidated financial statements.

47

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Years Ended December 31,
	2006			2005			2004
REVENUES
Rental income	$	694,473		$	621,904		$	513,463
Non-property income:
Sale of technology investment		796			12,306			—
Sale of unconsolidated joint venture		—			3,823			—
Other income		2,789			4,535			2,608
Total non-property income		3,585			20,664			2,608
Total revenues		698,058			642,568			516,071
EXPENSES
Rental expenses:
Real estate taxes and insurance		83,527			74,510			59,795
Personnel		67,928			62,674			52,937
Utilities		39,821			36,494			30,897
Repair and maintenance		40,942			36,595			37,829
Administrative and marketing		21,348			21,463			17,904
Property management		20,265			19,309			17,881
Other operating expenses		1,238			1,178			1,226
Real estate depreciation and amortization		236,523			193,517			147,133
Interest		182,285			162,773			122,024
General and administrative		31,198			24,819			19,316
Other depreciation and amortization		3,009			2,655			3,201
Loss on early debt retirement		—			6,662			—
Total expenses		728,084			642,649			510,143
(Loss)/income before minority interests and discontinued operations		(30,026	)		(81	)		5,928
Minority interests of outside partnerships		(103	)		(108	)		(182	)
Minority interests of unitholders in operating partnerships		2,722			918			1,230
(Loss)/income before discontinued operations, net of minority interests		(27,407	)		729			6,976
Income from discontinued operations, net of minority interests		156,012			154,437			90,176
Net income		128,605			155,166			97,152
Distributions to preferred stockholders — Series B		(11,644	)		(11,644	)		(11,644	)
Distributions to preferred stockholders — Series D (Convertible)		—			—			(3,473	)
Distributions to preferred stockholders — Series E (Convertible)		(3,726	)		(3,726	)		(4,414	)
Premium on preferred stock conversions		—			—			(5,729	)
Net income available to common stockholders	$	113,235		$	139,796		$	71,892
Earnings per common share — basic and diluted:
Loss from continuing operations available to common stockholders, net of minority interests	$	(0.32	)	$	(0.11	)	$	(0.14	)
Income from discontinued operations, net of minority interests	$	1.17		$	1.14		$	0.70
Net income available to common stockholders	$	0.85		$	1.03		$	0.56
Common distributions declared per share	$	1.25		$	1.20		$	1.17
Weighted average number of common shares outstanding — basic		133,732			136,143			128,097
Weighted average number of common shares outstanding — diluted		133,732			136,143			128,097

See accompanying notes to consolidated financial statements.

48

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended December 31,
	2006			2005			2004
Operating Activities
Net income	$	128,605		$	155,166		$	97,152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		246,934			215,192			184,088
Net gains on the sale of land and depreciable property		(148,614	)		(139,724	)		(52,903	)
Cancellation of operating partnership units in connection with the sale of equity investment		—			(1,000	)		—
Gain on the sale of technology investment		(796	)		(12,306	)		—
Gain on the sale of unconsolidated joint venture		—			(3,823	)		—
Distribution of earnings from unconsolidated joint venture		—			124			—
Minority interests		7,463			8,838			5,025
Amortization of deferred financing costs and other		6,063			5,287			7,206
Amortization of deferred compensation		—			2,939			2,780
Prepayments on income taxes		(6,288	)		—			—
Changes in operating assets and liabilities:
(Increase)/decrease in operating assets		(2,713	)		8,695			(1,769	)
(Decrease)/increase in operating liabilities		(1,041	)		8,798			10,168
Net cash provided by operating activities		229,613			248,186			251,747
Investing Activities
Proceeds from the sale of real estate investments, net		492,744			308,753			190,105
Repayment of notes receivable		59,805			64,845			75,586
Acquisition of real estate assets (net of liabilities assumed) and initial capital expenditures		(365,606	)		(413,744	)		(755,966	)
Development of real estate assets		(101,849	)		(49,343	)		(19,131	)
Capital expenditures and other major improvements — real estate assets, net of escrow reimbursement		(215,721	)		(156,122	)		(82,390	)
Capital expenditures — non-real estate assets		(3,465	)		(3,209	)		(1,578	)
Distributions to consolidated joint venture partners		(6,823	)		—			—
Proceeds from the sale of technology investment		796			12,306			—
Purchase deposits on pending real estate acquisitions		(4,354	)		—			—
Issuance of notes receivable		(5,500	)		—			—
Distribution of capital from unconsolidated joint venture		—			458			—
Decrease/(increase) in funds held in escrow from tax free exchanges pending the acquisition of real estate		—			17,039			(2,592	)
Net cash used in investing activities		(149,973	)		(219,017	)		(595,966	)
Financing Activities
Proceeds from the issuance of secured debt		78,860			25,342			—
Scheduled principal payments on secured debt		(70,339	)		(8,611	)		(36,814	)
Non-scheduled principal payments on secured debt		—			(125,221	)		(95,011	)
Proceeds from the issuance of unsecured debt		375,000			499,983			475,775
Payments on unsecured debt		(138,849	)		(70,860	)		(46,585	)
Net (repayment)/proceeds of revolving bank debt		(123,600	)		(67,300	)		140,200
Purchase of capped call equity instrument		(12,588	)		—			—
Payment of financing costs		(10,284	)		(14,455	)		(8,849	)
Proceeds from the issuance of common stock		5,303			4,334			99,461
Proceeds from the repayment of officer loans		—			—			459
Proceeds from the issuance of performance shares		400			343			(50	)
Purchase of minority interests owned by Series A LLC		(2,059	)		—			—
Purchase of minority interest from outside partners		—			(522	)		—
Conversion of operating partnership units to cash		—			(50	)		—
Distributions paid to minority interests		(12,729	)		(12,900	)		(13,553	)
Distributions paid to preferred stockholders		(15,370	)		(15,370	)		(20,347	)
Distributions paid to common stockholders		(166,785	)		(163,001	)		(147,387	)
Repurchases of common and preferred stock		—			(73,242	)		—
Net cash (used in)/provided by financing activities		(93,040	)		(21,530	)		347,299
Net (decrease)/increase in cash and cash equivalents		(13,400	)		7,639			3,080
Cash and cash equivalents, beginning of year		15,543			7,904			4,824
Cash and cash equivalents, end of year	$	2,143		$	15,543		$	7,904
Supplemental Information:
Interest paid during the period	$	174,871		$	160,367		$	115,519
Non-cash transactions:
Conversion of operating partnership minority interests to common stock (381,001 shares in 2006, 99,573 shares in 2005, 170,209 shares in 2004)		7,988			1,444			2,035
Conversion of minority interests in Series B, LLC		—			690			—
Issuance of restricted stock awards		2,754			7,709			3,250
Issuance of operating partnership units in connection with acquisitions		—			7,653			—
Cancellation of a note receivable with the acquisition of a property		—			—			8,000
Secured debt assumed with the acquisition of properties		24,512			26,825			311,714
Receipt of a note receivable in connection with sales of real estate investments		—			124,650			75,586
Deferred gain in connection with the sale of real estate investments		—			6,410			—
Non-cash transactions associated with consolidated joint venture:
Real estate assets acquired		62,059			—			—
Secured debt assumed		33,627			—			—
Operating liabilities assumed		3,840			—			—

See accompanying notes to consolidated financial statements.

49

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

																			Deferred			Notes
																Distributions			Compensation-			Receivable			Accumulated
																in			Unearned			from			Other
	Preferred Stock						Common Stock						Paid-in			Excess of			Restricted			Officer-			Comprehensive
	Shares			Amount			Shares			Amount			Capital			Net Income			Stock Awards			Stockholders			Loss			Total
Balance, December 31, 2003		10,841,226		$	236,564			127,295,126		$	127,295		$	1,458,983		$	(651,497	)	$	(5,588	)	$	(459	)	$	(1,862	)	$	1,163,436
Comprehensive Income
Net income																	97,152												97,152
Other comprehensive income:
Unrealized gain on derivative financial instruments																										1,862			1,862
Comprehensive income																	97,152									1,862			99,014
Issuance of common and restricted shares								769,083			769			10,171															10,940
Issuance of common shares through public offering								4,497,000			4,497			86,804															91,301
Adjustment for conversion of minority interests of unitholders in operating partnerships								170,209			170			1,865															2,035
Principal repayments on notes receivable from officer-stockholders																							459						459
Accretion of premium on Series D conversions					5,729												(5,729	)											—
Conversion of 7.50%
Series D Cumulative
Convertible Redeemable shares		(2,000,000	)		(50,000	)		3,076,769			3,077			46,923															—
Conversion of 8.00% Series E Cumulative
Convertible shares		(621,405	)		(10,322	)		621,405			622			9,700															—
Common stock distributions declared ($1.17 per share)																	(152,203	)											(152,203	)
Preferred stock distributions declared-Series B ($2.15 per share)																	(11,644	)											(11,644	)
Preferred stock distributions declared-Series D ($2.09 per share)																	(3,473	)											(3,473	)
Preferred stock distributions declared-Series E ($1.33 per share)																	(4,414	)											(4,414	)
Adjustment for FASB 123 adoption														(5,588	)					5,588									—
Balance, December 31, 2004		8,219,821			181,971			136,429,592			136,430			1,608,858			(731,808	)		—			—			—			1,195,451
Comprehensive Income
Net income																	155,166												155,166
Comprehensive income																	155,166												155,166
Issuance of common and restricted shares								663,238			680			6,595															7,275
Common shares repurchased								(3,180,350	)		(32	)		(73,210	)														(73,242	)
Adjustment for change in par value from $1.00 to $0.01											(135,822	)		135,822															—
Adjustment for conversion of minority interests of unitholders in operating partnerships								99,573			84			1,360															1,444
Adjustment for conversion of minority interests in Series B LLC														690															690
Common stock distributions declared ($1.20 per share)																	(163,690	)											(163,690	)
Preferred stock distributions declared-Series B ($2.15 per share)																	(11,644	)											(11,644	)
Preferred stock distributions declared-Series E ($1.33 per share)																	(3,726	)											(3,726	)

50

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY — (Continued)

(In thousands, except share data)

															Deferred		Notes
												Distributions			Compensation-		Receivable		Accumulated
												in			Unearned		from		Other
	Preferred Stock				Common Stock				Paid-in			Excess of			Restricted		Officer-		Comprehensive
	Shares		Amount		Shares		Amount		Capital			Net Income			Stock Awards		Stockholders		Loss		Total
Balance, December 31, 2005		8,219,821		181,971		134,012,053		1,340		1,680,115			(755,702	)		—		—		—		1,107,724
Comprehensive Income
Net income													128,605									128,605
Comprehensive income													128,605									128,605
Issuance of common and restricted shares and other						636,072		6		9,357												9,363
Adjustment for conversion of minority interests of unitholders in operating partnerships						381,001		4		7,984												7,988
Adjustment for conversion of minority interests owned by Series A LLC										(2,059	)											(2,059	)
Purchase of capped call equity instrument										(12,588	)											(12,588	)
Common stock distributions declared ($1.25 per share)													(168,408	)								(168,408	)
Preferred stock distributions declared-Series B ($2.15 per share)													(11,644	)								(11,644	)
Preferred stock distributions declared-Series E ($1.33 per share)													(3,726	)								(3,726	)
Balance, December 31, 2006		8,219,821	$	181,971		135,029,126	$	1,350	$	1,682,809		$	(810,875	)	$	—	$	—	$	—	$	1,055,255

See accompanying notes to consolidated financial statements.

51

UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and formation

United Dominion Realty Trust, Inc., a Maryland corporation, was formed in 1972. We operate within one defined business segment with activities related to the ownership, management, development, acquisition, renovation, and disposition of multifamily apartment communities nationwide. At December 31, 2006, we owned 242 communities and had five communities under development.

Basis of presentation

The accompanying consolidated financial statements include the accounts of UDR and its subsidiaries, including United Dominion Realty, L.P., (the “Operating Partnership”), and Heritage Communities L.P. (the “Heritage OP”), (collectively, “UDR”). As of December 31, 2006, there were 166,185,740 units in the Operating Partnership outstanding, of which 156,493,682 units or 94% were owned by UDR and 9,692,058 units or 6% were owned by limited partners (of which 1,650,322 are owned by the holders of the Series A OPPS). As of December 31, 2006, there were 5,542,200 units in the Heritage OP outstanding, of which 5,212,993 units or 94% were owned by UDR and 329,207 units or 6% were owned by limited partners. The consolidated financial statements of UDR include the minority interests of the unitholders in the Operating Partnership and the Heritage OP. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. Certain previously reported amounts have been reclassified to conform to the current financial statement presentation.

Real estate

Real estate assets held for investment are carried at historical cost less accumulated depreciation and any recorded impairment losses.

Expenditures for ordinary repair and maintenance costs are charged to expense as incurred. Expenditures for improvements, renovations, and replacements related to the acquisition and/or improvement of real estate assets are capitalized at cost and depreciated over their estimated useful lives if the value of the existing asset will be materially enhanced or the life of the related asset will be substantially extended beyond the original life expectancy.

UDR recognizes impairment losses on long-lived assets used in operations when there is an event or change in circumstance that indicates an impairment in the value of an asset and the undiscounted future cash flows are not sufficient to recover the asset’s carrying value. Our cash flow estimates are based upon historical results adjusted to reflect our best estimate of future market and operating conditions and our estimated holding periods. If such indicators of impairment are present, an impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. Our estimates of fair market value represent our best estimate based upon industry trends and reference to market rates and transactions.

UDR purchases real estate investment properties from time to time and allocates the purchase price to various components, such as land, buildings, and intangibles related to in-place leases in accordance with FASB Statement No. 141, “Business Combinations.” The purchase price is allocated based on the relative fair

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UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

value of each component. The fair value of buildings is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates. As such, the determination of fair value considers the present value of all cash flows expected to be generated from the property including an initial lease up period. UDR determines the fair value of in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition. The fair value of in-place leases is recorded and amortized as amortization expense over the remaining contractual lease period. UDR determines the fair value of in-place leases by considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period, and the carrying costs associated with the lease-up period.

For long-lived assets to be disposed of, impairment losses are recognized when the fair value of the asset less estimated cost to sell is less than the carrying value of the asset. Properties classified as real estate held for disposition generally represent properties that are actively marketed or contracted for sale which are expected to close within the next twelve months. Real estate held for disposition is carried at the lower of cost, net of accumulated depreciation, or fair value, less the cost to dispose, determined on an asset-by-asset basis. Expenditures for ordinary repair and maintenance costs on held for disposition properties are charged to expense as incurred. Expenditures for improvements, renovations, and replacements related to held for disposition properties are capitalized at cost. Depreciation is not recorded on real estate held for disposition.

Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets which is 35 years for buildings, 10 to 35 years for major improvements, and 3 to 10 years for furniture, fixtures, equipment, and other assets. The value of acquired in-place leases is amortized over the remaining term of each acquired in-place lease.

All development projects and related carrying costs are capitalized and reported on the Consolidated Balance Sheet as “Real estate under development.” As each building in a project is completed and becomes available for lease-up, the total cost of the building is transferred to real estate held for investment and the assets are depreciated over their estimated useful lives. The cost of development projects includes interest, real estate taxes, insurance, and allocated development overhead during the construction period.

Interest, real estate taxes, and incremental labor and support costs for personnel working directly on the development site are capitalized as part of the real estate under development to the extent that such charges do not cause the carrying value of the asset to exceed its net realizable value. During 2006, 2005, and 2004, total interest capitalized was $5.2 million, $2.8 million, and $1.0 million, respectively.

Cash equivalents

Cash equivalents include all cash and liquid investments with maturities of three months or less when purchased.

Restricted cash

Restricted cash consists of escrow deposits held by lenders for real estate taxes, insurance and replacement reserves, and security deposits.

Deferred financing costs

Deferred financing costs include fees and other external costs incurred to obtain debt financings and are generally amortized on a straight-line basis, which approximates the effective interest method, over a period not to exceed the term of the related debt. Unamortized financing costs are written-off when debt is retired before its maturity date. During 2006, 2005, and 2004, amortization expense was $6.1 million, $6.5 million, and $5.1 million, respectively.

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UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investments in unconsolidated development joint ventures

Investments in unconsolidated joint ventures are accounted for using the equity method when major business decisions require approval by the other partners and UDR does not have control of the assets. Investments are recorded at cost and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. UDR eliminates intercompany profits on sales of services that are provided to joint ventures. Differences between the carrying value of investments and the underlying equity in net assets of the investee are due to capitalized interest on the investment balance and capitalized development and leasing costs that are recovered by UDR through fees during construction.

Revenue recognition

UDR’s apartment homes are leased under operating leases with terms generally of one year or less. Rental income is recognized as it is earned and collectability is reasonably assured.

Advertising costs

All advertising costs are expensed as incurred and reported on the Consolidated Statements of Operations within the line item “Administrative and marketing.” During 2006, 2005, and 2004, total advertising expense was $9.3 million, $11.2 million, and $10.5 million, respectively

Interest rate swap agreements

UDR accounts for its derivative instruments in accordance with Statements of Financial Accounting Standards No. 133 and No. 138, “Accounting for Certain Derivative Instruments and Hedging Activities.” At December 31, 2006, UDR has no derivative financial instruments reported on its Consolidated Balance Sheet. Prior to their maturity in July 2004, UDR’s derivative financial instruments consisted of interest rate swap agreements that were designated as cash flow hedges of debt with variable interest rate features, and as qualifying hedges for financial reporting purposes. For a derivative instrument that qualifies as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings during the same period or periods during which the hedged transaction affects earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, is recognized in current earnings during the period of change.

As part of UDR’s overall interest rate risk management strategy, UDR used derivative financial instruments as a means to artificially fix variable rate debt or to hedge anticipated financing transactions. UDR’s derivative transactions used for interest rate risk management included various interest rate swaps with indices that related to the pricing of specific financial instruments of UDR. Because of the close correlation between the hedging instrument and the underlying cash flow exposure being hedged, fluctuations in the value of the derivative instruments were generally offset by changes in the cash flow of the underlying exposures. As a result, UDR appropriately controlled the risk so that derivatives used for interest rate risk management would not have a material unintended effect on consolidated earnings. UDR does not enter into derivative financial instruments for trading purposes.

The fair value of UDR’s derivative instruments were reported on the balance sheet at their current fair value. The estimated fair value for our interest rate swaps relied on prevailing market interest rates. The interest rate swap agreements were designated with all or a portion of the principal balance and term of a specific debt obligation. Each interest rate swap involved the periodic exchange of payments over the life of the related agreement. An amount received or paid on the interest rate swap was recorded on an accrual basis as an adjustment to the related interest expense of the outstanding debt based on the accrual method of

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UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accounting. The related amount payable to and receivable from counterparties was included in other liabilities and other assets, respectively.

When the terms of the underlying transaction were modified, or when the underlying hedged item ceased to exist, all changes in the fair value of the instrument were marked-to-market with changes in value included in net income each period until the instrument matured, unless the instrument was redesignated as a hedge of another transaction. If a derivative instrument was terminated or the hedging transaction was no longer determined to be effective, amounts held in accumulated other comprehensive income were reclassified into earnings over the term of the future cash outflows on the related debt.

Comprehensive income

Comprehensive income, which is defined as all changes in equity during each period except for those resulting from investments by or distributions to stockholders, is displayed in the accompanying Statements of Stockholders’ Equity. Other comprehensive income for 2004 consisted of unrealized gains or losses from derivative financial instruments. There is no difference between net income and total comprehensive income for 2006 and 2005.

Stock-based employee compensation plans

UDR adopted the fair-value-based method of accounting for share-based payments effective January 1, 2004, using the prospective method described in FASB Statement No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” UDR adopted Statement 123(R) on January 1, 2006, and has continued to use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees, which have not been granted since 2002. Statement 123(R) must be applied not only to new awards but to previously granted awards that are not fully vested on the effective date (as of January 1, 2006, there were no unvested stock options). UDR adopted Statement 123 using the modified prospective transition method (which applied only to awards granted, modified or settled after the adoption date). The adoption of the provisions of Statement 123(R) did not have a material impact on our financial position, results of operations, or cash flows.

Minority interests of unitholders in operating partnerships

Interests in operating partnerships held by limited partners are represented by operating partnership units (“OP Units”). The operating partnerships’ income is allocated to holders of OP Units based upon net income available to common stockholders and the weighted average number of OP Units outstanding to total common shares plus OP Units outstanding during the period. Capital contributions, distributions, and profits and losses are allocated to minority interests in accordance with the terms of the individual partnership agreements. OP Units can be exchanged for cash or shares of UDR’s common stock on a one-for-one basis, at the option of UDR. OP Units, as a percentage of total OP Units and shares outstanding, were 6.1% at December 31, 2006, 5.9% at December 31, 2005, and 6.3% at December 31, 2004.

Minority interests of outside partnerships

UDR has limited partners in certain real estate partnerships acquired in certain merger transactions. Net income for these partnerships is allocated based upon the percentage interest owned by these limited partners in each respective real estate partnership.

Earnings per share

Basic earnings per common share is computed based upon the weighted average number of common shares outstanding during the year. Diluted earnings per common share is computed based upon common

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UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

shares outstanding plus the effect of dilutive stock options and other potentially dilutive common stock equivalents. The dilutive effect of stock options and other potentially dilutive common stock equivalents is determined using the treasury stock method based on UDR’s average stock price.

The following table sets forth the computation of basic and diluted earning per share (dollars in thousands, except per share amounts):

	2006			2005			2004
Numerator for basic and diluted earnings per share —
Net income available to common stockholders	$	113,235		$	139,796		$	71,892
Denominator:
Denominator for basic earnings per share —
Weighted average common shares outstanding		134,533			136,920			128,711
Non-vested restricted stock awards		(801	)		(777	)		(614	)
		133,732			136,143			128,097
Effect of dilutive securities:
Employee stock options, non-vested restricted stock awards, and convertible debt		—			—			—
Denominator for dilutive earnings per share		133,732			136,143			128,097
Basic earnings per share	$	0.85		$	1.03		$	0.56
Diluted earnings per share	$	0.85		$	1.03		$	0.56

The effect of the conversion of the operating partnership units, Series A, Series C, and Series D Out-Performance Partnership Shares, convertible preferred stock, and convertible debt is not dilutive and is therefore not included in the above calculations. If the operating partnership units were converted to common stock, the additional shares of common stock outstanding for the three years ended December 31, 2006, would be 8,693,981, 8,545,786, and 8,669,310 weighted average common shares, respectively. If the Series A Out-Performance Partnership Shares were converted to common stock, the additional shares of common stock outstanding for the three years ended December 31, 2006, would be 1,716,659, 1,778,251, and 1,791,329 weighted average common shares, respectively. If the convertible preferred stock were converted to common stock, the additional shares of common stock outstanding for the three years ended December 31, 2006, would be 2,803,812, 2,803,812, and 6,301,821 weighted average common shares, respectively. If the Series C and Series D Out-Performance Partnership Shares were converted to common stock, the additional shares of common stock outstanding for the year ended December 31, 2006, would be 313,145 and 75,869 weighted average common shares, respectively. If the convertible debt was converted to common stock, the additional shares of common stock outstanding for the year ended December 31, 2006, would be 68,132 weighted average common shares.

Income taxes

UDR is operated as, and elects to be taxed as, a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Generally, a REIT complies with the provisions of the Code if it meets certain requirements concerning its income and assets, as well as if it distributes at least 90% of its REIT taxable income to its stockholders and will not be subject to U.S. federal income taxes if it distributes at least 100% of its income. Accordingly, no provision has been made for federal income taxes of the REIT. UDR is subject to certain state and local excise or franchise taxes, for which provision has been made. If we fail to qualify as a REIT in any taxable year, our taxable income will be subject to United States Federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify

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UNITED DOMINION REALTY TRUST, INC.

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as a REIT, we may be subject to certain state and local income taxes and to United States Federal income tax. We also will be required to pay a 100% tax on non-arms length transactions between us and a taxable REIT subsidiary and on any net income from sales of property that the IRS successfully asserts was property held for sale to customers in the ordinary course.

The differences between net income available to common stockholders for financial reporting purposes and taxable income before dividend deductions relate primarily to temporary differences, principally real estate depreciation and the tax deferral of certain gains on property sales. The differences in depreciation result from differences in the book and tax basis of certain real estate assets and the differences in the methods of depreciation and lives of the real estate assets.

Consolidation of development partnerships

UDR adopted FASB Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities,” as required, effective March 31, 2004. The adoption required the consolidation of all previously unconsolidated development projects, in which UDR was deemed to be the primary beneficiary. FIN No. 46 requires the Company to consolidate the assets, liabilities and results of operations of the activities of a variable interest entity, for which the Company includes only its development partnerships, if the Company is the primary beneficiary of the partnership. The primary beneficiary is the partner that is entitled to receive a majority of the entity’s residual returns and/or is subject to a majority of the risk of loss from such entity’s activities. As of December 31, 2006, UDR was the primary beneficiary of, and therefore consolidated, its three development partnerships.

Impact of recently issued accounting pronouncements

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.” This interpretation requires that income tax positions recognized in an entity’s tax returns have a more-likely-than-not chance of being sustained prior to recording the related tax benefit in the financial statements. Tax benefits would be derecognized if information became available which indicated that it was more-likely-than-not that the position would not be sustained. UDR will adopt this interpretation in the first quarter of fiscal 2007. The Company has substantially completed its analysis of the interpretation and does not expect it to have a material impact on its financial position.

2.   REAL ESTATE OWNED

UDR operates in 33 markets dispersed throughout 16 states. At December 31, 2006, our largest apartment market was Orange County, California, where we owned 12% of our apartment homes, based upon carrying value. Excluding Orange County, California, UDR did not own more than 8% of its apartment homes in any one market, based upon carrying value.

The following table summarizes real estate held for investment at December 31, (dollars in thousands):

	2006			2005
Land and land improvements	$	1,359,691		$	1,220,654
Buildings and improvements		3,899,409			3,466,573
Furniture, fixtures, and equipment		300,056			243,858
Real estate held for investment		5,559,156			4,931,085
Accumulated depreciation		(1,238,392	)		(1,000,109	)
Real estate held for investment, net	$	4,320,764		$	3,930,976

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The following is a summary of real estate held for investment by major geographic markets (in order of carrying value, excluding real estate held for disposition and real estate under development) at December 31, 2006 (dollars in thousands):

	Number of		Initial
	Apartment		Acquisition		Carrying		Accumulated
	Communities		Cost		Value		Depreciation		Encumbrances
WESTERN REGION
Orange County, CA		13	$	642,350	$	684,460	$	50,353	$	114,255
San Francisco, CA		10		427,219		445,360		43,450		19,645
Los Angeles, CA		6		186,774		197,287		21,291		90,722
San Diego, CA		5		154,551		162,878		15,434		39,176
Inland Empire, CA		3		91,763		145,540		14,124		13,394
Monterey Peninsula, CA		7		85,323		144,133		27,064		—
Seattle, WA		6		107,432		114,875		17,159		58,621
Portland, OR		5		76,990		86,271		14,912		20,576
Sacramento, CA		2		51,899		64,563		16,005		45,837
MID-ATLANTIC REGION
Metropolitan DC		8		214,961		249,270		39,663		30,691
Raleigh, NC		11		179,935		229,947		80,499		68,059
Baltimore, MD		10		146,257		176,424		46,277		13,286
Richmond, VA		9		106,326		174,696		62,532		61,532
Wilmington, NC		6		64,213		103,893		39,035		—
Charlotte, NC		6		63,833		88,685		24,081		—
Norfolk, VA		6		42,741		74,475		32,261		9,118
Other Mid-Atlantic		13		92,985		145,972		59,316		36,232
SOUTHEASTERN REGION
Tampa, FL		12		213,597		273,531		71,233		63,253
Orlando, FL		12		142,034		219,802		78,286		47,871
Nashville, TN		10		132,719		187,754		49,632		71,585
Jacksonville, FL		4		82,178		110,344		31,193		17,043
Atlanta, GA		6		57,669		84,779		32,394		23,884
Other Florida		8		132,913		164,164		39,076		52,588
Other Southeastern		7		54,609		79,467		34,947		—
SOUTHWESTERN REGION
Houston, TX		16		185,965		265,438		79,615		40,693
Dallas, TX		6		192,525		199,570		22,376		23,971
Arlington, TX		6		75,335		95,916		29,851		20,543
Austin, TX		5		75,779		87,073		24,055		6,073
Denver, CO		2		64,362		70,425		18,699		—
Phoenix, AZ		3		45,168		67,116		21,949		27,771
Other Southwestern		6		122,301		149,892		45,924		41,674
MIDWESTERN REGION
Columbus, OH		6		111,315		165,785		46,884		40,635
Other Midwestern		3		20,241		24,890		6,694		6,241
Richmond Corporate		—		554		4,091		1,137		—
Commercial		—		20,223		20,390		991		10,276
		238	$	4,465,039	$	5,559,156	$	1,238,392	$	1,115,245

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The following is a summary of real estate held for disposition by major category at December 31, 2006 (dollars in thousands):

	Initial
	Acquisition		Carrying		Accumulated
	Cost		Value		Depreciation		Encumbrances
Apartments	$	51,062	$	52,506	$	14,808	$	—
Land		3,932		4,147		—		—
	$	54,994	$	56,653	$	14,808	$	—

The following is a summary of real estate under development by major category at December 31, 2006 (dollars in thousands):

	Initial
	Acquisition		Carrying		Accumulated
	Cost		Value		Depreciation		Encumbrances
Apartments	$	20,752	$	34,377	$	—	$	—
Land and joint ventures		109,776		169,936		527		67,674
	$	130,528	$	204,313	$	527	$	67,674
Total Real Estate Owned	$	4,650,561	$	5,820,122	$	1,253,727	$	1,182,919

3.   INCOME FROM DISCONTINUED OPERATIONS

UDR adopted FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” (FAS 144) as of January 1, 2002. FAS 144 requires, among other things, that the primary assets and liabilities and the results of operations of UDR’s real properties which have been sold subsequent to January 1, 2005, or are held for disposition subsequent to January 1, 2005, be classified as discontinued operations and segregated in UDR’s Consolidated Statements of Operations and Balance Sheets. Properties classified as real estate held for disposition generally represent properties that are actively marketed or contracted for sale which are expected to close within the next twelve months.

For purposes of these financial statements, FAS 144 results in the presentation of the primary assets and liabilities and the net operating results of those properties sold or classified as held for disposition through December 31, 2006, as discontinued operations for all periods presented. The adoption of FAS 144 does not have an impact on net income available to common stockholders. FAS 144 only results in the reclassification of the operating results of all properties sold or classified as held for disposition through December 31, 2006 within the Consolidated Statements of Operations for the years ended December 31, 2006, 2005, and 2004, and the reclassification of the assets and liabilities within the Consolidated Balance Sheets as of December 31, 2006 and 2005.

For the year ended December 31, 2006, UDR sold 24 communities and 384 condominiums from four communities with a total of 612 condominiums. We recognized gains for financial reporting purposes of $148.6 million on these sales. At December 31, 2006, UDR had two communities with a net book value of $18.3 million, one community with a total of 320 condominiums and a net book value of $19.0 million, one commercial unit with a net book value of $0.4 million, and one parcel of land with a net book value of $4.1 million included in real estate held for disposition. During 2005, UDR sold 22 communities, 240 condominiums from five communities with a total of 648 condominiums, and one parcel of land. We recognized gains for financial reporting purposes of $139.7 million on these sales. In conjunction with the sale of ten communities in July 2005, we received short-term notes for $124.7 million that bear interest at 6.75% and had maturities ranging from September 2005 to July 2006. As of December 31, 2006, all of the notes receivable had matured and had been repaid. We recognized previously deferred gains for financial reporting

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purposes of $6.4 million for the twelve months ended December 31, 2006. During 2004, UDR sold 19 communities, 24 condominiums from a community of 36 condominiums, and one parcel of land. The results of operations for these properties and the interest expense associated with the secured debt on these properties are classified on the Consolidated Statements of Operations in the line item entitled “Income from discontinued operations, net of minority interests.”

The following is a summary of income from discontinued operations for the years ended December 31, (dollars in thousands):

	2006			2005			2004
Rental income	$	42,441		$	80,466		$	136,944
Non-property income/(loss)		5			8			(2	)
		42,446			80,474			136,942
Rental expenses		18,666			35,321			57,866
Real estate depreciation		7,366			18,907			33,495
Interest		(1,102	)		(49	)		1,977
Loss on early debt retirement		—			1,821			—
Other expenses		36			113			258
		24,966			56,113			93,596
Income before net gain on the sale of depreciable property and minority interests		17,480			24,361			43,346
Net gain on the sale of land and depreciable property		148,614			139,724			52,903
Income before minority interests		166,094			164,085			96,249
Minority interests on income from discontinued operations		(10,082	)		(9,648	)		(6,073	)
Income from discontinued operations, net of minority interests	$	156,012		$	154,437		$	90,176

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4.   SECURED DEBT

Secured debt on continuing and discontinued operations of UDR’s real estate portfolio, which encumbers $1.9 billion or 33% of real estate owned based upon book value ($3.9 billion or 67% of UDR’s real estate owned is unencumbered) consists of the following as of December 31, 2006 (dollars in thousands):

					Weighted			Weighted		Number of
	Principal Outstanding				Average			Average		Properties
	December 31,		December 31,		Interest Rate			Years to Maturity		Encumbered
	2006		2005		2006			2006		2006
Fixed Rate Debt
Mortgage notes payable	$	352,159	$	359,281		5.49	%		4.7		15
Tax-exempt secured notes payable		26,070		26,400		5.84	%		18.2		3
Fannie Mae credit facilities		399,362		363,875		6.09	%		4.4		9
Total fixed rate secured debt		777,591		749,556		5.81	%		5.0		27
Variable Rate Debt
Mortgage notes payable		105,089		66,464		6.42	%		4.3		4
Tax-exempt secured note payable		7,770		7,770		3.70	%		21.5		1
Fannie Mae credit facility		292,469		292,469		5.86	%		5.8		46
Total variable rate secured debt		405,328		366,703		5.97	%		5.7		51
Total secured debt	$	1,182,919	$	1,116,259		5.86	%		5.2		78

Fixed Rate Debt

Mortgage notes payable.  Fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from December 2007 through July 2027 and carry interest rates ranging from 4.55% to 8.18%.

Tax-exempt secured notes payable.  Fixed rate mortgage notes payable that secure tax-exempt housing bond issues mature at various dates from May 2008 through March 2031 and carry interest rates ranging from 5.30% to 6.47%. Interest on these notes is generally payable in semi-annual installments.

Secured credit facilities.  At December 31, 2006, UDR’s fixed rate secured credit facilities consisted of $399.4 million of the $691.8 million outstanding on an $860 million aggregate commitment under four revolving secured credit facilities with Fannie Mae. The Fannie Mae credit facilities are for an initial term of ten years, bear interest at floating and fixed rates, and can be extended for an additional five years at our discretion. As of December 31, 2006, the fixed rate Fannie Mae credit facilities had a weighted average fixed rate of interest of 6.09%.

Variable Rate Debt

Mortgage notes payable.  Variable rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from October 2009 through July 2013. As of December 31, 2006, these notes had interest rates ranging from 5.99% to 7.70%.

Tax-exempt secured note payable.  The variable rate mortgage note payable that secures tax-exempt housing bond issues matures in July 2028. As of December 31, 2006, this note had an interest rate of 3.70%. Interest on this note is payable in monthly installments.

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Secured credit facilities.  At December 31, 2006, UDR’s variable rate secured credit facilities consisted of $292.5 million outstanding on the Fannie Mae credit facilities. As of December 31, 2006, the variable rate Fannie Mae credit facilities had a weighted average floating rate of interest of 5.86%.

The aggregate maturities of secured debt for the five years subsequent to December 31, 2006 are as follows (dollars in thousands):

	Fixed						Variable
	Mortgage		Tax-Exempt		Credit		Mortgage		Tax-Exempt		Credit
Year	Notes		Notes		Facilities		Notes		Notes		Facilities		Total
2007	$	81,376	$	345	$	—	$	—	$	—	$	—	$	81,721
2008		4,346		5,135		—		—		—		—		9,481
2009		27,763		245		—		45,403		—		—		73,411
2010		98,027		265		174,362		22,271		—		—		294,925
2011		11,726		280		50,000		—		—		39,513		101,519
Thereafter		128,921		19,800		175,000		37,415		7,770		252,956		621,862
	$	352,159	$	26,070	$	399,362	$	105,089	$	7,770	$	292,469	$	1,182,919

During the first quarter of 2005, we prepaid approximately $110 million of secured debt. In conjunction with these prepayments, we incurred prepayment penalties of $8.5 million in both continuing and discontinued operations as “Loss on early debt retirement.” These penalties were funded by the proceeds from the sale of our technology investment of $12.3 million.

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5.   UNSECURED DEBT

A summary of unsecured debt as of December 31, 2006 and 2005 is as follows (dollars in thousands):

	2006		2005
Commercial Banks
Borrowings outstanding under an unsecured credit facility due May 2008(a)	$	87,200	$	210,800
Senior Unsecured Notes — Other
7.95% Medium-Term Notes due July 2006		—		85,374
7.07% Medium-Term Notes due November 2006		—		25,000
7.25% Notes due January 2007(b)		92,255		92,255
4.30% Medium-Term Notes due July 2007		75,000		75,000
4.50% Medium-Term Notes due March 2008		200,000		200,000
8.50% Monthly Income Notes due November 2008		29,081		29,081
4.25% Medium-Term Notes due January 2009		50,000		50,000
6.50% Notes due June 2009		200,000		200,000
3.90% Medium-Term Notes due March 2010		50,000		50,000
3.625% Convertible Senior Notes due September 2011(c)		250,000		—
5.00% Medium-Term Notes due January 2012		100,000		100,000
6.05% Medium-Term Notes due June 2013		121,345		—
5.13% Medium-Term Notes due January 2014		200,000		200,000
5.25% Medium-Term Notes due January 2015		250,000		250,000
5.25% Medium-Term Notes due January 2016		100,000		100,000
8.50% Debentures due September 2024		54,118		54,118
4.00% Convertible Senior Notes due December 2035(d)		250,000		250,000
Other		167		370
		2,021,966		1,761,198
Unsecured Notes — Other
Verano Construction Loan due February 2006		—		24,820
ABAG Tax-Exempt Bonds due August 2008		46,700		46,700
		46,700		71,520
Total Unsecured Debt	$	2,155,866	$	2,043,518

(a)	UDR has a three-year $500 million unsecured revolving credit facility. The credit facility matures on May 31, 2008, and at UDR’s option, can be extended for an additional year. UDR has the right to increase the credit facility to $750 million under certain circumstances. Based on UDR’s current credit ratings, the credit facility carries an interest rate equal to LIBOR plus a spread of 57.5 basis points. Under a competitive bid feature, and for so long as UDR maintains an Investment Grade Rating, UDR has the right to bid out 100% of the commitment amount.
(b)	In January 2007, this medium-term note matured and was repaid using proceeds from property dispositions.
(c)	At any time on or after July 15, 2011, prior to the close of business on the second business day prior to September 15, 2011, and also following the occurrence of certain events, the notes will be convertible at the option of the holder. Upon conversion of the notes, UDR will deliver cash and common stock, if any,

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based on a daily conversion value calculated on a proportionate basis for each trading day of the relevant 30 trading day observation period. The initial conversion rate for each $1,000 principal amount of notes is 26.6326 shares of our common stock, subject to adjustment under certain circumstances. In connection with the issuance of the 3.625% convertible senior notes, UDR entered into a capped call transaction with respect to its common stock. The convertible note and capped call transactions, both of which expire September 2011, must be net share settled. The maximum number of shares to be issued under the convertible notes is 6.7 million shares, subject to certain adjustment provisions. The capped call transaction combines a purchased call option with a strike price of $37.548 with a written call option with a strike price of $43.806. These transactions have no effect on the terms of the 3.625% convertible senior notes and are intended to reduce the potential dilution upon future conversion of the 3.625% convertible senior notes by effectively increasing the initial conversion price to $43.806 per share, representing a 40% conversion premium. The net cost of $12.6 million of the capped call transaction was included in stockholders’ equity.

(d)

Prior to December 15, 2030, upon the occurrence of specified events, the notes will be convertible at the option of the holder into cash and, in certain circumstances, shares of UDR’s common stock at an initial conversion rate of 35.2988 shares per $1,000 principal amount of notes (which equates to an initial conversion price of approximately $28.33 per share). On or after December 15, 2030, the notes will be convertible at any time prior to the second business day prior to maturity at the option of the holder into cash and, in certain circumstances, shares of UDR’s common stock at the above initial conversion rate. The initial conversion rate is subject to adjustment in certain circumstances.

The following is a summary of short-term bank borrowings under UDR’s bank credit facility at December 31, (dollars in thousands):

	2006			2005			2004
Total revolving credit facilities at December 31	$	500,000		$	500,000		$	500,000
Borrowings outstanding at December 31		87,200			210,800			278,100
Weighted average daily borrowings during the year		264,102			315,487			127,665
Maximum daily borrowings during the year		415,800			440,200			356,500
Weighted average interest rate during the year		5.3	%		3.6	%		2.0	%
Weighted average interest rate at December 31		5.6	%		4.7	%		2.7	%

The aggregate maturities of unsecured debt for the five years subsequent to December 31, 2006 are as follows (dollars in thousands):

	Credit		Unsecured
Year	Facility		Debt		Total
2007	$	—	$	167,265	$	167,265
2008		87,200		275,790		362,990
2009		—		250,009		250,009
2010		—		50,010		50,010
2011		—		250,009		250,009
Thereafter		—		1,075,583		1,075,583
	$	87,200	$	2,068,666	$	2,155,866

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6.   STOCKHOLDERS’ EQUITY

Preferred Stock

The Series B Cumulative Redeemable Preferred Stock has no stated par value and a liquidation preference of $25 per share. The Series B has no voting rights except as required by law. The Series B has no stated maturity and is not subject to any sinking fund or mandatory redemption and is not convertible into any of our other securities. The Series B is not redeemable prior to May 29, 2007. On or after this date, the Series B may be redeemed for cash at our option, in whole or in part, at a redemption price of $25 per share plus accrued and unpaid dividends. The redemption price is payable solely out of the sale proceeds of our other capital stock. All dividends due and payable on the Series B have been accrued or paid as of the end of each fiscal year.

Distributions declared on the Series B in 2006 were $2.15 per share or $0.5375 per quarter. The Series B is listed on the NYSE under the symbol “UDRpb.” At December 31, 2006 and 2005, a total of 5,416,009 shares of the Series B were outstanding.

The Series E Cumulative Convertible Preferred Stock has no stated par value and a liquidation preference of $16.61 per share. Subject to certain adjustments and conditions, each share of the Series E is convertible at any time and from time to time at the holder’s option into one share of our common stock. The holders of the Series E are entitled to vote on an as-converted basis as a single class in combination with the holders of common stock at any meeting of our stockholders for the election of directors or for any other purpose on which the holders of common stock are entitled to vote. The Series E has no stated maturity and is not subject to any sinking fund or any mandatory redemption.

Distributions declared on the Series E in 2006 were $1.33 per share or $0.3322 per quarter. The Series E is not listed on any exchange. At December 31, 2006 and 2005, a total of 2,803,812 shares of the Series E were outstanding.

UDR is authorized to issue up to 20,000,000 shares of our Series F Preferred Stock. The Series F Preferred Stock may be purchased by holders of UDR’s operating partnership units, or OP Units, at a purchase price of $0.0001 per share. OP Unitholders are entitled to subscribe for and purchase one share of UDR’s Series F Preferred Stock for each OP Unit held. At December 31, 2006, a total of 666,293 shares of the Series F Preferred Stock were outstanding at a value of $66.63. As of December 31, 2005, we had not issued any shares of our Series F Preferred Stock. Holders of the Series F Preferred Stock are entitled to one vote for each share of the Series F Preferred Stock they hold, voting together with the holders of our common stock, on each matter submitted to a vote of securityholders at a meeting of our stockholders. The Series F Preferred Stock does not entitle its holders to any other rights, privileges or preferences.

Dividend Reinvestment and Stock Purchase Plan

UDR’s Dividend Reinvestment and Stock Purchase Plan (the “Stock Purchase Plan”) allows common and preferred stockholders the opportunity to purchase, through the reinvestment of cash dividends, additional shares of UDR’s common stock. As of December 31, 2006, 9,893,700 shares of common stock had been issued under the Stock Purchase Plan. Shares in the amount of 15,106,300 were reserved for further issuance under the Stock Purchase Plan as of December 31, 2006. During 2006, 44,691 shares were issued under the Stock Purchase Plan for a total consideration of approximately $1.3 million.

Restricted Stock Awards

UDR’s 1999 Long-Term Incentive Plan (“LTIP”) authorizes the grant of restricted stock awards to employees, officers, consultants, and directors of UDR. Compensation expense is recorded over the vesting period and is based upon the value of the common stock on the date of issuance. For the years ended

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December 31, 2006, 2005 and 2004, we recognized $4.5 million, $3.2 million, and $2.7 million, respectively, of compensation expense related to the amortization of restricted stock. As of December 31, 2006, 1,268,448 shares of restricted stock have been issued under the LTIP.

Shareholder Rights Plan

UDR’s First Amended and Restated Rights Agreement is intended to protect long-term interests of stockholders in the event of an unsolicited, coercive or unfair attempt to take over UDR. The plan authorized a dividend of one Preferred Share Purchase Right (the “Rights”) on each share of common stock outstanding. Each Right, which is not currently exercisable, will entitle the holder to purchase 1/1000 of a share of a new series of UDR’s preferred stock, designated as Series C Junior Participating Cumulative Preferred Stock, at a price to be determined upon the occurrence of the event, and for which the holder must be paid $45 should the takeover occur. Under the Plan, the Rights will be exercisable if a person or group acquires more than 15% of UDR’s common stock or announces a tender offer that would result in the ownership of 15% of UDR’s common stock.

7.   FINANCIAL INSTRUMENTS

The following estimated fair values of financial instruments were determined by UDR using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts UDR would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts. The carrying amounts and estimated fair value of UDR’s financial instruments as of December 31, 2006 and 2005, are summarized as follows (dollars in thousands):

	2006				2005
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Secured debt	$	1,182,919	$	1,178,078	$	1,116,259	$	1,123,108
Unsecured debt		2,155,866		2,056,929		2,043,518		2,032,211

The following methods and assumptions were used by UDR in estimating fair values.

Cash equivalents

The carrying amount of cash equivalents approximates fair value.

Notes receivable

At December 31, 2006, UDR has a promissory note in the principal amount of $1.5 million that is due in February 2016. The note was received in connection with our investment in the development of an online leasing software and bears interest at 10.0%. In July 2006, UDR received a promissory note in the amount of $4.0 million that became due in January 2007. This note was received in connection with a joint venture project and bears interest at 6.8%. The carrying amount of these notes receivable approximate their fair value.

In July 2005, UDR received short-term notes in the principal amount of $124.7 million that bear interest at 6.75% and had maturities ranging from September 2005 to July 2006. The notes were received in conjunction with the sale of ten communities. As of December 31, 2006, all of the notes receivable had matured and had been repaid. We recognized previously deferred gains for financial reporting purposes of $6.4 million during 2006.

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In June 2003, UDR received a promissory note in the principal amount of $5 million that is due October 2011. The note was received in connection with one of our acquisitions and bears interest of 9.0% that is payable in annual installments. The carrying amount of this note receivable approximates its fair value.

Secured and unsecured debt

Estimated fair value is based on mortgage rates, tax-exempt bond rates, and corporate unsecured debt rates believed to be available to UDR for the issuance of debt with similar terms and remaining lives. The carrying amount of UDR’s variable rate secured debt approximates fair value as of December 31, 2006 and 2005. The carrying amounts of UDR’s borrowings under variable rate unsecured debt arrangements, short-term revolving credit agreements, and lines of credit, approximate their fair values as of December 31, 2006 and 2005.

8.   INCOME TAXES

The aggregate cost of our real estate assets for federal income tax purposes was approximately $5.3 billion at December 31, 2006.

The following table reconciles UDR’s net income to REIT taxable income for the three years ended December 31, 2006 (dollars in thousands):

	2006			2005			2004
Net income	$	128,605		$	155,166		$	97,152
Elimination of TRS income		(6,955	)		(17,802	)		(1,120	)
Minority interest		(4,219	)		(1,828	)		(1,950	)
Depreciation and amortization expense		66,754			56,274			46,916
Disposition of properties		47,168			(74,323	)		(10,029	)
Revenue recognition timing differences		(1,249	)		(87	)		(195	)
Investment loss, not deductible for tax		—			—			(593	)
Capitalized interest		1,620			1,720			—
Compensation related differences		(3,264	)		(2,174	)		(3,174	)
Other expense timing differences		173			(706	)		2,102
Net operating loss		(47,522	)		—			—
REIT taxable income before dividends	$	181,111		$	116,240		$	129,109
Dividend paid deduction	$	181,111		$	149,475		$	153,409

For income tax purposes, distributions paid to common stockholders may consist of ordinary income, capital gains, and non-taxable return of capital, or a combination thereof. Distributions that exceed our current and accumulated earnings and profits constitute a return of capital rather than taxable income and reduce the stockholder’s basis in their common shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the stockholder’s basis in the common shares, it generally will be treated

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as a gain from the sale or exchange of that stockholder’s common shares. For the three years ended December 31, 2006, distributions paid per common share were taxable as follows:

	2006		2005		2004
Ordinary income	$	0.48	$	0.63	$	0.76
Long-term capital gain		0.46		0.22		0.20
Unrecaptured section 1250 gain		0.30		0.13		0.08
Return of capital		—		0.21		0.12
	$	1.24	$	1.19	$	1.16

We have taxable REIT subsidiaries that are subject to state and federal income taxes. Income tax expense consists of the following for the three years ended December 31, 2006, and is included in gains on the sales (dollars in thousands):

	2006			2005		2004
Income tax expense/(benefit)
Current	$	5,533		$	11,090	$	867
Deferred		(680	)		313		—
Total income tax expense	$	4,853		$	11,403	$	867

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to pretax income for the three years ended December 31, 2006, as follows (dollars in thousands):

	2006			2005		2004
Income tax expense/(benefit)
Computed tax expense	$	4,134		$	10,193	$	675
Permanent book/tax difference		(99	)		—		—
State income tax (net of federal benefit) and other		818			1,210		192
Total income tax expense	$	4,853		$	11,403	$	867

Deferred income taxes reflect the estimated net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts for income

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tax purposes. Our taxable REIT subsidiary’s deferred tax assets and liabilities are as follows for the three years ended December 31, 2006 (dollars in thousands):

	2006			2005			2004
Deferred tax assets:
Depreciation	$	550		$	—		$	—
Capitalized interest		159			—			—
Pre-paid rent		84			19			—
Warranty expense		11			—			—
Total deferred tax assets		804			19			—
Deferred tax liabilities:
Depreciation		—			(17	)		—
Interest		(437	)		(315	)		—
Total deferred tax liabilities		(437	)		(332	)		—
Net deferred tax asset/(liability)	$	367		$	(313	)	$	—

9.   EMPLOYEE BENEFIT PLANS

Profit Sharing Plan

Our Profit Sharing Plan (the “Plan”) is a defined contribution plan covering all eligible full-time employees. Under the Plan, UDR makes discretionary profit sharing and matching contributions to the Plan as determined by the Compensation Committee of the Board of Directors. Aggregate provisions for contributions, both matching and discretionary, which are included in UDR’s Consolidated Statements of Operations for the three years ended December 31, 2006, 2005, and 2004 were $0.7 million, $0.6 million, and $0.6 million, respectively.

Stock Option Plan

In May 2001, the stockholders of UDR approved the 1999 Long-Term Incentive Plan (the “LTIP”), which supersedes the 1985 Stock Option Plan. With the approval of the LTIP, no additional grants will be made under the 1985 Stock Option Plan. The LTIP authorizes the granting of awards which may take the form of options to purchase shares of common stock, stock appreciation rights, restricted stock, dividend equivalents, other stock-based awards, and any other right or interest relating to common stock or cash. The Board of Directors reserved 4 million shares for issuance upon the grant or exercise of awards under the LTIP. The LTIP generally provides, among other things, that options are granted at exercise prices not lower than the market value of the shares on the date of grant and that options granted must be exercised within ten years. The maximum number of shares of stock that may be issued subject to incentive stock options is 4 million shares. Shares under options that expire or are cancelable are available for subsequent grant.

UDR adopted the fair-value-based method of accounting for share-based payments effective January 1, 2004, using the prospective method described in FASB Statement No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” UDR adopted Statement 123(R) on January 1, 2006, and has continued to use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees, which have not been granted since 2002. Statement 123(R) must be applied not only to new awards but to previously granted awards that are not fully vested on the effective date (as of January 1, 2006, there were no unvested stock options). UDR adopted Statement 123 using the modified prospective transition method (which applied only to awards granted, modified or settled after the adoption date). The adoption of

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the provisions of Statement 123(R) did not have a material impact on our financial position, results of operations, or cash flows.

A summary of UDR’s stock option activity during the three years ended December 31, 2006, is provided in the following table:

	Number			Weighted Average		Range of
	Outstanding			Exercise Price		Exercise Prices
Balance, December 31, 2003		2,536,187		$	11.88	$	9.63	—	$	15.38
Granted		—			—					—
Exercised		(562,064	)		11.90		9.63	—		15.25
Forfeited		(13,500	)		12.02		10.88	—		13.96
Balance, December 31, 2004		1,960,623			11.88		9.63	—		15.38
Granted		—			—					—
Exercised		(298,566	)		12.02		9.88	—		14.63
Forfeited		(19,834	)		13.80		9.88	—		15.25
Balance, December 31, 2005		1,642,223			11.84		9.63	—		15.38
Granted		—			—					—
Exercised		(315,333	)		13.52		9.63	—		15.38
Forfeited		(27,500	)		11.47		9.63	—		14.63
Balance, December 31, 2006		1,299,390			11.44		9.63	—		15.38
Exercisable at December 31, 2004		1,938,343		$	11.84	$	9.63	—	$	15.38
2005		1,635,666			11.82		9.63	—		15.38
2006		1,299,390			11.44		9.63	—		15.38

The weighted average remaining contractual life on all options outstanding is 3.7 years. 578,110 of share options had exercise prices between $9.63 and $10.88, 527,296 of share options had exercise prices between $11.15 and $12.23, and 193,984 of share options had exercise prices between $13.94 and $15.38.

As of December 31, 2006 and 2005, stock-based awards for 2,286,091 and 2,583,586 shares of common stock, respectively, were available for future grants under the 1999 LTIP’s existing authorization.

10.   COMMITMENTS AND CONTINGENCIES

Commitments

Real Estate Under Development

UDR is committed to completing its wholly owned real estate currently under development, which has an estimated cost to complete of $52.6 million as of December 31, 2006.

UDR is committed to completing its development joint venture projects, which have an estimated cost to complete of $235.5 million at December 31, 2006.

UDR has entered into three contracts to purchase apartment communities upon their development completion. Provided that the developer meets certain conditions, UDR will purchase these communities for approximately $105.0 million.

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Land and Other Leases

UDR is party to several ground leases relating to operating communities. In addition, UDR is party to various other operating leases related to the operation of its regional offices and equipment. Future minimum lease payments for non-cancelable land and other leases as of December 31, 2006 are as follows (dollars in thousands):

	Ground		Operating
	Leases		Leases
2007	$	1,151	$	1,619
2008		1,151		1,573
2009		1,154		1,582
2010		1,154		1,065
2011		1,154		308
Thereafter		20,971		—
	$	26,735	$	6,147

UDR incurred $2.8 million, $2.4 million and $1.9 million of rent expense for the years ended December 31, 2006, 2005, and 2004.

Contingencies

Series C Out-Performance Program

In May 2005, the stockholders of UDR approved a new Out-Performance Program and the first series of new Out-Performance Partnership Shares under the program are the Series C Out-Performance Units (the “Series C Program”) pursuant to which certain executive officers and other key employees of UDR (the “Series C Participants”) were given the opportunity to purchase interests in UDR Out-Performance III, LLC, a Delaware limited liability company (the “Series C LLC”), the only asset of which is a special class of partnership units of the Operating Partnership (“Series C Out-Performance Partnership Shares” or “Series C OPPSs”) . The purchase price for the Series C OPPSs was determined by the Compensation Committee of UDR’s board of directors to be $750,000, assuming 100% participation, and was based upon the advice of an independent valuation expert. UDR’s performance for the Series C Program will be measured over the 36-month period from June 1, 2005 to May 30, 2008.

The Series C Program is designed to provide participants with the possibility of substantial returns on their investment if the cumulative total return on UDR’s common stock, as measured by the cumulative amount of dividends paid plus share price appreciation during the measurement period is at least the equivalent of a 36% total return, or 12% annualized (“Minimum Return”).

At the conclusion of the measurement period, if UDR’s cumulative total return satisfies these criteria, the Series C LLC as holder of the Series C OPPSs will receive (for the indirect benefit of the Series C Participants as holders of interests in the Series C LLC) distributions and allocations of income and loss from the Operating Partnership equal to the distributions and allocations that would be received on the number of OP Units obtained by:

i. determining the amount by which the cumulative total return of UDR’s common stock over the measurement period exceeds the Minimum Return (such excess being the “Excess Return”);

ii. multiplying 2% of the Excess Return by UDR’s market capitalization (defined as the average number of shares outstanding over the 36-month period, including common stock, common stock equivalents and OP Units); and

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iii. dividing the number obtained in clause (ii) by the market value of one share of UDR’s common stock on the valuation date, computed as the volume-weighted average price per day of common stock for the 20 trading days immediately preceding the valuation date.

For the Series C OPPSs, the number determined pursuant to (ii) above is capped at 1% of market capitalization.

If, on the valuation date, the cumulative total return of UDR’s common stock does not meet the Minimum Return, then the Series C Participants will forfeit their entire initial investment.

Based on the results through December 31, 2006, 313,145 Series C OPPSs would have been issued had the Program terminated on that date. However, since the ultimate determination of Series C OPPSs to be issued will not occur until May 30, 2008, and the number of Series C OPPSs is determinable only upon future events, the financial statements do not reflect any impact for these events. Accordingly, the contingently issuable Series C OPPSs will only be included in basic earnings per share after the measurement period has ended and the applicable hurdle has been met. Furthermore, the Series C OPPSs will only be included in common stock and common stock equivalents in the calculation of diluted earnings per share after the measurement period has ended and the hurdle has been met at the end of the reporting period (if any), assuming the measurement period ended at the end of the reporting period.

Series D Out-Performance Program

In February 2006, the board of directors of UDR approved the Series D Out-Performance Program (the “Series D Program”) pursuant to which certain executive officers and other key employees of UDR (the “Series D Participants”) were given the opportunity to purchase interests in UDR Out-Performance IV, LLC, a Delaware limited liability company (the “Series D LLC”), the only asset of which is a special class of partnership units of the Operating Partnership (“Series D Out-Performance Partnership Shares” or “Series D OPPSs”) . The Series D Program is part of the New Out-Performance Program approved by UDR’s stockholders in May 2005. The Series D LLC has agreed to sell 830,000 membership units to members of UDR’s senior management at a price of $1.00 per unit. The aggregate purchase price of $830,000 for the Series D OPPSs, assuming 100% participation, is based upon the advice of an independent valuation expert. The Series D Program will measure the cumulative total return on our common stock over the 36-month period beginning January 1, 2006 and ending December 31, 2008.

The Series D Program is designed to provide participants with the possibility of substantial returns on their investment if the cumulative total return on UDR’s common stock, as measured by the cumulative amount of dividends paid plus share price appreciation during the measurement period is at least the equivalent of a 36% total return, or 12% annualized (“Minimum Return”).

At the conclusion of the measurement period, if UDR’s cumulative total return satisfies these criteria, the Series D LLC as holder of the Series D OPPSs will receive (for the indirect benefit of the Series D Participants as holders of interests in the Series D LLC) distributions and allocations of income and loss from the Operating Partnership equal to the distributions and allocations that would be received on the number of OP Units obtained by:

i. determining the amount by which the cumulative total return of UDR’s common stock over the measurement period exceeds the Minimum Return (such excess being the “Excess Return”);

ii. multiplying 2% of the Excess Return by UDR’s market capitalization (defined as the average number of shares outstanding over the 36-month period, including common stock, OP Units, common stock equivalents and OP Units); and

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iii. dividing the number obtained in (ii) by the market value of one share of UDR’s common stock on the valuation date, computed as the volume-weighted average price per day of the common stock for the 20 trading days immediately preceding the valuation date.

For the Series D OPPSs, the number determined pursuant to clause (ii) above is capped at 1% of market capitalization.

If, on the valuation date, the cumulative total return of UDR’s common stock does not meet the Minimum Return, then the Series D Participants will forfeit their entire initial investment.

Based on the results through December 31, 2006, 75,869 Series D OPPSs would have been issued had the Program terminated on that date. However, since the ultimate determination of Series D OPPSs to be issued will not occur until December 31, 2008, and the number of Series D OPPSs is determinable only upon future events, the financial statements do not reflect any impact for these events. Accordingly, the contingently issuable Series D OPPSs will only be included in basic earnings per share after the measurement period has ended and the applicable hurdle has been met. Furthermore, the Series D OPPSs will only be included in common stock and common stock equivalents in the calculation of diluted earnings per share after the measurement period has ended and the hurdle has been met at the end of the reporting period (if any), assuming the measurement period ended at the end of the reporting period.

Litigation and Legal Matters

UDR is subject to various legal proceedings and claims arising in the ordinary course of business. UDR cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. UDR believes that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flow.

11.   INDUSTRY SEGMENTS

UDR owns and operates multifamily apartment communities throughout the United States that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. UDR separately evaluates the performance of each of its apartment communities. However, because each of the apartment communities has similar economic characteristics, facilities, services, and tenants, the apartment communities have been aggregated into a single apartment communities segment. All segment disclosure is included in or can be derived from UDR’s consolidated financial statements.

There are no tenants that contributed 10% or more of UDR’s total revenues during 2006, 2005, or 2004.

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12.   UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY FINANCIAL DATA

Summarized consolidated quarterly financial data for the year ended December 31, 2006, with restated amounts that reflect discontinued operations as of December 31, 2006, is as follows (dollars in thousands, except per share amounts):

	Three Months Ended
	Previously						Previously						Previously
	Reported			Restated			Reported			Restated			Reported			Restated
	March 31			March 31			June 30			June 30			September 30			September 30			December 31
Rental income(a)	$	176,810		$	166,432		$	174,257		$	169,955		$	177,634		$	177,329		$	180,757
Loss before minority interests and discontinued operations		(3,804	)		(7,193	)		(4,449	)		(6,120	)		(7,281	)		(7,434	)		(9,279	)
Gain on sale of land and depreciable property		15,347			15,347			33,482			33,482			65,669			65,669			34,116
Income from discontinued operations, net of minority interests		15,359			18,550			36,163			37,748			65,893			66,060			33,654
Net income available to common stockholders		8,165			8,165			28,342			28,342			55,510			55,510			21,218
Earnings per common share:
Basic	$	0.06		$	0.06		$	0.21		$	0.21		$	0.42		$	0.42		$	0.16
Diluted		0.06			0.06			0.21			0.21			0.42			0.42			0.16

(a) Represents rental income from continuing operations.

Summarized consolidated quarterly financial data for the year ended December 31, 2005, with restated amounts that reflect discontinued operations as of December 31, 2006, is as follows (dollars in thousands, except per share amounts):

	Three Months Ended
	Previously				Previously				Previously						Previously
	Reported		Restated		Reported		Restated		Reported			Restated			Reported		Restated
	March 31		March 31		June 30		June 30		September 30			September 30			December 31		December 31
Rental income(a)	$	148,575	$	148,552	$	153,507	$	153,466	$	157,715		$	157,683		$	162,234	$	162,203
Income/(loss) before minority interests and discontinued operations		1,490		1,427		436		322		(1,363	)		(1,435	)		1,447		(395	)
Gain on sale of depreciable property		7,023		7,023		46,781		46,781		12,851			12,851			73,069		73,069
Income from discontinued operations, net of minority interests		13,365		13,424		51,850		51,957		16,154			16,224			71,100		72,832
Net income available to common stockholders		11,099		11,099		48,599		48,599		11,292			11,292			68,806		68,806
Earnings per common share:
Basic	$	0.08	$	0.08	$	0.36	$	0.36	$	0.08		$	0.08		$	0.51	$	0.51
Diluted		0.08		0.08		0.36		0.36		0.08			0.08			0.51		0.51

(a) Represents rental income from continuing operations.

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SCHEDULE III — REAL ESTATE OWNED

FOR THE YEAR ENDED DECEMBER 31, 2006

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
WESTERN REGION
Harbor at Mesa Verde	$	—	$	20,476,466	$	28,537,805	$	49,014,271	$	7,898,037	$	20,493,875	$	36,418,434	$	56,912,308	$	7,521,490	1965	06/12/03
Pine Brook Village		18,270,000		2,581,763		25,504,086		28,085,849		3,840,197		3,812,777		28,113,269		31,926,046		5,694,666	1979	06/12/03
Pacific Shores		19,145,000		7,345,226		22,623,676		29,968,902		5,763,978		7,347,018		28,385,862		35,732,880		5,581,412	1971	06/12/03
Huntington Vista		—		8,055,452		22,485,746		30,541,198		3,736,930		8,073,730		26,204,398		34,278,128		5,299,661	1970	06/12/03
Pacific Palms		—		12,285,059		6,236,783		18,521,843		1,059,650		12,364,081		7,217,412		19,581,493		1,668,641	1962	07/31/03
Missions at Back Bay		—		229,270		14,128,763		14,358,033		492,828		10,618,842		4,232,020		14,850,861		837,406	1969	12/16/03
Coronado at Newport — North		54,532,170		62,515,901		46,082,056		108,597,957		6,900,069		62,543,888		52,954,139		115,498,026		6,926,335	1968	10/28/04
Huntington Villas		—		61,535,270		18,017,201		79,552,471		1,964,805		61,553,308		19,963,968		81,517,276		2,948,686	1972	09/30/04
Villa Venetia		—		70,825,106		24,179,600		95,004,706		2,739,272		70,837,402		26,906,575		97,743,977		3,719,872	1972	10/28/04
Vista Del Rey		—		10,670,493		7,079,834		17,750,327		694,513		10,673,012		7,771,827		18,444,840		1,102,112	1969	09/30/04
Foxborough		—		12,070,601		6,186,721		18,257,322		987,236		12,083,292		7,161,266		19,244,558		1,023,741	1969	09/30/04
Coronado South		—		58,784,785		50,066,757		108,851,542		3,141,813		58,806,208		53,187,147		111,993,355		5,706,733	1970	03/31/05
The Arboretum		22,307,984		29,562,468		14,283,292		43,845,760		2,890,338		29,597,246		17,138,852		46,736,098		2,322,134	1970	10/28/04
ORANGE COUNTY, CA		114,255,154		356,937,860		285,412,320		642,350,180		42,109,666		368,804,677		315,655,169		684,459,846		50,352,889
2000 Post Street		—		9,860,627		44,577,506		54,438,133		2,854,200		10,040,340		47,251,993		57,292,333		10,241,644	1987	12/07/98
Birch Creek		7,539,128		4,365,315		16,695,509		21,060,824		3,786,621		4,712,807		20,134,638		24,847,445		6,042,586	1968	12/07/98
Highlands of Marin		—		5,995,838		24,868,350		30,864,188		2,604,763		6,163,618		27,305,332		33,468,951		6,873,751	1991	12/07/98
Marina Playa		12,105,709		6,224,383		23,916,283		30,140,666		4,504,014		6,519,309		28,125,371		34,644,680		8,492,079	1971	12/07/98
Crossroads Apartments		—		4,811,488		10,169,520		14,981,008		1,174,160		4,872,226		11,282,941		16,155,167		1,680,557	1986	07/28/04
River Terrace		—		22,161,247		40,137,141		62,298,388		504,613		22,162,242		40,640,759		62,803,001		3,442,358	2005	08/01/05
Lake Pines		—		14,031,365		30,536,982		44,568,346		938,762		14,031,365		31,475,744		45,507,108		2,005,839	1972	11/29/05
Bay Terrace		—		8,544,559		14,457,992		23,002,551		419,043		8,544,559		14,877,035		23,421,594		1,082,437	1962	10/07/05
Mill Creek		—		48,202,012		41,608,035		89,810,047		721,547		19,115,710		71,415,884		90,531,594		2,206,269	2006	06/21/06
Canyon Oaks		—		21,743,510		34,311,742		56,055,252		632,385		11,983,437		44,704,199		56,687,636		1,382,273	2005	06/21/06
SAN FRANCISCO, CA		19,644,837		145,940,343		281,279,059		427,219,403		18,140,106		108,145,613		337,213,896		445,359,509		43,449,793
The Crest		59,634,693		21,953,480		67,808,654		89,762,134		4,477,221		21,956,364		72,282,990		94,239,354		9,548,287	1989	09/30/04
Rosebeach		—		8,414,478		17,449,593		25,864,072		687,590		8,422,028		18,129,634		26,551,661		2,460,100	1970	09/30/04
The Villas at San Dimas		13,055,042		8,180,619		16,735,364		24,915,983		905,412		8,181,107		17,640,288		25,821,395		2,312,119	1981	10/28/04
The Villas at Bonita		8,305,381		4,498,439		11,699,117		16,197,556		356,713		4,499,424		12,054,845		16,554,268		1,595,089	1981	10/28/04
Ocean Villa		9,726,936		5,134,982		12,788,885		17,923,867		477,275		5,134,982		13,266,160		18,401,142		1,705,851	1965	10/28/04
Pine Avenue DCO		—		5,805,234		6,305,030		12,110,264		3,609,014		5,805,499		9,913,779		15,719,278		3,669,273	1987	08/28/06

75

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized			Gross Amount at
			Initial Costs				Total		Subsequent			Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition			Land and		Buildings		Total
			Land		and		Acquisition		(Net of			Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)			Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
LOS ANGELES, CA		90,722,051		53,987,232		132,786,643		186,773,875		10,513,224			53,999,403		143,287,696		197,287,099		21,290,719
Presidio at Rancho Del Oro		13,325,000		9,163,939		22,694,492		31,858,431		2,502,405			9,303,196		25,057,640		34,360,836		3,891,997	1987	06/25/04
Villas at Carlsbad		9,284,568		6,516,636		10,717,601		17,234,237		671,327			6,558,856		11,346,708		17,905,564		1,464,906	1966	10/28/04
Summit at Mission Bay		—		22,598,529		17,181,401		39,779,930		1,782,975			22,598,529		18,964,377		41,562,905		2,622,184	1953	11/01/04
Rancho Vallecitos		16,566,301		3,302,967		10,877,286		14,180,253		2,601,972			3,529,902		13,252,324		16,782,225		6,058,377	1988	10/13/99
Milazzo		—		15,920,401		35,577,599		51,498,000		768,629			15,920,401		36,346,228		52,266,629		1,396,695	1986	05/04/06
SAN DIEGO, CA		39,175,869		57,502,471		97,048,379		154,550,850		8,327,310			57,910,883		104,967,277		162,878,160		15,434,159
Verano at Town Square		—		13,557,235		3,645,406		17,202,641		50,769,275			22,844,185		45,127,731		67,971,916		3,155,283	2006	10/18/02
Windemere at Sycamore Highland		13,394,266		5,809,490		23,450,119		29,259,609		581,529			5,821,751		24,019,386		29,841,138		6,011,635	2001	11/21/02
Waterstone at Murrieta		—		10,597,865		34,702,760		45,300,625		2,426,382			10,633,799		37,093,208		47,727,007		4,956,576	1990	11/02/04
INLAND EMPIRE, CA		13,394,266		29,964,590		61,798,285		91,762,875		53,777,185			39,299,735		106,240,324		145,540,060		14,123,494
Boronda Manor		—		1,946,423		8,981,742		10,928,165		7,140,580			3,034,759		15,033,985		18,068,745		3,479,046	1979	12/07/98
Garden Court		—		888,038		4,187,950		5,075,988		3,572,799			1,422,217		7,226,571		8,648,787		1,719,856	1973	12/07/98
Cambridge Court		—		3,038,877		12,883,312		15,922,189		11,217,829			4,765,177		22,374,842		27,140,018		5,341,081	1974	12/07/98
Laurel Tree		—		1,303,902		5,115,356		6,419,258		4,522,311			2,003,855		8,937,714		10,941,569		2,120,975	1977	12/07/98
The Pointe at Harden Ranch		—		6,388,446		23,853,534		30,241,980		20,572,446			9,551,463		41,262,963		50,814,426		9,068,255	1986	12/07/98
The Pointe at Northridge		—		2,043,736		8,028,443		10,072,179		7,490,799			3,122,621		14,440,357		17,562,978		3,244,458	1979	12/07/98
The Pointe at Westlake		—		1,329,064		5,334,004		6,663,068		4,293,083			2,030,141		8,926,009		10,956,151		2,090,268	1975	12/07/98
MONTEREY PENINSULA, CA		—		16,938,486		68,384,341		85,322,827		58,809,846			25,930,232		118,202,441		144,132,673		27,063,939
Arbor Terrace		13,813,876		1,453,342		11,994,972		13,448,314		1,711,634			1,630,050		13,529,898		15,159,948		4,539,824	1996	03/27/98
Aspen Creek		—		1,177,714		9,115,789		10,293,503		956,344			1,350,100		9,899,748		11,249,847		2,845,033	1996	12/07/98
Crowne Pointe		10,142,815		2,486,252		6,437,256		8,923,508		2,570,696			2,611,640		8,882,564		11,494,204		2,914,212	1987	12/07/98
Hilltop		7,838,700		2,173,969		7,407,628		9,581,597		1,612,026			2,358,563		8,835,061		11,193,623		2,665,205	1985	12/07/98
The Hawthorne		26,825,490		6,473,970		30,226,079		36,700,049		645,782			6,475,086		30,870,745		37,345,831		2,709,656	2003	07/21/05
The Kennedy Building		—		6,178,440		22,306,568		28,485,008		(53,953	)		6,183,441		22,247,614		28,431,055		1,485,189	2005	11/10/05
SEATTLE, WA		58,620,881		19,943,687		87,488,292		107,431,979		7,442,529			20,608,880		94,265,628		114,874,508		17,159,119
Lancaster Commons		10,009,532		2,485,291		7,451,165		9,936,456		997,021			2,585,754		8,347,722		10,933,477		2,681,293	1992	12/07/98
Tualatin Heights		10,566,509		3,272,585		9,134,089		12,406,674		2,301,184			3,473,991		11,233,867		14,707,858		3,477,800	1989	12/07/98
Evergreen Park		—		3,878,138		9,973,051		13,851,189		2,162,074			4,151,437		11,861,826		16,013,263		3,848,761	1988	03/27/98
Andover Park		—		2,916,576		16,994,580		19,911,155		2,369,972			2,952,315		19,328,812		22,281,127		2,623,760	1989	09/30/04
Hunt Club		—		6,014,006		14,870,326		20,884,332		1,450,712			6,049,453		16,285,591		22,335,045		2,280,505	1985	09/30/04
PORTLAND, OR		20,576,041		18,566,596		58,423,211		76,989,807		9,280,963			19,212,951		67,057,819		86,270,770		14,912,118
Foothills Tennis Village		12,745,224		3,617,507		14,542,028		18,159,535		4,394,929			3,808,718		18,745,746		22,554,464		5,525,120	1988	12/07/98
Woodlake Village		33,091,932		6,772,438		26,966,750		33,739,188		8,269,271			7,299,491		34,708,967		42,008,459		10,479,355	1979	12/07/98

76

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
SACRAMENTO, CA		45,837,156		10,389,945		41,508,778		51,898,723		12,664,199		11,108,209		53,454,713		64,562,922		16,004,475
TOTAL WESTERN REGION		402,226,256		710,171,211		1,114,129,307		1,824,300,518		221,065,029		705,020,584		1,340,344,964		2,045,365,547		219,790,705
MID-ATLANTIC REGION
Dominion Middle Ridge		17,769,407		3,311,468		13,283,047		16,594,515		4,424,806		3,545,478		17,473,843		21,019,321		6,624,372	1990	06/25/96
Dominion Lake Ridge		12,921,808		2,366,061		8,386,439		10,752,500		3,795,102		2,621,422		11,926,180		14,547,602		4,665,266	1987	02/23/96
Presidential Greens		—		11,237,698		18,789,985		30,027,683		4,990,579		11,392,551		23,625,710		35,018,262		6,412,497	1938	05/15/02
Taylor Place		—		6,417,889		13,411,278		19,829,167		5,315,499		6,604,751		18,539,915		25,144,666		5,440,727	1962	04/17/02
Ridgewood		—		5,612,147		20,085,474		25,697,621		4,500,980		5,716,396		24,482,205		30,198,601		6,627,006	1988	08/26/02
The Calvert		—		262,807		11,188,623		11,451,430		3,566,136		2,349,837		12,667,728		15,017,566		2,673,577	1962	11/26/03
Commons at Town Square		—		135,780		7,723,647		7,859,427		664,623		6,865,580		1,658,470		8,524,050		381,593	1971	12/03/03
Waterside Towers		—		873,713		38,209,345		39,083,059		4,069,116		26,079,836		17,072,338		43,152,174		3,493,706	1971	12/03/03
Waterside Townhomes		—		129,000		3,723,896		3,852,896		344,481		2,724,788		1,472,589		4,197,377		286,986	1971	12/03/03
Wellington Place at Olde Town		—		13,753,346		36,059,193		49,812,539		2,638,247		13,757,766		38,693,020		52,450,786		3,057,445	1987	09/13/05
METROPOLITAN DC		30,691,215		44,099,910		170,860,927		214,960,836		34,309,568		81,658,405		167,612,000		249,270,405		39,663,175
Dominion on Spring Forest		—		1,257,500		8,586,255		9,843,755		6,279,928		1,900,016		14,223,667		16,123,683		8,837,637	1978/81	05/21/91
Remington on the Green		—		500,000		4,321,872		4,821,872		6,887,089		1,097,199		10,611,762		11,708,961		4,351,996	1987	09/27/91
Dominion on Lake Lynn		12,134,000		3,622,103		12,405,020		16,027,123		6,760,428		4,455,793		18,331,758		22,787,551		8,621,100	1986	12/01/92
Dominion Courtney Place		—		1,114,600		5,119,259		6,233,859		5,146,862		1,542,802		9,837,919		11,380,721		5,500,214	1979/81	07/08/93
Dominion Walnut Ridge		9,589,520		1,791,215		11,968,852		13,760,067		5,050,410		2,335,562		16,474,915		18,810,477		7,511,249	1982/84	03/04/94
Dominion Walnut Creek		15,153,866		3,170,290		21,717,407		24,887,697		7,554,723		3,834,317		28,608,102		32,442,420		13,042,915	1985/86	05/17/94
Dominion Ramsgate		—		907,605		6,819,154		7,726,759		2,386,160		1,091,589		9,021,330		10,112,919		3,612,372	1988	08/15/96
Copper Mill		—		1,548,280		16,066,720		17,615,000		2,628,922		1,997,913		18,246,010		20,243,922		6,245,825	1997	12/31/96
Trinity Park		12,258,453		4,579,648		17,575,712		22,155,360		3,575,763		4,736,740		20,994,383		25,731,123		7,172,677	1987	02/28/97
Meadows at Kildaire		18,923,619		2,846,027		20,768,425		23,614,452		2,644,303		6,951,720		19,307,035		26,258,755		8,369,917	2000	05/25/00
Oaks at Weston		—		9,943,644		23,305,862		33,249,506		1,096,793		10,230,376		24,115,923		34,346,299		7,233,394	2001	06/28/02

77

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
RALEIGH, NC		68,059,458		31,280,912		148,654,538		179,935,450		50,011,382		40,174,028		189,772,804		229,946,832		80,499,294
Gatewater Landing		—		2,078,422		6,084,526		8,162,948		5,503,663		2,365,699		11,300,912		13,666,611		5,135,261	1970	12/16/92
Dominion Kings Place		—		1,564,942		7,006,574		8,571,516		2,495,532		1,675,898		9,391,151		11,067,048		4,342,446	1983	12/29/92
Dominion at Eden Brook		—		2,361,167		9,384,171		11,745,338		4,125,433		2,860,319		13,010,452		15,870,771		6,087,016	1984	12/29/92
Dominion Great Oaks		13,285,808		2,919,481		9,099,691		12,019,172		6,347,260		4,378,480		13,987,952		18,366,432		7,207,697	1974	07/01/94
Dominion Constant Friendship		—		903,122		4,668,956		5,572,078		1,952,758		1,089,062		6,435,774		7,524,836		2,757,593	1990	05/04/95
Lakeside Mill		—		2,665,869		10,109,175		12,775,044		1,957,319		2,717,825		12,014,538		14,732,363		5,455,022	1989	12/10/99
Tamar Meadow		—		4,144,926		17,149,514		21,294,440		2,619,873		4,422,508		19,491,805		23,914,313		4,967,216	1990	11/22/02
Calvert’s Walk		—		4,408,192		24,692,115		29,100,307		2,428,939		4,460,681		27,068,565		31,529,246		4,574,291	1988	03/30/04
Arborview		—		4,653,393		23,951,828		28,605,221		2,495,009		4,705,817		26,394,413		31,100,230		4,548,583	1992	03/30/04
Liriope		—		1,620,382		6,790,681		8,411,063		241,462		1,623,363		7,029,162		8,652,525		1,201,701	1997	03/30/04
BALTIMORE, MD		13,285,808		27,319,896		118,937,230		146,257,126		30,167,247		30,299,651		146,124,723		176,424,374		46,276,827
Dominion Olde West		—		1,965,097		12,203,965		14,169,062		6,727,029		2,511,753		18,384,338		20,896,091		10,389,533	1978/82/84/85/87	12/31/84 & 08/27/91
Dominion Creekwood		—		—		—		—		4,413,974		115,152		4,298,822		4,413,974		1,444,380	1984	08/27/91
Dominion Laurel Springs		—		464,480		3,119,716		3,584,196		4,231,864		806,530		7,009,530		7,816,060		3,435,508	1972	09/06/91
Dominion English Hills		—		1,979,174		11,524,313		13,503,487		8,223,926		2,873,091		18,854,322		21,727,413		11,134,039	1969/76	12/06/91
Dominion Gayton Crossing		10,063,000		825,760		5,147,968		5,973,728		8,350,375		1,469,022		12,855,080		14,324,103		8,185,363	1973	09/28/95
Dominion West End		16,896,683		2,059,252		15,049,088		17,108,340		6,878,137		2,899,915		21,086,563		23,986,477		8,870,459	1989	12/28/95
Courthouse Green		7,865,616		732,050		4,702,353		5,434,403		4,549,374		1,208,329		8,775,448		9,983,777		5,620,384	1974/78	12/31/84
Waterside at Ironbridge		11,297,000		1,843,819		13,238,590		15,082,409		3,047,486		2,087,051		16,042,844		18,129,895		5,208,493	1987	09/30/97
Carriage Homes at Wyndham		—		473,695		30,996,525		31,470,220		1,684,853		3,662,747		29,492,326		33,155,073		5,539,480	1998	11/25/03
Legacy at Mayland		15,409,295		—		—		—		20,263,426		1,496,149		18,767,277		20,263,426		2,704,133
RICHMOND, VA		61,531,594		10,343,327		95,982,518		106,325,845		68,370,445		19,129,740		155,566,550		174,696,290		62,531,772
Cape Harbor		—		1,891,671		18,113,109		20,004,780		3,359,257		2,341,503		21,022,534		23,364,037		7,907,042	1996	08/15/96
Mill Creek		—		1,404,498		4,489,398		5,893,896		15,734,895		2,026,791		19,602,000		21,628,791		7,985,208	1986/98	09/30/91
The Creek		—		417,500		2,506,206		2,923,706		3,428,950		586,069		5,766,587		6,352,656		3,338,217	1973	06/30/92
Forest Hills		—		1,028,000		5,420,478		6,448,478		6,066,265		1,242,984		11,271,759		12,514,743		5,360,176	1964/69	06/30/92
Clear Run		—		874,830		8,740,602		9,615,432		7,687,478		1,366,934		15,935,977		17,302,910		6,915,558	1987/89	07/22/94
Crosswinds		—		1,096,196		18,230,236		19,326,432		3,403,481		1,242,642		21,487,271		22,729,913		7,529,214	1990	02/28/97

78

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
WILMINGTON, NC		—		6,712,695		57,500,029		64,212,724		39,680,326		8,806,923		95,086,127		103,893,050		39,035,414
Dominion Harris Pond		—		886,788		6,728,097		7,614,885		2,995,445		1,322,977		9,287,353		10,610,330		4,165,275	1987	07/01/94
Dominion Mallard Creek		—		698,860		6,488,061		7,186,921		2,431,204		748,028		8,870,096		9,618,125		3,454,888	1989	08/16/94
Dominion at Sharon		—		667,368		4,856,103		5,523,471		2,178,737		1,009,817		6,692,391		7,702,208		2,834,563	1984	08/15/96
Providence Court		—		—		22,047,803		22,047,803		14,447,925		7,696,924		28,798,804		36,495,728		10,570,680	1997	09/30/97
Dominion Crossing		—		1,666,312		4,774,020		6,440,332		1,467,959		1,685,696		6,222,595		7,908,292		932,379	1985	08/31/04
Dominion Norcroft		—		1,968,664		13,051,238		15,019,902		1,330,002		2,018,804		14,331,099		16,349,904		2,122,702	1991/97	08/31/04
CHARLOTTE, NC		—		5,887,992		57,945,322		63,833,314		24,851,272		14,482,247		74,202,339		88,684,586		24,080,487
Forest Lake at Oyster Point		—		780,117		8,861,878		9,641,995		5,505,641		1,229,199		13,918,437		15,147,636		5,820,498	1986	08/15/95
Woodscape		—		798,700		7,209,525		8,008,225		6,823,032		1,890,883		12,940,374		14,831,257		7,470,647	1974/76	12/29/87
Eastwind		—		155,000		5,316,738		5,471,738		4,036,128		538,045		8,969,822		9,507,866		4,846,003	1970	04/04/88
Dominion Waterside at Lynnhaven		—		1,823,983		4,106,710		5,930,693		4,060,696		2,101,598		7,889,791		9,991,389		3,465,905	1966	08/15/96
Heather Lake		—		616,800		3,400,672		4,017,472		7,842,956		1,130,593		10,729,834		11,860,428		6,886,274	1972/74	03/01/80
Dominion Yorkshire Downs		9,117,528		1,088,887		8,581,771		9,670,658		3,465,925		1,374,411		11,762,173		13,136,583		3,772,126	1987	12/23/97
NORFOLK, VA		9,117,528		5,263,487		37,477,294		42,740,781		31,734,379		8,264,729		66,210,430		74,475,160		32,261,452
Greens at Falls Run		—		2,730,722		5,300,203		8,030,925		2,761,845		2,953,583		7,839,187		10,792,770		3,201,703	1989	05/04/95
Manor at England Run		19,462,000		3,194,527		13,505,239		16,699,766		14,913,101		4,969,191		26,643,676		31,612,867		11,393,155	1990	05/04/95
Greens at Hollymead		—		965,114		5,250,374		6,215,488		2,020,953		1,102,913		7,133,528		8,236,441		2,858,040	1990	05/04/95
Brittingham Square		—		650,143		4,962,246		5,612,389		1,824,183		885,421		6,551,151		7,436,572		2,737,050	1991	05/04/95
Greens at Schumaker Pond		—		709,559		6,117,582		6,827,141		3,313,853		933,574		9,207,420		10,140,994		3,553,610	1988	05/04/95
Greens at Cross Court		—		1,182,414		4,544,012		5,726,426		2,665,852		1,405,739		6,986,539		8,392,278		2,920,437	1987	05/04/95
Greens at Hilton Run		16,770,382		2,754,447		10,482,579		13,237,026		4,240,703		3,128,107		14,349,623		17,477,729		5,882,280	1988	05/04/95
Dover Country		—		2,007,878		6,365,053		8,372,931		4,974,927		2,406,628		10,941,230		13,347,858		5,244,494	1970	07/01/94
Greens at Cedar Chase		—		1,528,667		4,830,738		6,359,405		1,867,601		1,731,782		6,495,224		8,227,006		2,669,514	1988	05/04/95
Colony Village		—		346,330		3,036,956		3,383,286		3,003,337		610,050		5,776,573		6,386,623		4,247,701	1972/74	12/31/84
Brynn Marr		—		432,974		3,821,508		4,254,482		3,924,564		819,623		7,359,423		8,179,046		5,188,293	1973/77	12/31/84
Liberty Crossing		—		840,000		3,873,139		4,713,139		4,485,672		1,560,651		7,638,160		9,198,811		5,493,595	1972/74	11/30/90
Bramblewood		—		401,538		3,150,912		3,552,450		2,990,610		639,007		5,904,053		6,543,060		3,926,399	1980/82	12/31/84
OTHER MID-ATLANTIC		36,232,382		17,744,313		75,240,541		92,984,854		52,987,201		23,146,267		122,825,788		145,972,055		59,316,272
TOTAL MID-ATLANTIC REGION		218,917,985		148,652,532		762,598,399		911,250,931		332,111,820		225,961,989		1,017,400,761		1,243,362,750		383,664,693

79

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
SOUTHEASTERN REGION
Bay Cove		—		2,928,847		6,578,257		9,507,104		8,516,181		3,550,944		14,472,341		18,023,285		7,818,429	1972	12/16/92
Summit West		—		2,176,500		4,709,970		6,886,470		5,422,337		2,712,176		9,596,632		12,308,807		5,566,869	1972	12/16/92
Pinebrook		—		1,780,375		2,458,172		4,238,547		5,815,264		2,080,783		7,973,028		10,053,811		4,728,118	1977	09/28/93
Lakewood Place		9,855,656		1,395,051		10,647,377		12,042,428		5,491,060		1,910,324		15,623,164		17,533,488		6,482,395	1986	03/10/94
Hunters Ridge		10,312,031		2,461,548		10,942,434		13,403,982		4,316,171		3,239,623		14,480,530		17,720,153		6,386,390	1992	06/30/95
Bay Meadow		—		2,892,526		9,253,525		12,146,051		6,399,960		3,668,346		14,877,665		18,546,011		6,027,750	1985	12/09/96
Cambridge		—		1,790,804		7,166,329		8,957,133		4,058,715		2,196,297		10,819,551		13,015,848		4,043,649	1985	06/06/97
Laurel Oaks		—		1,361,553		6,541,980		7,903,533		3,203,806		1,653,033		9,454,307		11,107,339		3,686,561	1986	07/01/97
Sugar Mill Creek		10,611,283		2,241,880		7,552,520		9,794,400		3,575,848		2,432,269		10,937,979		13,370,248		3,175,430	1988	12/07/98
Inlet Bay		—		7,701,679		23,149,670		30,851,349		6,454,915		7,853,451		29,452,813		37,306,264		6,567,452	1988/89	06/30/03
MacAlpine Place		32,474,234		10,869,386		36,857,512		47,726,898		1,135,543		10,882,698		37,979,743		48,862,441		4,992,293	2001	12/01/04
Gallery at Bayport II		—		5,775,144		17,236,146		23,011,290		6,624		8,599,879		14,418,034		23,017,913		78,283	1985/87	10/23/06
Island Walk		—		7,230,575		19,897,415		27,127,990		5,537,725		9,385,143		23,280,573		32,665,715		11,679,787	1985/87	07/10/06
TAMPA, FL		63,253,204		50,605,867		162,991,307		213,597,175		59,934,149		60,164,964		213,366,360		273,531,324		71,233,408
Fisherman’s Village		—		2,387,368		7,458,897		9,846,265		6,780,692		3,435,653		13,191,304		16,626,957		6,407,115	1984	12/29/95
Seabrook		—		1,845,853		4,155,275		6,001,128		5,460,882		2,451,952		9,010,058		11,462,010		4,893,939	1984	02/20/96
Dover Village		—		2,894,702		6,456,100		9,350,802		7,333,589		3,484,422		13,199,968		16,684,391		6,963,573	1981	03/31/93
Altamira Place		—		1,532,700		11,076,062		12,608,762		14,886,642		2,736,050		24,759,354		27,495,404		9,472,543	1984	04/14/94
Regatta Shore		—		757,008		6,607,367		7,364,375		9,448,831		1,593,516		15,219,690		16,813,206		8,007,464	1988	06/30/94
Alafaya Woods		8,950,593		1,653,000		9,042,256		10,695,256		5,472,442		2,255,451		13,912,247		16,167,698		6,136,872	1988/90	10/21/94
Andover Place		12,799,781		3,692,187		7,756,919		11,449,106		5,435,071		4,804,189		12,079,989		16,884,177		6,321,890	1988	09/29/95 & 09/30/96
Los Altos		12,134,612		2,803,805		12,348,464		15,152,269		5,196,855		3,532,884		16,816,240		20,349,124		6,993,240	1990	10/31/96
Lotus Landing		—		2,184,723		8,638,664		10,823,387		4,991,006		2,563,451		13,250,942		15,814,393		4,519,554	1985	07/01/97
Seville on The Green		—		1,282,616		6,498,062		7,780,678		4,880,179		1,589,137		11,071,719		12,660,857		3,869,689	1986	10/21/97
Ashton at Waterford		13,986,375		3,871,744		17,537,879		21,409,623		944,120		3,987,764		18,365,979		22,353,743		7,546,307	2000	05/28/98
Arbors at Lee Vista DCO		—		6,692,423		12,860,210		19,552,633		6,937,463		6,778,814		19,711,281		26,490,095		7,153,599	1992	08/28/06

80

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
ORLANDO, FL		47,871,361		31,598,129		110,436,155		142,034,284		77,767,772		39,213,283		180,588,772		219,802,055		78,285,784
Legacy Hill		—		1,147,660		5,867,567		7,015,227		5,880,561		1,526,816		11,368,973		12,895,788		5,378,918	1977	11/06/95
Hickory Run		—		1,468,727		11,583,786		13,052,513		4,911,998		1,899,394		16,065,117		17,964,511		6,288,565	1989	12/29/95
Carrington Hills		19,751,087		2,117,244		—		2,117,244		27,526,840		3,967,960		25,676,124		29,644,084		8,960,927	1999	12/06/95
Brookridge		—		707,508		5,461,251		6,168,759		2,674,154		945,770		7,897,143		8,842,913		3,339,727	1986	03/28/96
Club at Hickory Hollow		11,884,206		2,139,774		15,231,201		17,370,975		3,722,807		2,805,862		18,287,920		21,093,782		7,206,173	1987	02/21/97
Breckenridge		—		766,428		7,713,862		8,480,290		2,322,278		1,057,665		9,744,904		10,802,568		3,532,759	1986	03/27/97
Williamsburg		—		1,376,190		10,931,309		12,307,499		3,123,604		1,709,625		13,721,478		15,431,103		4,741,104	1986	05/20/98
Colonnade		10,923,011		1,459,754		16,014,857		17,474,611		1,746,703		1,706,650		17,514,664		19,221,314		5,133,937	1998	01/07/99
The Preserve at Brentwood		14,945,588		3,181,524		24,674,264		27,855,788		1,886,898		3,182,047		26,560,639		29,742,686		4,316,251	1998	06/01/04
Polo Park		14,081,592		4,582,666		16,293,022		20,875,688		1,239,621		4,582,666		17,532,643		22,115,308		733,776	1987	05/02/06
NASHVILLE, TN		71,585,484		18,947,475		113,771,119		132,718,594		55,035,463		23,384,454		164,369,604		187,754,057		49,632,138
Greentree		17,042,773		1,634,330		11,226,990		12,861,320		8,429,832		2,567,951		18,723,201		21,291,152		8,656,402	1986	07/22/94
Westland		—		1,834,535		14,864,742		16,699,277		7,908,532		2,805,120		21,802,689		24,607,809		9,824,925	1990	05/09/96
Antlers		—		4,034,039		11,192,842		15,226,881		8,779,968		5,035,720		18,971,130		24,006,849		9,319,597	1985	05/28/96
St Johns Plantation		—		4,288,214		33,101,763		37,389,977		3,047,934		4,303,230		36,134,681		40,437,911		3,391,855	1989	06/30/05
JACKSONVILLE, FL		17,042,773		11,791,118		70,386,337		82,177,455		28,166,266		14,712,021		95,631,701		110,343,721		31,192,778
Stanford Village		—		884,500		2,807,839		3,692,339		2,899,122		1,225,530		5,365,931		6,591,461		3,127,231	1985	09/26/89
Griffin Crossing		—		1,509,633		7,544,018		9,053,651		3,382,405		1,896,449		10,539,607		12,436,056		4,978,117	1987/89	06/08/94
Gwinnett Square		6,384,352		1,924,325		7,376,454		9,300,779		4,262,517		2,269,177		11,294,119		13,563,296		4,753,528	1985	03/29/95
Dunwoody Pointe		8,530,388		2,763,324		6,902,996		9,666,320		7,697,445		3,470,002		13,893,762		17,363,765		7,502,215	1980	10/24/95
Riverwood		8,969,033		2,985,599		11,087,903		14,073,502		6,260,074		3,555,338		16,778,237		20,333,576		8,195,790	1980	06/26/96
Waterford Place		—		1,579,478		10,302,679		11,882,157		2,608,898		1,720,613		12,770,442		14,491,055		3,836,926	1985	04/15/98
ATLANTA, GA		23,883,773		11,646,859		46,021,889		57,668,748		27,110,461		14,137,110		70,642,099		84,779,209		32,393,807
Mallards of Wedgewood		—		959,284		6,864,666		7,823,950		3,240,693		1,270,466		9,794,177		11,064,643		4,480,124	1985	07/27/95
Vinyards		7,715,000		1,840,230		11,571,625		13,411,855		6,738,357		2,825,371		17,324,841		20,150,212		8,076,796	1984/86	10/31/94
Heron Lake		—		1,446,553		9,287,878		10,734,431		4,636,633		1,715,638		13,655,426		15,371,064		4,257,720	1989	03/27/98
Riverbridge		44,873,487		15,968,090		56,400,716		72,368,806		1,539,321		15,977,983		57,930,144		73,908,127		7,391,624	1999/2001	12/01/04
The Groves		—		789,953		4,767,055		5,557,008		4,111,047		1,523,927		8,144,128		9,668,055		3,662,332	1989	12/13/95
Mallards of Brandywine		—		765,949		5,407,683		6,173,632		2,236,521		1,022,210		7,387,943		8,410,153		3,032,559	1985	07/01/97
LakePointe		—		1,434,450		4,940,166		6,374,616		4,773,865		1,928,945		9,219,536		11,148,481		4,785,327	1984	09/24/93
Lakeside TRS		—		3,373,265		7,095,763		10,469,028		3,974,454		3,529,056		10,914,425		14,443,482		3,389,350	1985	12/29/05

81

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
OTHER FLORIDA		52,588,487		26,577,774		106,335,552		132,913,326		31,250,890		29,793,596		134,370,620		164,164,216		39,075,831
Gable Hill		—		824,847		5,307,194		6,132,041		2,729,836		1,232,747		7,629,130		8,861,877		4,356,816	1985	12/04/89
St. Andrews Commons		—		1,428,826		9,371,378		10,800,204		3,988,361		2,088,903		12,699,663		14,788,565		6,329,838	1986	05/20/93
Forestbrook		—		395,516		2,902,040		3,297,556		2,519,287		622,699		5,194,144		5,816,843		3,414,444	1974	07/01/93
Waterford		—		957,980		6,947,939		7,905,919		2,927,718		1,356,812		9,476,826		10,833,637		4,509,659	1985	07/01/94
Hampton Greene		—		1,363,046		10,118,453		11,481,499		2,779,701		2,032,419		12,228,781		14,261,200		5,671,906	1990	08/19/94
Rivergate		—		1,122,500		12,055,625		13,178,125		3,610,859		1,535,821		15,253,163		16,788,984		5,641,235	1989	08/15/96
Patriot Place		—		212,500		1,600,757		1,813,257		6,302,406		1,531,073		6,584,590		8,115,663		5,022,925	1974	10/23/85
OTHER SOUTHEASTERN		—		6,305,215		48,303,386		54,608,601		24,858,169		10,400,473		69,066,297		79,466,770		34,946,823
TOTAL SOUTHEASTERN REGION		276,225,082		157,472,437		658,245,744		815,718,182		304,123,170		191,805,900		928,035,452		1,119,841,352		336,760,569
SOUTHWESTERN REGION
Woodtrail		—		1,543,000		5,457,000		7,000,000		4,875,303		1,983,968		9,891,335		11,875,303		4,498,164	1978	12/31/96
Green Oaks		—		5,313,920		19,626,181		24,940,101		6,845,183		6,216,165		25,569,119		31,785,284		9,853,306	1985	06/25/97
Sky Hawk		—		2,297,741		7,157,965		9,455,706		3,496,578		2,879,326		10,072,959		12,952,284		4,511,668	1984	05/08/97
South Grand at Pecan Grove		—		4,058,090		14,755,809		18,813,899		9,264,436		5,045,457		23,032,878		28,078,335		9,296,032	1985	09/26/97
Braesridge		12,938,750		3,048,212		10,961,749		14,009,961		4,326,210		3,677,697		14,658,474		18,336,171		5,606,722	1982	09/26/97
Skylar Pointe		—		3,604,483		11,592,432		15,196,915		6,404,146		3,886,426		17,714,635		21,601,061		7,886,279	1979	11/20/97
Stone Canyon		—		899,515		—		899,515		9,768,750		1,353,386		9,314,878		10,668,265		3,174,069	1998	12/17/97
Chelsea Park		5,411,501		1,991,478		5,787,626		7,779,104		4,097,253		2,548,802		9,327,555		11,876,357		3,557,782	1983	03/27/98
Country Club Place		5,843,563		498,632		6,520,172		7,018,804		2,236,784		745,468		8,510,120		9,255,588		3,037,259	1985	03/27/98
Arbor Ridge		—		1,688,948		6,684,229		8,373,177		1,326,208		2,155,086		7,544,298		9,699,385		3,112,033	1983	03/27/98
London Park		—		2,018,478		6,667,450		8,685,928		3,593,364		2,664,679		9,614,613		12,279,292		4,020,480	1983	03/27/98
Marymont		—		1,150,669		4,155,411		5,306,080		1,658,833		1,230,221		5,734,692		6,964,913		1,936,945	1983	03/27/98
Riviera Pines		—		1,413,851		6,453,847		7,867,698		3,031,406		1,627,436		9,271,668		10,899,104		2,654,183	1979	03/27/98
Towne Lake		—		1,333,958		5,308,884		6,642,842		2,473,736		1,743,690		7,372,888		9,116,578		3,121,533	1984	03/27/98
The Legend at Park 10		—		1,995,011		—		1,995,011		12,213,814		3,871,213		10,337,612		14,208,825		5,350,641	1998	05/19/98
The Bradford		16,498,944		1,151,180		40,829,514		41,980,694		3,860,925		6,682,943		39,158,677		45,841,620		7,997,604	1990/91	11/20/03

82

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
HOUSTON, TX		40,692,758		34,007,166		151,958 ,269		185,965,435		79,472,927		48,311,962		217,126,400		265,438,363		79,614,699
Highlands of Preston		—		2,151,056		8,167,630		10,318,686		3,432,019		2,558,931		11,191,774		13,750,705		4,164,586	1985	03/27/98
Meridian		23,970,724		6,012,806		29,094,186		35,106,992		1,858,096		6,462,648		30,502,441		36,965,088		10,668,030	2000/02	01/27/98 & 12/28/01
Lincoln Towne Square		—		7,541,141		31,484,858		39,025,999		1,042,371		7,566,237		32,502,133		40,068,370		5,910,584	1999	03/12/04
Highlands of Preston II		—		2,197,794		7,512,983		9,710,777		326,964		2,197,794		7,839,947		10,037,741		485,617	1986	01/12/06
The Park at Turtle Creek		—		24,035,881		33,227,383		57,263,264		272,053		24,035,881		33,499,436		57,535,317		713,774	1999	08/24/06
Greenhaven Village		—		916,415		14,996,331		15,912,747		46,527		916,415		15,042,858		15,959,274		312,939	1971	09/08/06
The Addison at Brookhaven		—		16,720,828		8,465,513		25,186,341		66,762		16,721,087		8,532,016		25,253,103		120,256	1975	10/31/06
DALLAS, TX		23,970,724		59,575,921		132,948,885		192,524,806		7,044,793		60,458,993		139,110,606		199,569,599		22,375,786
Autumnwood		—		2,412,180		8,687,820		11,100,000		3,346,127		2,859,893		11,586,234		14,446,127		4,593,190	1984	12/31/96
Cobblestone		—		2,925,372		10,527,738		13,453,110		5,267,966		3,355,646		15,365,430		18,721,076		6,377,939	1984	12/31/96
Summit Ridge		6,097,554		1,725,508		6,308,032		8,033,540		3,796,204		2,411,663		9,418,081		11,829,744		3,571,906	1983	03/27/98
Derby Park		10,843,584		3,121,153		11,764,974		14,886,127		3,831,323		3,926,609		14,790,840		18,717,450		5,890,696	1984	03/27/98
Aspen Court		3,601,515		776,587		4,944,947		5,721,534		2,031,575		1,174,640		6,578,469		7,753,109		2,496,717	1986	03/27/98
The Cliffs		—		3,483,876		18,657,051		22,140,927		2,307,396		3,857,526		20,590,797		24,448,323		6,920,305	1992	01/29/02
ARLINGTON, TX		20,542,653		14,444,676		60,890,562		75,335,238		20,580,591		17,585,977		78,329,852		95,915,829		29,850,752
Pecan Grove		—		1,406,750		5,293,250		6,700,000		1,867,698		1,541,867		7,025,831		8,567,698		2,367,353	1984	12/31/96
Anderson Mill		6,072,561		3,134,669		11,170,376		14,305,045		5,942,651		3,586,228		16,661,469		20,247,696		7,564,139	1984	03/27/97
Red Stone Ranch		—		1,896,723		17,525,536		19,422,259		1,007,281		5,437,249		14,992,291		20,429,540		7,006,485	2000	06/14/00
Barton Creek Landing		—		3,150,998		14,269,086		17,420,084		2,140,806		3,198,887		16,362,003		19,560,890		4,814,922	1986	03/28/02
Lakeline Villas		—		4,633,398		13,297,860		17,931,258		335,836		4,633,454		13,633,640		18,267,095		2,302,004	2002	07/15/04
AUSTIN, TX		6,072,561		14,222,538		61,556,108		75,778,646		11,294,273		18,397,685		68,675,235		87,072,919		24,054,903
Greensview		—		6,450,216		24,405,137		30,855,353		3,632,299		6,094,939		28,392,713		34,487,652		10,036,017	1987/2002	12/07/98
Reflections at Cherry Creek		—		6,305,326		27,201,579		33,506,905		2,430,753		6,547,710		29,389,948		35,937,658		8,662,968	1981/96	04/30/02
DENVER, CO		—		12,755,542		51,606,716		64,362,258		6,063,051		12,642,649		57,782,661		70,425,309		18,698,985
Finisterra		—		1,273,798		26,392,207		27,666,005		1,777,191		1,478,413		27,964,784		29,443,196		8,464,450	1997	03/27/98
Sierra Foothills		14,031,553		2,728,172		—		2,728,172		19,515,999		4,920,141		17,324,029		22,244,171		8,948,096	1998	02/18/98
Sierra Canyon		13,739,709		1,809,864		12,963,581		14,773,444		655,441		1,880,864		13,548,022		15,428,886		4,536,682	2001	12/28/01

83

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized			Gross Amount at
			Initial Costs				Total		Subsequent			Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition			Land and		Buildings		Total
			Land		and		Acquisition		(Net of			Land		and		Carrying		Accumulated		Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)			Improvements		Improvements		Value(A)		Depreciation(B)		Construction	Acquired
PHOENIX, AZ		27,771,262		5,811,834		39,355,788		45,167,621		21,948,632			8,279,419		58,836,834		67,116,253		21,949,228
Oak Park		18,278,466		3,966,129		22,227,701		26,193,830		4,471,487			5,719,991		24,945,327		30,665,317		10,132,043	1982/98	12/31/96
Oak Forest		23,395,160		5,630,740		23,293,922		28,924,662		12,284,148			6,629,796		34,579,014		41,208,810		14,553,835	1996/98	12/31/96
Mandolin		—		4,222,640		27,909,437		32,132,077		5,128,417			6,436,955		30,823,539		37,260,494		9,937,243	2001	12/28/01
Inn at Los Patios		—		3,005,300		11,544,700		14,550,000		(1,453,838	)		3,023,264		10,072,898		13,096,162		2,695,479	1990	08/15/98
Turtle Creek		—		1,913,177		7,086,823		9,000,000		2,912,753			2,352,966		9,559,787		11,912,753		3,633,576	1985	12/31/96
Shadow Lake		—		2,523,670		8,976,330		11,500,000		4,248,731			3,170,899		12,577,832		15,748,731		4,972,006	1984	12/31/96
OTHER SOUTHWESTERN		41,673,626		21,261,656		101,038,913		122,300,569		27,591,699			27,333,871		122,558,396		149,892,268		45,924,181
TOTAL SOUTHWESTERN REGION		160,723,584		162,079,333		599,355,241		761,434,574		173,995,966			193,010,556		742,419,985		935,430,540		242,468,534
MIDWESTERN REGION
Sycamore Ridge		—		4,067,900		15,433,285		19,501,185		3,169,803			4,443,889		18,227,099		22,670,988		5,547,075	1997	07/02/98
Heritage Green		—		2,990,199		11,391,797		14,381,996		10,218,635			3,267,000		21,333,631		24,600,631		6,805,931	1998	07/02/98
Alexander Court		13,498,020		1,573,412		—		1,573,412		22,065,445			6,394,096		17,244,761		23,638,857		8,122,928	1999	07/02/98
Governour’s Square		27,137,118		7,512,513		28,695,050		36,207,563		9,206,162			8,107,912		37,305,813		45,413,725		11,376,992	1967	12/07/98
Hickory Creek		—		3,421,413		13,539,402		16,960,815		5,260,716			3,854,636		18,366,895		22,221,531		5,392,660	1988	12/07/98
Britton Woods		—		3,476,851		19,213,411		22,690,262		4,549,064			4,254,912		22,984,415		27,239,326		9,638,687	1991	04/20/01
COLUMBUS, OH		40,635,138		23,042,288		88,272,945		111,315,233		54,469,827			30,322,445		135,462,615		165,785,060		46,884,273
Washington Park		—		2,011,520		7,565,279		9,576,799		1,466,386			2,158,441		8,884,744		11,043,185		2,878,092	1998	12/07/98
Fountainhead		—		390,542		1,420,166		1,810,708		674,637			455,858		2,029,487		2,485,345		711,070	1966	12/07/98
Jamestown of Toledo		6,241,270		1,800,271		7,053,585		8,853,856		2,507,791			1,981,133		9,380,514		11,361,647		3,104,798	1965	12/07/98
OTHER MIDWESTERN		6,241,270		4,202,333		16,039,030		20,241,363		4,648,814			4,595,432		20,294,745		24,890,177		6,693,959
TOTAL MIDWESTERN REGION		46,876,408		27,244,621		104,311,975		131,556,596		59,118,641			34,917,877		155,757,359		190,675,237		53,578,232
TOTAL APARTMENTS		1,104,969,315		1,205,620,134		3,238,640,667		4,444,260,801		1,090,414,625			1,350,716,906		4,183,958,521		5,534,675,426		1,236,262,734
REAL ESTATE HELD FOR DISPOSITION
Apartments
Beaumont		—		2,339,132		12,559,224		14,898,356		1,102,620			2,456,550		13,544,426		16,000,976		5,939,865	1996	06/14/00
Grand Terrace		—		2,144,340		6,594,615		8,738,955		2,215,995			2,264,606		8,690,344		10,954,950		2,740,486	1986	06/30/99
University Park TRS		—		3,079,034		7,256,292		10,335,326		(9,962,536	)		—		372,790		372,790		—	1980	02/11/05
Sierra Palms		—		5,091,616		11,997,769		17,089,385		8,087,301			5,345,615		19,831,071		25,176,686		6,127,850	1996	05/11/06
Total Apartments		—		12,654,122		38,407,900		51,062,022		1,443,379			10,066,771		42,438,630		52,505,401		14,808,201

84

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

									Cost of
									Improvements
									Capitalized		Gross Amount at
			Initial Costs				Total		Subsequent		Which Carried at Close of Period
			Land and		Buildings		Initial		to Acquisition		Land and		Buildings		Total
			Land		and		Acquisition		(Net of		Land		and		Carrying		Accumulated			Date of	Date
Property	Encumbrances		Improvements		Improvements		Costs		Disposals)		Improvements		Improvements		Value(A)		Depreciation(B)			Construction	Acquired
Land
Fossil Creek		—		3,932,115		—		3,932,115		215,304		3,683,156		464,263		4,147,419		—
Total Held for Disposition		—		16,586,237		38,407,900		54,994,137		1,658,683		13,749,927		42,902,893		56,652,820		14,808,201
REAL ESTATE UNDER DEVELOPMENT
Apartments
2161 Sutter-TRS		—		1,755,643		7,753,477		9,509,120		744,530		1,755,643		8,498,007		10,253,650		—
Lincoln Towne Square PH II		—		2,951,277		—		2,951,277		1,432,854		2,939,593		1,444,538		4,384,131		—
Ridgeview PH I		—		2,341,936		—		2,341,936		5,954,451		1,789,978		6,506,409		8,296,387		(563	)
Ridgeview Townhomes		—		2,349,923		—		2,349,923		4,672,127		1,120,000		5,902,050		7,022,050		198
West & Gessner		—		3,600,000		—		3,600,000		820,995		3,823,625		597,370		4,420,995		—
Total Apartments		—		12,998,779		7,753,477		20,752,256		13,624,957		11,428,839		22,948,374		34,377,213		(364	)
Land
Waterside		—		11,861,682		93,478		11,955,160		9,813		11,861,682		103,291		11,964,973		77,928
Ridgeview Ph II		—		1,918,411		—		1,918,411		33,951		1,469,609		482,753		1,952,362		(318	)
Parkers Landing II TRS		—		1,709,606		—		1,709,606		241,523		1,510,700		440,429		1,951,129		—
Presidio Lnd		—		1,523,922		—		1,523,922		198,292		1,300,000		422,214		1,722,214		—
UDR/ Pacific Los Alisos, LP		—		17,297,661		—		17,297,661		566,572		16,311,758		1,552,474		17,864,233		—
Jefferson JV LLC		—		—		—		—		1,026,785		—		1,026,785		1,026,785		—
Jefferson at Marina del Rey		45,403,222		55,651,137		—		55,651,137		19,923,573		55,651,137		19,923,573		75,574,710		—
Bellevue Plaza		22,270,500		5,793,892		—		5,793,892		28,077,606		31,590,000		2,281,498		33,871,498		450,000
Ashwood Commons II		—		13,926,400		—		13,926,400		9,733,535		13,926,400		9,733,535		23,659,935		—
Bellevue JV LLC		—		—		—		—		348,132		—		348,132		348,132		—
Total Land		67,673,722		109,682,711		93,478		109,776,189		60,159,782		133,621,286		36,314,684		169,935,971		527,610
Total Real Estate Under Development		67,673,722		122,681,490		7,846,955		130,528,445		73,784,739		145,050,126		59,263,058		204,313,184		527,246
Commercial Held for Investment
Hanover Village		—		1,623,910		—		1,623,910		5		1,103,600		520,315		1,623,915		491,869
The Calvert -commercial side		—		34,128		1,597,359		1,631,486		153		326,899		1,304,741		1,631,639		235,337
Grandview DCO		10,276,147		7,266,024		9,701,625		16,967,649		166,757		7,266,024		9,868,382		17,134,406		263,995		1980	11/21/06
Total Commercial		10,276,147		8,924,062		11,298,984		20,223,045		166,915		8,696,523		11,693,437		20,389,960		991,201
Richmond Corporate		—		277,225		277,225		554,450		3,536,315		227,225		3,863,540		4,090,765		1,137,400
Commercial & Corporate		10,276,147		9,201,287		11,576,209		20,777,495		3,703,230		8,923,748		15,556,977		24,480,725		2,128,601
TOTAL REAL ESTATE OWNED	$	1,182,919,185	$	1,354,089,149	$	3,296,471,730	$	4,650,560,879	$	1,169,561,277	$	1,518,440,706	$	4,301,681,449	$	5,820,122,155	$	1,253,726,781

(A)	The aggregate cost for federal income tax purposes was approximately $5.3 billion at December 31, 2006.
(B)	The depreciable life for all buildings is 35 years.

85

UNITED DOMINION REALTY TRUST

SCHEDULE III — REAL ESTATE OWNED — (Continued)

3-YEAR ROLLFORWARD OF REAL ESTATE OWNED AND ACCUMULATED DEPRECIATION

The following is a reconciliation of the carrying amount of total real estate owned at December 31:

	2006			2005			2004
Balance at beginning of year	$	5,512,424,090		$	5,243,295,963		$	4,351,551,324
Real estate acquired		392,058,366			439,559,832			1,069,800,745
Capital expenditures & development		379,629,467			205,465,000			101,520,917
Real estate sold		(463,989,768	)		(375,896,705	)		(279,577,023	)
Balance at end of year	$	5,820,122,155		$	5,512,424,090		$	5,243,295,963

The following is a reconciliation of total accumulated depreciation for real estate owned at December 31:

	2006			2005			2004
Balance at beginning of year	$	1,123,829,081		$	1,007,887,007		$	896,630,032
Depreciation expense for the year		243,348,343			208,393,075			178,045,994
Accumulated depreciation on sales		(113,450,643	)		(92,451,001	)		(66,789,019	)
Balance at end of year	$	1,253,726,781		$	1,123,829,081		$	1,007,887,007

86

EXHIBIT INDEX

The exhibits listed below are filed as part of this Report. References under the caption “Location” to exhibits or other filings indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. Management contracts and compensatory plans or arrangements filed as exhibits to this Report are identified by an asterisk. The Commission file number for our Exchange Act filings referenced below is 1-10524.

Exhibit			Description	Location
	2	.01	Agreement and Plan of Merger dated as of December 19, 1997, between the Company, ASR Investment Corporation and ASR Acquisition Sub, Inc.	Exhibit 2(a) to the Company’s Form S-4 Registration Statement (Registration No. 333-45305) filed with the Commission on January 30, 1998.
	2	.02	Agreement of Plan of Merger dated as of September 10, 1998, between the Company and American Apartment Communities II, Inc. including as exhibits thereto the proposed terms of the Series D Preferred Stock and the proposed form of Investment Agreement between the Company, United Dominion Realty, L.P., American Apartment Communities II, Inc., American Apartment Communities Operating Partnership, L.P., Schnitzer Investment Corp., AAC Management LLC and LF Strategic Realty Investors, L.P.	Exhibit 2(c) to the Company’s Form S-3 Registration Statement (Registration No. 333-64281) filed with the Commission on September 25, 1998.
	2	.03	Partnership Interest Purchase and Exchange Agreement dated as of September 10, 1998, between the Company, United Dominion Realty, L.P., American Apartment Communities Operating Partnership, L.P., AAC Management LLC, Schnitzer Investment Corp., Fox Point Ltd. and James D. Klingbeil including as an exhibit thereto the proposed form of the Third Amended and Restated Limited Partnership Agreement of United Dominion Realty, L.P.	Exhibit 2(d) to the Company’s Form S-3 Registration Statement (Registration No. 333-64281) filed with the Commission on September 25, 1998.
	2	.04	Agreement of Purchase and Sale dated as of August 13, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein.	Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 28, 2004 and filed with the Commission on September 29, 2004.
	2	.05	First Amendment to Agreement of Purchase and Sale dated as of September 29, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein.	Exhibit 2.2 to the Company’s Current Report on Form 8-K dated September 29, 2004 and filed with the Commission on October 5, 2004.

Exhibit			Description	Location
	2	.06	Second Amendment to Agreement of Purchase and Sale dated as of October 26, 2004, by and between United Dominion Realty, L.P., a Delaware limited partnership, as Buyer, and Essex The Crest, L.P., a California limited partnership, Essex El Encanto Apartments, L.P., a California limited partnership, Essex Hunt Club Apartments, L.P., a California limited partnership, and the other signatories named as Sellers therein.	Exhibit 2.3 to the Company’s Current Report on Form 8-K/A dated September 29, 2004 and filed with the Commission on November 1, 2004.
	3	.01	Articles of Restatement.	Exhibit 3.09 to the Company’s Current Report on Form 8-K dated July 27, 2005 and filed with the Commission on August 1, 2005.
	3	.02	Amended and Restated Bylaws (as amended through October 13, 2006).	Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 13, 2006 and filed with the Commission on October 19, 2006.
	4	.01	Form of Common Stock Certificate.	Exhibit 4.1 to the Company’s Registration Statement on Form 8-A/A dated and filed with the Commission on November 7, 2005.
	4	.02	Form of Certificate for Shares of 8.60% Series B Cumulative Redeemable Preferred Stock.	Exhibit I(e) to the Company’s Form 8-A Registration Statement dated June 10, 1997 and filed with the Commission on June 11, 1997.
	4	.03	Form of Rights Certificate.	Exhibit 4(e) to the Company’s Registration Statement on Form 8-A dated and filed with the Commission on February 4, 1998.
	4	.04	First Amended and Restated Rights Agreement dated as of September 14, 1999, between the Company and the Rights Agent.	Exhibit 4(i)(d)(A) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
	4	.05	Note Purchase Agreement dated as of February 15, 1993, between the Company and CIGNA Property the Company and CIGNA Property and Casualty Insurance Company, Connecticut General Life Insurance Company, on behalf of one or more separate accounts, Insurance Company of North America, Principal Mutual Life Insurance Company and Aid Association for Lutherans.	Exhibit 6(c)(5) to the Company’s Form 8-A Registration Statement dated April 19, 1990.
	4	.06	Senior Indenture dated as of November 1, 1995.	Exhibit 4(ii)(h)(1) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
	4	.07	Supplemental Indenture dated as of June 11, 2003.	Exhibit 4.03 to the Company’s Current Report on Form 8-K dated June 17, 2004 and filed with the Commission on June 18, 2004.
	4	.08	Subordinated Indenture dated as of August 1, 1994.	Exhibit 4(i)(m) to the Company’s Form S-3 Registration Statement (Registration No. 33-64725) filed with the Commission on November 15, 1995.
	4	.09	Indenture dated December 19, 2005 between the Company and SunTrust Bank, as Trustee, relating to the Company’s 4.00% Convertible Senior Notes due 2035, including the form note.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 13, 2005 and filed with the Commission on December 19, 2005.

Exhibit			Description	Location
	4	.10	Form of Senior Debt Security.	Exhibit 4(i)(n) to the Company’s Form S-3 Registration Statement (Registration No. 33-64725) filed with the Commission on November 15, 1995.
	4	.11	Form of Subordinated Debt Security.	Exhibit 4(i)(o) to the Company’s Form S-3 Registration Statement (Registration No. 33-55159) filed with the Commission on August 19, 1994.
	4	.12	Form of Fixed Rate Medium-Term Note.	Exhibit 4.01 to the Company’s Current Report on Form 8-K dated May 31, 2006 and filed with the Commission on June 5, 2006.
	4	.13	Form of Floating Rate Medium-Term Note.	Exhibit 4.02 to the Company’s Current Report on Form 8-K dated May 31, 2006 and filed with the Commission on June 5, 2006.
	4	.14	6.50% Notes due 2009.	Exhibit 4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
	4	.15	4.50% Medium-Term Notes due March 2008.	Exhibit 4.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, and Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
	4	.16	5.13% Medium-Term Note due January 2014.	Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, and Exhibits 4.1 and 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
	4	.17	4.25% Medium-Term Note due January 2009.	Exhibit 4.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
	4	.18	4.30% Medium-Term Note due July 2007.	Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004.
	4	.19	3.90% Medium-Term Note due March 2010.	Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
	4	.20	5.00% Medium-Term Notes due January 2012.	Exhibit 4.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
	4	.21	4.30% Medium-Term Note due July 2007.	Exhibit 4.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
	4	.22	5.25% Medium-Term Note due January 2015, issued November 1, 2004.	Exhibit 4.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
	4	.23	5.25% Medium-Term Note due January 2015, issued February 14, 2005.	Exhibit 4.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
	4	.24	5.25% Medium-Term Note due January 2015, issued March 8, 2005.	Exhibit 4.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Exhibit			Description	Location
	4	.25	5.25% Medium-Term Note due January 2015, issued May 3, 2005.	Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.
	4	.26	5.25% Medium-Term Note due January 2016, issued September 7, 2005.	Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.
	4	.27	Registration Rights Agreement dated October 12, 2006 between the Company and the Initial Purchasers of the Company’s 3.625% Convertible Senior Notes due 2011.	Exhibit 4.1 to the Company’s Current Report on Form 8-K dated October 5, 2006 and filed with the Commission on October 12, 2006.
	4	.28	Indenture dated October 12, 2006 between the Company and U.S. Bank National Association, as Trustee, relating to the Company’s 3.265% Convertible Senior Notes due 2011, including the form of note.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 5, 2006 and filed with the Commission on October 12, 2006.
	4	.29	6.05% Medium-Term Note due June 2013, issued June 7, 2006.	Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.
	10	.01*	1985 Stock Option Plan, as amended.	Exhibit 10(iv) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
	10	.02*	1991 Stock Purchase and Loan Plan.	Exhibit 10(viii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
	10	.03	Subordination Agreement dated April 16, 1998, between the Company and United Dominion Realty, L.P.	Exhibit 10(vi)(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
	10	.04	Servicing and Purchase Agreement dated as of June 24, 1999, including as an exhibit thereto the Note and Participation Agreement forms.	Exhibit 10(vii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
	10	.05*	Form of Restricted Stock Awards.	Exhibit 99.6 to the Company’s Current Report on Form 8-K dated December 31, 2004 and filed with the Commission on January 11, 2005.
	10	.06	Description of United Dominion Realty Trust, Inc. Shareholder Value Plan.	Exhibit 10(x) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999.
	10	.07*	Description of United Dominion Realty Trust, Inc. Executive Deferral Plan.	Exhibit 10(xi) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999.
	10	.08*	Retirement Agreement and Covenant Not to Compete between the Company and John P. McCann dated March 20, 2001.	Exhibit 10(xv) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.
	10	.09*	Description of Series A Out-Performance Program.	Exhibit 10(xvii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
	10	.10*	Description of Amendment to Series A Out-Performance Program.	Exhibit 10.03 to the Company’s Current Report on Form 8-K dated May 3, 2005 and filed with the Commission on May 9, 2005.
	10	.11*	1999 Long-Term Incentive Plan (as amended and restated through February 10, 2006).	Appendix A to the Company’s Definitive Proxy Statement dated March 31, 2006 and filed with the Commission on March 30, 2006.

Exhibit			Description	Location
	10	.12	Second Amended and Restated Agreement of Limited Partnership of Heritage Communities L.P.	Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
	10	.13	First Amendment of Second Amended and Restated Agreement of Limited Partnership of Heritage Communities L.P.	Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
	10	.14	Second Amendment to Second Amended and Restated Agreement of Limited Partnership of Heritage Communities L.P.	Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
	10	.15	Credit Agreement dated as of August 14, 2001, between the Company and certain subsidiaries and ARCS Commercial Mortgage Co., L.P., as Lender, as amended through October 5, 2006.	Filed herewith.
	10	.16	Credit Agreement dated as of December 12, 2001, between the Company and certain subsidiaries and ARCS Commercial Mortgage Co., L.P., as Lender, as amended through September 29, 2006.	Filed herewith.
	10	.17	Amended and Restated Credit Agreement dated May 25, 2005 between the Company and Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, Wachovia Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, SunTrust Bank and Wells Fargo Bank, National Association, as Documentation Agents, Citicorp North America, Inc., KeyBank, N.A. and U.S. Bank National Association, as Managing Agents, and LaSalle Bank National Association, Mizuho Corporate Bank, Ltd., New York Branch and UFJ Bank Limited, New York Branch as Co-Agents, and each of the financial institutions initially signatory thereto and their assignees.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 25, 2005 and filed with the Commission on May 27, 2005.
	10	.18*	Description of Series B Out-Performance Program.	Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
	10	.19*	Description of New Out-Performance Program.	Exhibit 10.01 to the Company’s Current Report on Form 8-K dated May 3, 2005 and filed with the Commission on May 9, 2005.
	10	.20*	Description of Series C Out-Performance Program.	Exhibit 10.02 to the Company’s Current Report on Form 8-K dated May 3, 2005 and filed with the Commission on May 9, 2005.
	10	.21*	Participation in the Series C Out-Performance Program.	Exhibit 10.07 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.
	10	.22	Amended and Restated Agreement of Limited Partnership of United Dominion Realty, L.P. dated as of February 23, 2004.	Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
	10	.23	First Amendment to the Amended and Restated Agreement of Limited Partnership of United Dominion Realty, L.P.	Exhibit 10.06 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.

Exhibit			Description	Location
	10	.24*	Employment Agreement of Richard A. Giannotti dated December 8, 1998.	Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
	10	.25*	Summary of 2006 Director Compensation.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 3, 2006 and filed with the Commission on January 6, 2006.
	10	.26*	Description of the Series D Out-Performance Program.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 2, 2006 and filed with the Commission on May 8, 2006.
	10	.27*	Executive Compensation Summary.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 15, 2006 and filed with the Commission on February 21, 2006.
	10	.28*	Agreement between the Company and Thomas W. Toomey dated November 7, 2005, regarding corporate aircraft.	Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.
	10	.29	Indenture dated October 12, 2006 between the Company and U.S. Bank National Association, as Trustee, including the form of note.	See Exhibit 4.28.
	10	.30*	Letter Agreement between the Company and Michael A. Ernst.	Exhibit 10.01 to the Company’s Current Report on Form 8-K dated May 31, 2006 and filed with the Commission on June 5, 2006.
	10	.31*	Form of Indemnification Agreement.	Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 2, 2006 and filed with the Commission on May 8, 2006.
	10	.32*	Form of Notice of Performance Contingent Restricted Stock Award.	Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 2, 2006 and filed with the Commission on May 8, 2006.
	10	.33*	Separation Agreement dated November 9, 2006 between the Company and Christopher D. Genry.	Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.
	10	.34*	Summary of 2007 Director Compensation.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 7, 2006 and filed with the Commission on December 12, 2006.
	10	.35	Senior Indenture dated as of November 1, 1995, as supplemented by Supplemental Indenture dated as of June 11, 2003.	See Exhibits 4.06 and 4.07.
	10	.36	Indenture dated December 19, 2005 between the Company and SunTrust Bank, as Trustee, including form of note.	See Exhibit 4.09.
	10	.37*	Notice of Performance Contingent Restricted Stock Award, including Restricted Stock Award Agreement for 2,350 Shares, for Mark M. Culwell, Jr.	Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 21, 2006 and filed with the Commission on June 23, 2006.
	10	.38*	Restricted Stock Award Agreement for 7,418 Shares for Mark M. Culwell, Jr.	Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 21, 2006 and filed with the Commission on June 23, 2006.
	10	.39*	Restricted Stock Award Agreement for 37,092 Shares for Mark M. Culwell, Jr.	Exhibit 10.3 to the Company’s Current Report on Form 8-K dated June 21, 2006 and filed with the Commission on June 23, 2006.

Exhibit			Description	Location
	10	.40	Second Amendment to the Amended and Restated Agreement of Limited Partnership of United Dominion Realty, L.P.	Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006.
	10	.41	Amended and Restated Master Credit Facility Agreement dated June 24, 2002 between the Company and Green Park Financial Limited Partnership, as amended through February 14, 2007.	Filed herewith.
	12		Computation of Ratio of Earnings to Fixed Charges.	Filed herewith.
	21		Subsidiaries.	Filed herewith.
	23		Consent of Independent Registered Public Accounting Firm.	Filed herewith.
	31	.1	Rule 13a-14(a) Certification of the Chief Executive Officer.	Filed herewith.
	31	.2	Rule 13a-14(a) Certification of the Chief Financial Officer.	Filed herewith.
	32	.1	Section 1350 Certification of the Chief Executive Officer.	Filed herewith.
	32	.2	Section 1350 Certification of the Chief Financial Officer.	Filed herewith.

EX-10.15

EXHIBIT 10.15

MASTER CREDIT FACILITY AGREEMENT

among

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation,

UDRT OF NORTH CAROLINA, L.L.C.,
a North Carolina limited liability company,

SOUTH WEST PROPERTIES, L.P.,
a Delaware limited partnership,

LA PRIVADA APARTMENTS, L.L.C.,
an Arizona limited liability company,

and

ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership,

dated as of

August 14, 2001

TABLE OF CONTENTS

	Page
RECITALS		1
ARTICLE I		2
ARTICLE II		18
SECTION 2.01 Revolving Facility Commitment		18
SECTION 2.02 Requests for Revolving Advances		18
SECTION 2.03 Maturity Date of Revolving Advances		18
SECTION 2.04 Interest on Revolving Facility Advances		19
SECTION 2.05 Coupon Rates for Revolving Advances		20
SECTION 2.06 Revolving Facility Note		20
SECTION 2.07 Extension of Revolving Facility Termination Date		20
ARTICLE III		21
SECTION 3.01 Base Facility Commitment		21
SECTION 3.02 Requests for Base Facility Advances		21
SECTION 3.03 Maturity Date of Base Facility Advances		21
SECTION 3.04 Interest on Base Facility Advances		21
SECTION 3.05 Coupon Rates for Base Facility Advances		21
SECTION 3.06 Base Facility Note		22
SECTION 3.07 Conversion of Commitment from Revolving Facility Commitment to Base Facility Commitment		22
SECTION 3.08 Limitations on Right to Convert		22
SECTION 3.09 Conditions Precedent to Conversion		22
SECTION 3.10 Defeasance		23
ARTICLE IV		30
SECTION 4.01 Rate Setting for an Advance		30
SECTION 4.02 Advance Confirmation Instrument for Revolving Advances		31
SECTION 4.03 Breakage and other Costs		32
ARTICLE V		32
SECTION 5.01 Initial Advance		32
SECTION 5.02 Future Advances		33
SECTION 5.03 Conditions Precedent to Future Advances		33
SECTION 5.04 Determination of Allocable Facility Amount and Valuations		34
ARTICLE VI		34
SECTION 6.01 Right to Add Collateral		34
SECTION 6.02 Procedure for Adding Collateral		34
SECTION 6.03 Conditions Precedent to Addition of an Additional Mortgaged Property to the Collateral Pool		36
ARTICLE VII		37
SECTION 7.01 Right to Obtain Releases of Collateral		37
SECTION 7.02 Procedure for Obtaining Releases of Collateral		37
SECTION 7.03 Conditions Precedent to Release of Collateral Release Property from the Collateral		38
SECTION 7.04 Substitutions		39
ARTICLE VIII		39
SECTION 8.01 Right to Increase Commitment		39
SECTION 8.02 Procedure for Obtaining Increases in Commitment		40

i

	Page
SECTION 8.03 Conditions Precedent to Increase in Commitment		40
ARTICLE IX		41
SECTION 9.01 Right to Complete or Partial Termination of Facilities		41
SECTION 9.02 Procedure for Complete or Partial Termination of Facilities		41
SECTION 9.03 Conditions Precedent to Complete or Partial Termination of Facilities		42
ARTICLE X		42
SECTION 10.01 Right to Terminate Credit Facility		42
SECTION 10.02 Procedure for Terminating Credit Facility		42
SECTION 10.03 Conditions Precedent to Termination of Credit Facility		43
ARTICLE XI		43
SECTION 11.01 Conditions Applicable to All Requests		43
SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request,
Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request		45
SECTION 11.03 Delivery of Property Related Documents		45
ARTICLE XII		46
SECTION 12.01 Representations and Warranties of the Borrower		46
SECTION 12.02 Representations and Warranties of the Borrower		50
SECTION 12.03 Representations and Warranties of the Lender		53
ARTICLE XIII		53
SECTION 13.01 Compliance with Agreements; No Amendments		53
SECTION 13.02 Maintenance of Existence		53
SECTION 13.03 Maintenance of REIT Status		53
SECTION 13.04 Financial Statements; Accountants’ Reports; Other Information		53
SECTION 13.05 Certificate of Compliance		56
SECTION 13.06 Maintain Licenses		56
SECTION 13.07 Access to Records; Discussions With Officers and Accountants		56
SECTION 13.08 Inform the Lender of Material Events		57
SECTION 13.09 Intentionally Omitted		58
SECTION 13.10 Inspection		58
SECTION 13.11 Compliance with Applicable Laws		58
SECTION 13.12 Warranty of Title		58
SECTION 13.13 Defense of Actions		58
SECTION 13.14 Alterations to the Mortgaged Properties		59
SECTION 13.15 ERISA		59
SECTION 13.16 Loan Document Taxes		59
SECTION 13.17 Further Assurances		60
SECTION 13.18 Monitoring Compliance		60
SECTION 13.19 Leases		60
SECTION 13.20 Appraisals		60
SECTION 13.21 Transfer of Ownership Interests of the Borrower		60
SECTION 13.22 Change in Senior Management		62
SECTION 13.23 Date Down Endorsements		62
SECTION 13.24 Geographical Diversification		62
SECTION 13.25 Ownership of Mortgaged Properties		62
ARTICLE XIV		63
SECTION 14.01 Other Activities		63
SECTION 14.02 Value of Security		63
SECTION 14.03 Zoning		63

ii

	Page
SECTION 14.04 Liens		63
SECTION 14.05 Sale		63
SECTION 14.06 Intentionally Omitted		63
SECTION 14.07 Principal Place of Business		64
SECTION 14.08 Intentionally Omitted		64
SECTION 14.09 Change in Property Management		64
SECTION 14.10 Condominiums		64
SECTION 14.11 Restrictions on Distributions		64
SECTION 14.12 Conduct of Business		64
SECTION 14.13 Limitation on Unimproved Real Property and New Construction		64
SECTION 14.14 No Encumbrance of Collateral Release Property		64
ARTICLE XV		64
SECTION 15.01 Financial Definitions		65
SECTION 15.02 Compliance with Debt Service Coverage Ratios		69
SECTION 15.03 Compliance with Loan to Value Ratios		69
SECTION 15.04 Compliance with Concentration Test		69
SECTION 15.05 Consolidated Adjusted Tangible Net Worth		69
SECTION 15.06 Consolidated Funded Debt Ratio		69
SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio		69
SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio		69
SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio		69
ARTICLE XVI		70
SECTION 16.01 Standby Fee		70
SECTION 16.02 Origination Fees		70
SECTION 16.03 Due Diligence Fees		70
SECTION 16.04 Legal Fees and Expenses		70
SECTION 16.05 MBS Related Costs		71
SECTION 16.06 Failure to Close any Request		71
SECTION 16.07 Other Fees		71
ARTICLE XVII		72
SECTION 17.01 Events of Default		72
ARTICLE XVIII		74
SECTION 18.01 Remedies; Waivers		74
SECTION 18.02 Waivers; Rescission of Declaration		74
SECTION 18.03 The Lender’s Right to Protect Collateral and Perform Covenants and Other Obligations		74
SECTION 18.04 No Remedy Exclusive		75
SECTION 18.05 No Waiver		75
SECTION 18.06 No Notice		75
SECTION 18.07 Application of Payments		75
ARTICLE XIX		75
SECTION 19.01 Special Pool Purchase Contract		75
SECTION 19.02 Assignment of Rights		75
SECTION 19.03 Release of Collateral		76
SECTION 19.04 Replacement of Lender		76
SECTION 19.05 Fannie Mae and Lender Fees and Expenses		76
SECTION 19.06 Third Party Beneficiary		76
ARTICLE XX		76

iii

	Page
SECTION 20.01 Insurance and Real Estate Taxes		76
SECTION 20.02 Replacement Reserves		76
ARTICLE XXI		77
ARTICLE XXII		77
SECTION 22.01 Personal Liability of the Borrower		77
ARTICLE XXIII		77
SECTION 23.01 Counterparts		77
SECTION 23.02 Amendments, Changes and Modifications		77
SECTION 23.03 Payment of Costs, Fees and Expenses		78
SECTION 23.04 Payment Procedure		78
SECTION 23.05 Payments on Business Days		78
SECTION 23.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial		79
SECTION 23.07 Severability		80
SECTION 23.08 Notices		80
SECTION 23.09 Further Assurances and Corrective Instruments		82
SECTION 23.10 Term of this Agreement		83
SECTION 23.11 Assignments; ThirdParty Rights		83
SECTION 23.12 Headings		83
SECTION 23.13 General Interpretive Principles		83
SECTION 23.14 Interpretation		83
SECTION 23.15 Decisions in Writing		83
SECTION 23.16 Requests		83

iv

EXHIBIT A	-	Schedule of Initial Mortgaged Properties and Initial Valuations
EXHIBIT B	-	Base 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	-	Revolving Facility Note
EXHIBIT J	-	Tie-In Endorsement
EXHIBIT K	-	Conversion Request
EXHIBIT L	-	Conversion Amendment
EXHIBIT M	-	Rate Setting Form
EXHIBIT N	-	Rate Confirmation Instrument
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	-	Revolving Facility Termination Request
EXHIBIT X	-	Revolving Facility Termination Document
EXHIBIT Y	-	Credit Facility Termination Request
EXHIBIT Z		Intentionally Omitted
EXHIBIT AA	-	Independent Unit Encumbrances

v

MASTER CREDIT FACILITY AGREEMENT

     THIS MASTER CREDIT FACILITY AGREEMENT is made as of the 14^th day of August, 2001 by (i) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (ii) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company (“UDRT-NC”), (iii) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership (“South West”), (iv) LA PRIVADA APARTMENTS, L.L.C., an Arizona limited liability company (“La Privada”) (individually and collectively, UDRT, UDRT-NC, South West and La Privada, the “Borrower”), and (v) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (the “Lender”).

RECITALS

     A. The Borrower owns one or more Multifamily Residential Properties (capitalized terms used but not defined shall have the meanings ascribed to such terms in Article I of this Agreement) as more particularly described in Exhibit A to this Agreement.

     B. The Borrower has requested that the Lender establish a $138,875,000 Credit Facility in favor of the Borrower, comprised initially of a $138,875,000.00 Revolving Facility, all or part of which can be converted to a Base Facility in accordance with, and subject to, the terms and conditions of this Agreement and a $0 Base Facility.

     C. To secure the obligations of the Borrower under this Agreement and the other Loan Documents issued in connection with the Credit Facility, the Borrower shall create a Collateral Pool in favor of the Lender. The Collateral Pool shall be comprised of (i) Security Instruments on all of the Multifamily Residential Properties owned by the Borrower listed on Exhibit A to this Agreement and (ii) any other Security Documents executed by the Borrower pursuant to this Agreement or any other Loan Documents.

     D. Each of the Security Documents shall be cross-defaulted (i.e., a default under any Security Document, or under this Agreement, shall constitute a default under each Security Document, and this Agreement) and cross-collateralized (i.e., each Security Instrument shall secure all of the Borrower’s obligations under this Agreement and the other Loan Documents issued in connection with the Credit Facility) and it is the intent of the parties to this Agreement that the Lender may accelerate any Note without the necessity to accelerate any other Note and that in the exercise of its rights and remedies under the Loan Documents, Lender may 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.

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     E. 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 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 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 Revolving Advance or a Base Facility Advance.

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

     “Affiliate” means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “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 for the Trailing 12 Month Period” means, for any specified date, the ratio (expressed as a percentage) of—

(a) the Advances Outstanding on the specified date,

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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. Lender shall determine the Allocable Facility Amount for each Mortgaged Property on the Initial Closing Date and on or before September 1 of each year (commencing September 1, 2002) during the term of this Agreement and at such other times as provided by this Agreement (the “Determination Date”). Once determined by Lender as aforesaid, the Allocable Facility Amount for each Mortgaged Property shall be promptly disclosed to Borrower by Lender and shall remain in effect until the next Determination Date. The Allocable Facility Amount for any Additional Mortgaged Property shall be 55% of the Valuation of such Mortgaged Property on the date such Mortgaged Property is added to the Collateral Pool.

     “Amortization Period” means, with respect to each Base Facility Advance, the period of 30 years.

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

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

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

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

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

     “Base Facility Availability Period” means the period beginning on the Initial Closing Date and ending on the date five (5) years after the Initial Closing Date.

     “Base Facility Commitment” means $0, plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Articles III or VIII.

     “Base Facility Fee” means (i) 32 basis points for a Base Facility Advance drawn from the Base Facility Commitment initially available under this Agreement or converted from the Revolving Commitment during the period ending on the date 12 months after the Initial Closing Date, and (ii) for any Base Facility Advance drawn from any portion of the Base Facility Commitment increased under Article VIII or converted from any portion of the Revolving Commitment after the period ending on the date 12 months after the Initial Closing Date, the number of basis points determined at the time of such increase by the Lender as the Base Facility Fee for such Base Facility Advances, provided that in no event shall the Base Facility Fee for Base Facility Advances converted from the Revolving Commitment (expressed as a number of basis points) exceed the Revolving Facility Fee.

     “Base 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 Base Facility Advance, to evidence the Borrower’s obligation to repay the Base Facility Advance.

     “Borrower” means, individually and collectively, United Dominion Realty Trust, Inc., a Virginia corporation, UDRT of North Carolina, L.L.C., a North Carolina limited liability company, South West Properties, L.P., a Delaware limited partnership, and La Privada Apartments, L.L.C., an Arizona limited liability company.

     “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 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 UDRT shall cease for any reason to be the holder, directly or indirectly, of at least 70% of the voting interests of any other Borrower or to own, directly or indirectly at least 70% of the equity, profits or other partnership interest in, or Voting Equity Capital (or any other Securities or ownership interests) of any other Borrower, (b) the date on which an Acquiring

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Person or Acquiring Persons becomes (by acquisition, consolidation, merger or otherwise), directly or indirectly, the beneficial owner of more than, in the aggregate, 30% of the total Voting Equity Capital (or of any other Securities or ownership interest) of the 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 Borrower 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 Borrower 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 (c) 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 any of the Borrower’s obligations under the Loan Documents.

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

     (i) 75 basis points, multiplied by

     (ii) 55% of the Initial Valuation of the Multifamily Residential Property, as determined by the Lender.

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

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

     “Commitment” means, at any time, the sum of the Base Facility Commitment and the Revolving Facility Commitment.

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     “Complete Revolving 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) hereof.

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

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

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

          (a) The Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period is not less than 155%.

          (b) The Aggregate Loan to Value Ratio for the Trailing 12 Month Period does not exceed 55%.

     “Credit Facility” means the Base Facility and the Revolving 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 Revolving Facility Note or the Base 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 Request” shall have the meaning set forth in Section 10.02(a).

     “Debt Service Coverage Ratio for the Trailing 12 Month Period” 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 Trailing 12 Month Period for the subject Mortgaged Property

to

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(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 Revolving Advance, an amount equal to the excess of —

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

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

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

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

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

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

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

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

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

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

(b) the amount of the Standby Fees 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 the Revolving Facility Commitment pursuant to Articles IX or X, an amount equal to the product obtained by multiplying—

(1)	the reduction in the Revolving Facility Commitment, by
(2)	the Revolving Facility Fee in effect at such time, by
(3)	the present value factor calculated using the following formula:

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

[r = Yield Rate

n = the number of years, and any fraction thereof, remaining between the Closing Date for the reduction in the Revolving Facility Commitment and the Revolving Facility Termination Date]

The “Yield Rate” means the rate on the Three-Month LIBOR on the second Business Day preceding, as applicable, (x) the date of the reduction in the Commitment, (y) the date of the Complete Facility Termination or (z) the date of Lender’s acceleration of the unpaid principal balance of the Facility Note.

     “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. (S) 1716 et seq.

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

     “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.

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     “Geographical Diversification Requirements” means, prior to the occurrence of an increase in the Commitment pursuant to Article VIII, a requirement that the Collateral Pool consist of at least four (4) Mortgaged Properties located in at least two (2) SMSA’s and, upon the occurrence of any increase in the Commitment pursuant to Article VIII, such requirements as to the geographical diversity of the Collateral Pool as the Lender may reasonably determine and notify Borrower of prior to the time of the increase.

     “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 determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide, except that for these purposes the financial statements to be used need not be audited and paragraph (b) of such paragraph 3 shall be taken into account in the Lender’s discretion.

     “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.

     “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.

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     “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 current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices);

               (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 Commonwealth of Virginia) issued or created for the account of such Person;

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

               (f) as to any Person (“guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of a primary obligation (as defined below) with respect to which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing, or in effect guaranteeing, any indebtedness, lease, dividend or other obligation (“primary obligations”) of any third person (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, to (1) purchase any such primary obligation or any property constituting direct or indirect security therefor, (2) advance or supply funds for the purchase or payment of any such primary obligation or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (3) purchase property, securities or services 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

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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 Revolving Advance made on the Initial Closing Date in the amount of $138,875,000.00.

     “Initial Advance Request” shall have the meaning set forth in Section 5.01.

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

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

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

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

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

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

     “Lease” means any lease, any sublease or subsublease, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Mortgaged Property, and every 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, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or

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notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

     “Loan Documents” means this Agreement, the Notes, the Advance Confirmation Instruments for the Revolving 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 for the Trailing 12 Month Period” means, for a Mortgaged Property, for any specified date, the ratio (expressed as a percentage) of —

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

to

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

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

     “Material Adverse Effect” means, with respect to any circumstance, act, condition or event of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, or circumstance or circumstances, whether or not related, a material adverse change in or a materially adverse effect upon any of (a) the business, operations, property or condition (financial or otherwise) of the Borrower, (b) the present or future ability of the Borrower to perform the Obligations for which it is liable, (c) the validity, priority, perfection or enforceability of this Agreement or any other Loan Document or the rights or remedies of the Lender under any Loan Document, or (d) the value of, or the Lender’s ability to have recourse against, any Mortgaged Property.

     “MBS” means a mortgage-backed security which is “backed” by an Advance which is secured 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.

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     “MBS Pass-Through Rate” for a Base 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 Base Facility Advance as determined in accordance with Section 4.01.

     “Mortgaged Properties” means, collectively, the Additional 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 Sections 201 and 203 of Part III of the DUS Guide.

     “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 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 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.

     “Note” means a Base Facility Note or the Revolving Facility Note.

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

     “Operating Expenses” means, for any period, with respect to any Multifamily Residential Property, all expenses in respect of the Multifamily Residential Property, as determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide (Estimated Expenses), including replacement reserves, if any, under the Replacement Reserve Agreements for the Mortgaged Properties.

     “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.

     “Outstanding” means, when used in connection with promissory notes, other debt instruments or Advances, for a specified date, promissory notes or other debt instruments

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which have been issued, or Advances which have been made, but have not been repaid in full as of the specified date.

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

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

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

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

     “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 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).

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

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

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     “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 Release Request, a Conversion Request, a Credit Facility Expansion Request, a Credit Facility Termination Request, a Future Advance Request, an Initial Advance Request or a Revolving Facility Termination Request.

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

     “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.

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

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

     “Revolving Facility Commitment” means an aggregate amount of $138,875,000.00 which shall be evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     “Revolving Facility Fee” means (i) 52 basis points per annum for a Revolving Advance drawn from the Revolving Commitment initially available under this Agreement, (ii) for any extended term of the Revolving Facility, the number of basis points per annum determined by the Lender as the Revolving Facility Fee for such period, which fee shall be set by Lender not less than 30 days prior to the commencement of such period, and (iii) for any Revolving Advance drawn from any portion of the Revolving Commitment increased under Article VIII, the number of basis points per annum determined at the time of such increase by the Lender as the Revolving Facility Fee for such Revolving Advances.

     “Revolving 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 Revolving Advances.

     “Revolving Facility Termination Date” means the last day of the fifth Loan Year, as such date may be extended pursuant to Section 2.07 of this Agreement.

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     “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 Replacement Reserve Agreements and any other documents executed by a Borrower from time to time to secure any of 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 UDRT, and (ii) any other individuals with responsibility for any of the functions typically performed in a corporation by the officers described in clause (i).

     “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 product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by (iii) the Unused Capacity for such month.

     “Subsidiary” means, as to any Person, any corporation, partnership, limited liability company or other entity of which securities or other ownership interest having an ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. Unless otherwise provided, references to a “Subsidiary” or “Subsidiaries” shall mean a Subsidiary or Subsidiaries of the Borrower.

     “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.

     “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 Base Facility Advances are Outstanding, the latest maturity date for any Base Facility Advance Outstanding, and, at any

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time during which Base Facility Advances are not Outstanding, the Revolving Facility Termination Date.

     “Three-Month LIBOR” 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 the 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 source reasonably selected by Lender which reasonably correlates (as to rate and volatility) historically to Three-Month LIBOR.

     “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 Corporation.

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

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

     “Transfer” means 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. “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 the undrawn amount of the Commitment available under this Agreement, 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

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

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

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

Notwithstanding the foregoing, any Valuation for a Multifamily Residential Property calculated for a date occurring before the first anniversary of the date on which the Multifamily Residential Property becomes a part of the Collateral Pool shall equal the Appraised Value of such Multifamily Residential Property, unless the Lender determines that changed market or property conditions warrant that the value be determined as set forth in the preceding sentence. Any special risk factors taken into account in connection with the Initial Valuation of a Multifamily Residential Property shall apply to any subsequent Valuation of such Multifamily Residential Property unless Lender shall determine that such special risk factor no longer applies to such Multifamily Residential Property.

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

ARTICLE II
THE REVOLVING FACILITY COMMITMENT

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

SECTION 2.02 Requests for Revolving Advances. The Borrower shall request a Revolving Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

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

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

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     (b) no later than the date which completes nine full months after the Closing Date for the Revolving 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 or February 29 in 2000 and any leap year thereafter.

SECTION 2.04 Interest on Revolving Facility Advances.

          (a) Discount. Each Revolving Advance shall be a discount loan. The original stated principal amount of a Revolving Advance shall be the sum of the Price of the Revolving Advance and the Discount of the Revolving Advance. The Price and Discount of each Revolving Advance shall be determined in accordance with the procedures set out in Section 4.01. The proceeds of the Revolving Advance made available by the Lender to the Borrower will equal the Price of the Revolving Advance. The entire unpaid principal of each Revolving Advance shall be due and payable by the Borrower to the Lender on the maturity date of the Revolving Advance. However, if the Borrower has requested that the maturing Revolving Advance (in whole or in part) be renewed with a new Revolving Advance or converted to a Base Facility Advance, to take effect on the maturity date of the maturing Revolving Advance, then the amount the Borrower is required to pay on account of the maturing Revolving Advance will be reduced by, as the case may, that amount of the Price of the new Revolving Advance allocable to the principal of the maturing Revolving Advance being renewed, or that amount of the net proceeds of the MBS related to the Base Facility Advance then converted from the maturing Revolving Advance.

          (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Borrower shall pay interest on the original stated principal amount of the Revolving Advance for the partial month period commencing on the Closing Date for the Revolving 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 Revolving Advance as determined in accordance with Section 2.05(b) and (ii) a rate reasonably determined by the Lender, based on the Lender’s cost of funds and approved in advance, in writing, by the Borrower, pursuant to the procedures mutually agreed upon by the Borrower and the Lender.

          (c) Revolving Facility Fee. In addition to paying the Discount and the partial month interest, if any, the Borrower shall pay monthly installments of the Revolving Facility Fee to the Lender on account of each Revolving Advance over the whole number of calendar months the MBS backed by the Revolving Advance is to run from the MBS Issue Date to the maturity date of the MBS. The Revolving Facility Fee shall be payable in advance, in accordance with the terms of the Revolving Facility Note. The first installment shall be payable on or prior to the Closing Date for the Revolving Advance and shall apply to the first full calendar month of the MBS backed by the Revolving 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 Revolving Facility Fee shall be in an amount equal

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to the product of multiplying (i) the Revolving Facility Fee, by (ii) the amount of the Revolving Advance, by (iii) 1/12.

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

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

          (b) Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Coupon Rate for such Revolving Advance for such period shall be the greater of (i) the rate for the Revolving 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 Revolving Facility Note. The obligation of the Borrower to repay the Revolving Advances will be evidenced by the Revolving Facility Note. The Revolving Facility Note shall be payable to the order of the Lender and shall be made in the aggregate amount of the Revolving Facility Commitment.

SECTION 2.07 Extension of Revolving Facility Termination Date. The Borrower shall have the right to extend the Revolving Facility Termination Date for one (1) five (5) year period upon satisfaction of each of the following conditions:

          (a) The Borrower provides written notice to the Lender not less than thirty (30) nor more than ninety (90) days prior to the then effective Revolving Facility Termination Date requesting that the Revolving Facility Termination Date be extended.

          (b) No Event of Default or Potential Event of Default exists on either the date the notice required by paragraph (a) of this Section is given or on the then effective Revolving Facility Termination Date.

          (c) 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

          (d) The relevant 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

Upon receipt of the notice required in paragraph (a) of this Section and upon compliance with the other conditions set forth above, the Revolving Facility Termination Date shall be extended for five

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(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 Revolving Facility during the period after the then effective Revolving Facility Termination Date shall be acceptable to Lender in its discretion.

ARTICLE III
THE BASE FACILITY COMMITMENT

SECTION 3.01 Base Facility Commitment. Subject to the terms, conditions and limitations set forth in this Article, the Lender agrees to make Base Facility Advances to the Borrower from time to time during the Base Facility Availability Period. The aggregate original principal of the Base Facility Advances shall not exceed the Base Facility Commitment. The borrowing of a Base Facility Advance shall permanently reduce the Base Facility Commitment by the original principal amount of the Base Facility Advance. The Borrower may not re-borrow any part of the Base Facility Advance which it has previously borrowed and repaid.

SECTION 3.02 Requests for Base Facility Advances. The Borrower shall request a Base Facility Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

SECTION 3.03 Maturity Date of Base Facility Advances. The maturity date of each Base Facility Advance shall be the maturity date selected by the Borrower at the time of the making of each such Base Facility Advance, provided that such maturity date shall not be later than the 10th anniversary of the Initial Closing Date.

SECTION 3.04 Interest on Base Facility Advances.

     (a) Advances. Each Base Facility Advance shall bear interest at a

     rate, per annum, equal to the sum of (i) the MBS Pass-Through Rate determined for such Base Facility Advance and (ii) the Base Facility Fee.

     (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Base Facility Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Base Facility Advance is the first day of the month following the month in which the Base Facility Advance is made, the Borrower shall pay interest on the original stated principal amount of the Base Facility Advance for the partial month period commencing on the Closing Date for the Base 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 Base Facility Advance described in the first sentence of this Section and (ii) a rate reasonably 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 Base Facility Advances. The Coupon Rate for a Base Facility Advance shall be the rate of interest applicable to such Base Facility Advance pursuant to Section 3.04.

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

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

     (a) Request. In order to convert all or a portion of the Revolving Facility Commitment to the Base 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 Revolving Advances Outstanding which will be prepaid on or before the Closing Date for the conversion as required by Section 3.08(c).

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

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

     (b) Minimum Request. Each Request for a conversion shall be in the minimum amount of $10,000,000.

     (c) Obligation to Prepay Revolving Advances. If, after the conversion, the aggregate unpaid principal balance of all Revolving Advances Outstanding will exceed the Revolving Facility Commitment, the Borrower shall be obligated to prepay, as a condition precedent to the conversion, an amount of Revolving 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 Revolving Facility Commitment to the Base Facility Commitment is subject to the satisfaction of the following conditions precedent on or before the Closing Date:

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     (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 Revolving 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 Revolving 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. If at any time the Borrower elects to convert all or a portion of the Revolving Facility Commitment to a Base Facility Commitment pursuant to Section 3.07 of this Agreement, or elects that any portion of any expansion of the Commitment shall be a Base Facility Commitment, the Conversion Request or the Credit Facility Expansion Request for the first Base Facility Commitment shall select defeasance or yield maintenance with respect to prepayments of Base Facility Advances. 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 Base Facility Commitment shall apply to all Base Facility Advances during the term of this Agreement. Base Facility Advances are not prepayable at any time, provided that, notwithstanding the foregoing, Borrower may prepay any Base Facility Advance during the last one hundred eighty (180) days of the term of such Base Facility Advance and provided that Base Facility Advances may be defeased pursuant to the terms and conditions of this Section. This Section 3.10 shall not apply to Mortgaged Properties released from a Security Instrument in connection with a substitution of Collateral pursuant to Section 7.04 of this Agreement.

     (a) Conditions. Subject to Section 3.10(d), 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 Borrower’s assets [except the Substitute Collateral] shall be released) upon the satisfaction of all of the following conditions:

     (1) Defeasance Notice. 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 Borrower desires to consummate the Defeasance. The Defeasance Closing Date specified by 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.

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Borrower shall also specify in the Defeasance Notice the name, address and telephone number of Borrower for notices pursuant to Section 3.10(g)(4). The form Defeasance Notice provided by Lender specifies: (i) which Mortgaged Properties Borrower proposes 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 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 Borrower and received by Lender no later than the date and time when Lender receives the Defeasance Notice from 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 acceptable to Lender, Lender shall, with reasonable promptness, notify Borrower of such confirmation by signing the Defeasance Notice, attaching the Annual Yields for the Mortgage Payments beginning on the first day of the second calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date (if a Fannie Mae Investment Security is offered as Substitute Collateral) and transmitting the signed Defeasance Notice to Borrower pursuant to Section 3.10(g)(4). If, after Lender has notified 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 Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.

     (3) Substitute Collateral. On or before the Defeasance Closing Date, 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 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 Base Facility Note subject to Defeasance. If the Substitute Collateral is issued in a certificated form and Borrower has possession of the certificate, the certificate shall be endorsed (either on the certificate or on a separate writing attached thereto) by 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 Borrower does not have possession of the certificate, 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,

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

     (5) Amounts Payable by Borrower. On or before the Defeasance Closing Date, 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 Base Facility Note subject to Defeasance, the Security Instruments related to the Mortgaged Properties to be released; and

     (C) all costs and expenses incurred by Lender or Servicer in connection with the Defeasance, including the reasonable 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., Washington, D.C. time, on the Defeasance Closing Date, 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 Borrower’s agent.

     (7) Covenants, Representations and Warranties. On the Defeasance Closing Date, all of the covenants of the relevant 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 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 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;

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

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

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

     (c) Release. Upon Borrower’s compliance with the requirements of Sections 3.10(a)(1) through (7), 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 Borrower’s assets [except the Substitute Collateral] shall be released). Lender shall, with reasonable promptness, execute and deliver to Borrower, at Borrower’s cost and expense, any additional documents reasonably requested by 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. 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 Base 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.

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     (e) Assignment and Assumption. Upon Borrower’s compliance with the requirements of Section 3.10(a), Borrower shall assign all its obligations and rights under the relevant Base 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 Borrower and acceptable to Lender in its sole discretion. 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 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 Borrower under the relevant Base Facility Note, and (iii) the release by Lender of Borrower from all liabilities and obligations under the relevant Base Facility Note. Lender shall, at Borrower’s request and expense, execute and deliver releases, reconveyances and security interest terminations with respect to the released Mortgage Properties and all other collateral held by Lender (except the Defeasance Deposit). The Assignment and Assumption Agreement shall be executed by Lender with a counterpart to be returned by Lender to 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 Borrower for use as the Substitute Collateral, 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 Borrower timely pays the Defeasance Commitment Fee, and Lender and Borrower timely transmit a signed facsimile copy of the Defeasance Notice pursuant to Section 3.10(a)(2), but 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 Borrower’s default, as Lender’s sole and exclusive remedy, and, except as provided in Section 3.10(g)(2), Borrower shall be released from all further obligations under this Section 3.10. Borrower acknowledges that, from and after the date on which Lender has executed the Defeasance Notice under Section 3.10(a)(2) and 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. 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 Borrower’s default.

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

     (4) Notice. The Defeasance Notice delivered pursuant to this Section 3.10(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, 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. Washington, D.C. 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(R) (or in an alternative electronic format) at 2:00 p.m. Washington, D.C. 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(R) 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.

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     (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 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 Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date, if the Successor Borrower is designated by Borrower under Section 3.10(e), or one percent (1%) of the aggregate unpaid principal balance of the Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date if the Successor Borrower is designated by Lender under Section 3.10(e). No Defeasance Commitment Fee will be applicable if U.S. Treasury Securities are specified in the Defeasance Notice as the applicable Investment Security.

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

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

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 Base 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 180th 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:

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     (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 Base Facility Note subject to Defeasance during the period beginning on the first day of the second calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date, and the amount that would constitute the aggregate unpaid principal balance of the Base 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 Base 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 Base 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 Base Facility Note subject to Defeasance.

     (13) The term “Stated Maturity Date” means the Maturity Date specified in the Base Facility Note subject to Defeasance determined without regard to Lender’s exercise of any right of acceleration of the Base 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 pro+posed Base Facility Advance) or MBS Imputed Interest Rate (for a proposed Revolving Advance) for a Fannie Mae MBS backed by a proposed Advance. The Lender’s quote shall be based on (i) a solicitation of at

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least three (3) 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 Base Facility Advance) or MBS Imputed Interest Rate (for a Revolving 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. Washington, D.C. time on any Business Day (“Rate Setting Date”). The Rate Setting Form contains various factual certifications required by the Lender and specifies:

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

     (ii) for a Base Facility Advance, the amount, term, MBS Issue Date, Base Facility Fee, Maximum Annual Coupon Rate, Price (which will be in a range between 99-1/2 and 100-1/2), Yield Maintenance Period, if applicable, Yield Rate Security, if applicable, Amortization Period 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 Revolving Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving Facility Fee, Coupon Rate, Discount, Price, and Closing Date for the Advance; and

     (ii) for a Base Facility Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Pass-Through Rate, Base 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 Revolving Advances. On or before the Closing Date for a Revolving Advance, the Borrower shall execute and deliver to the Lender an instrument (“Advance Confirmation Instrument”), in the form attached as Exhibit O to this Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving 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 Revolving Advance, the Lender shall note the date of funding in the appropriate space at the foot of the Advance Confirmation Instrument and

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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 Revolving Advances in accordance with the Advance Confirmation Instrument, the Revolving Facility Note or the other Loan Documents, but is merely meant to facilitate evidencing the date of funding and to confirm that the Advance Confirmation Instrument is not effective until the date of funding.

SECTION 4.03 Breakage and other Costs. In the event that the Lender obtains an MBS Commitment and the Lender fails to fulfill the MBS Commitment because the Advance is not made (for a reason other than the default of the Lender to make the Advance or the failure of the purchaser of the MBS to purchase such MBS), the Borrower shall pay all breakage and other 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.

ARTICLE V
MAKING THE ADVANCES

SECTION 5.01 Initial Advance. The Borrower may make a request (“Initial Advance Request”) for the Lender to make the Initial Advance. If all conditions contained in this Section are satisfied on or before the Closing Date for the Initial Advance, the Lender shall make the Initial Advance on the Initial Closing Date or on another date selected by the Borrower and approved by the Lender. The obligation of the Lender to make the Initial Advance is subject to the following conditions precedent:

          (a) Receipt by the Lender of the Initial Advance Request;

          (b) [Intentionally Deleted]

          (c) The delivery to the Title Company, for filing and/or recording in all applicable jurisdictions, of all applicable Loan Documents required by the Lender, including duly executed and delivered original copies of the Revolving Facility Note, a Base Facility Note, the Initial Security Instruments covering the Initial Mortgaged Properties and UCC-1 Financing Statements covering the portion of the Collateral comprised of personal property, and other appropriate instruments, in form and substance satisfactory to the Lender and in form proper for recordation, as may be necessary in the opinion of the Lender to perfect the Liens created by the applicable Security Instruments and any other Loan Documents 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 the Advance is a Revolving Advance, the receipt by the Lender of the first installment of Revolving Facility Fee for the Revolving Advance and the entire Discount for the Revolving Advance payable by the Borrower pursuant to Section 2.04;

          (e) The receipt by the Lender of the Initial Origination Fee pursuant to Section 16.02(a), the Initial Due Diligence Fee pursuant to Section 16.03(a) to the extent calculated by Lender at such time (any portion of the Initial Due Diligence Fee not paid by the Borrower on the

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Initial Closing Date shall be paid promptly upon demand by Lender), all legal fees and expenses payable pursuant to Section 16.04(a) and all legal fees and expenses payable in connection with the Initial Advance pursuant to Section 16.04(b); and

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

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 Lender’s receipt of the Future Advance Request and 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.

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 Base Facility Advance, delivery of a Base Facility Note, duly executed by the Borrower, in the amount of the Advance, reflecting all of the terms of the Base Facility Advance;

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

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

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

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

SECTION 5.04 Determination of Allocable Facility Amount and Valuations.

     (a) Initial Determinations. On the Initial Closing Date, Lender shall determine (i) the Allocable Facility Amount and Valuation for each Mortgaged Property and (ii) the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period. The determinations made as of the Initial Closing Date shall remain unchanged until the first anniversary of the Initial Closing Date.

     (b) Monitoring Determinations. (i) Once each Calendar Quarter or, if the Commitment consists only of a Base Facility Commitment, once each Calendar Year, within twenty (20) Business Days after Borrower has delivered to Lender the reports required in Section 13.04, Lender shall determine the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period with the other covenants set forth in the Loan Documents, and whether the Borrower is in compliance, (ii) After the first anniversary of the Initial Closing Date, on an annual basis, and if Lender reasonably decides that changed market or property conditions warrant, Lender shall determine Allocable Facility Amounts and Valuations, (iii) Lender shall also redetermine Allocable Facility Amounts to take account of any addition, release or substitution of Collateral or other event which invalidates the outstanding determinations.

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 once each Calendar Quarter, 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 Multifamily Residential 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

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          (ii) The payment of all Additional Collateral Due Diligence Fees pursuant to Section 16.03(b) to the extent calculated by Lender at such time (any portion of any Additional Collateral Due Diligence Fee not paid by Borrower with the Collateral Additional Request shall be paid promptly upon demand by Lender).

          (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 (A) the Aggregate Debt Service Coverage Ratios for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period applicable to the Collateral Pool, and (B) the Debt Service Coverage Ratio for the Trailing 12 Month Period and the Loan to Value Ratio for the Trailing 12 Month Period applicable to the proposed Additional Property on the basis of the lesser of (i) 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. Within 30 days after receipt of (i) the Collateral Addition Request for the 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 for the Trailing 12 Month Period which it estimates shall result from the addition of the proposed Additional Mortgaged Property to the Collateral Pool. If the Lender declines to consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Lender shall include, in its notice, a brief statement of the reasons for doing so. Within five Business Days after receipt of the Lender’s notice that it shall consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower shall notify the Lender whether or not it elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool. If the Borrower fails to respond within the period of five Business Days, it shall be conclusively deemed to have elected not to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool.

          (d) Closing. If, pursuant to subsection (c), the Lender consents to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower timely elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool and all conditions contained in Section 6.03 are satisfied, the Lender shall permit the proposed Additional Mortgaged Property to be added to the Collateral Pool, at a closing to be 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), provided that in any Calendar Quarter, the Closing Date for any addition of an Additional Mortgaged Property to the Collateral Pool shall be on the same day as the Closing Date of any release or substitution pursuant to Article VII of this Agreement and any increase in the Credit Facility pursuant to Article VIII of this Agreement.

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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) If the Additional Mortgaged Property is being added to the Collateral Pool prior to the first anniversary of the Initial Closing Date, the Coverage and LTV Tests will be satisfied;

     (b) If the Additional Mortgaged Property is being added to the Collateral Pool after the first anniversary of the Initial Closing Date, the proposed Additional Mortgaged Property has a Debt Service Coverage Ratio for the Trailing 12 Month Period of not less than 155% and a Loan to Value Ratio for the Trailing 12 Month Period of not more than 55% 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;

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

     (d) 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;

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

     (f) 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

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

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ARTICLE VII
RELEASES OF COLLATERAL

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

SECTION 7.02 Procedure for Obtaining Releases of Collateral.

     (a) Request. In order to obtain a release of Collateral from the Collateral Pool, the Borrower may 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 Revolving 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, provided that in any Calendar Quarter, the Closing Date for any release shall be on the same day as the Closing Date of any addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement or any increase in the Credit Facility pursuant to Article VIII of this Agreement), 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 and reasonably satisfactory to the Title Company for releases in the jurisdiction governing the perfection of the security interest being released, releasing the applicable Security Instrument as a Lien on the Collateral Release Property, and UCC-3 Termination Statements terminating the UCC-1 Financing Statements perfecting a Lien on the portion of the Collateral Release Property comprised of personal property and such other documents and instruments as the Borrower may reasonably request evidencing the release of the applicable Collateral from any lien securing the Obligations (including a termination of any restriction on the use of any accounts relating to the Collateral Release Property) and the release and return to the Borrower of any and all escrowed amounts relating thereto. The instruments referred to in the preceding sentence are referred to in this Article as the “Collateral Release Documents.”

     (c) Release Price. The “Release Price” for each Mortgaged Property other than Mortgaged Properties released from a Security Instrument in connection with a Substitution of Collateral pursuant to Section 7.04 of this Agreement means 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

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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 Revolving Advances Outstanding until there are no further Revolving 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 Base Facility Advances, so long as the prepayment is permitted under the Base Facility Note for the Base 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, Revolving 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 Revolving Advances are due and payable, at which time the Lender shall apply the amounts held by it to the amounts of the Revolving Advances due and payable.

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

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

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

          (c) Receipt by the Lender of 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 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

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

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

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

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

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

          (k) Notwithstanding the other provisions of this Section 7.03, no release of any of the Mortgaged Properties shall be made unless the Borrower has provided title insurance to Lender in respect of each of the remaining Mortgage Properties in the Collateral Pool in an amount equal to 150% of the Initial Value of each such Mortgaged Property.

SECTION 7.04 Substitutions. Subject to the terms, conditions and limitations of Articles VI and VII and provided that the Valuation of the Multifamily Residential Property sought to be added to the Collateral Pool equals or exceeds the Valuation of the Mortgaged Property sought to be released from the Collateral Pool, the Borrower may simultaneously add a Multifamily Residential Property to the Collateral Pool and release a Mortgaged Property from the Collateral Pool, thereby effecting a substitution of Collateral, provided that Sections 7.02(c), 7.02(d) and 7.03(b) shall not apply to a substitution of Collateral.

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 to increase the Base Facility Commitment, the

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Revolving Facility Commitment, or both. The Borrower’s right to increase the Commitment is subject to the following limitations:

          (a) Commitment. After giving effect to the proposed increase, the Commitment (without regard to the actual amount of Revolving Advances Outstanding, but taking into account the aggregate original principal amount of all Base Facility Advances made under this Agreement to the Closing Date) shall not exceed $200,000,000.

          (b) Minimum Request. Each Request for an increase in the Commitment shall be in the minimum amount of $10,000,000.

          (c) Terms and Conditions. The terms and conditions of this Agreement shall apply to any increase in the Commitment.

SECTION 8.02 Procedure for Obtaining Increases in Commitment.

          (a) Request. In order to obtain an increase in the Commitment, the Borrower shall deliver a written request for an increase (a “Credit Facility Expansion Request”) to the Lender, in the form attached as Exhibit V to this Agreement. Each Credit Facility Expansion Request shall be accompanied by the following:

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

          (ii) A designation of the increase in the Base Facility Credit Commitment and the Revolving Facility Credit Commitment;

          (iii) A request that the Lender inform the Borrower of any change in the Geographical Diversification Requirements; and

          (iv) A request that the Lender inform the Borrower of the Base Facility Fee and the Revolving 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), provided that in any Calendar Quarter the Closing Date for addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement and any increase of the Credit Facility shall be on the same day as the Closing Date for any release or substitution pursuant to Article VII of this Agreement.

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;

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     (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) and other exceptions approved by the Lender, together with any reinsurance agreements required by the Lender;

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

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

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

ARTICLE IX
COMPLETE OR 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 Revolving Facility Commitment and the Base 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 Revolving Facility Commitment (other than in connection with a conversion of all or a portion of the Revolving Loan Commitment to a Base Facility Commitment, which reduction shall be automatic) or the Base 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 Revolving Facility Commitment to $0 shall be referred to as a “Complete Revolving Facility Termination.” A permanent reduction of the Base Facility Commitment to $0 shall be referred to as a “Complete Base Facility Termination.” The Facility Termination Request shall be accompanied by the following:

          (i) A designation of the proposed amount of the reduction in the Commitment; and

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

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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 Revolving Facility Commitment or Base 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 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 Commitments 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 Revolving Advances Outstanding required to be paid in order that the aggregate unpaid principal balance of all Revolving Advances Outstanding is not greater than the Revolving Facility Commitment, including any associated prepayment premiums or other amounts due under the Notes (but if the Borrower is not required to prepay all of the Revolving Advances, the Borrower shall have the right to select which of the Revolving Advances shall be repaid);

               (b) If applicable, 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.

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

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

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

               (b) If applicable, defeasance by the Borrower, in accordance with the provisions of Section 3.10 of this Agreement, with respect to all Base Facility Notes Outstanding on the Closing Date;

               (c) If applicable, 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:

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               (a) Payment of Expenses. The payment by the Borrower of the Lender’s reasonable fees and expenses payable in accordance with this Agreement for which the Lender has presented an invoice on or before the Closing Date for the Request.

               (b) No Material Adverse Change. 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 (or, with respect to the conditions precedent to the Initial Advance, from the condition, business or prospects reflected in the financial statements, reports and other information obtained by the Lender during its review of the Borrower and the Initial Mortgaged Properties).

               (c) No Default. 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. The Borrower is not insolvent (within the meaning of any applicable federal or state laws relating to bankruptcy or fraudulent transfers) nor will it be rendered insolvent by the transactions contemplated by the Loan Documents, including the making of a Future Advance, or, after giving effect to such transactions, will be left with an unreasonably small capital with which to engage in its business or undertakings, or will have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature or will have intended to hinder, delay or defraud any existing or future creditor.

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

               (f) Representations and Warranties. 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. 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.

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

               (i) A Compliance Certificate;

               (ii) An Organizational Certificate; and

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

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               (i) Covenants. The relevant 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 relevant Borrower.

SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request. With respect to the closing of the Initial Advance Request, a Collateral Addition Request, a Credit Facility Expansion Request, or a Future Advance 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 for the Initial Advance Request or a Collateral Addition Request, it shall be a condition precedent that the Lender receive each of the following, each dated as of the Closing Date for the Initial Advance Request or Collateral Addition 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.

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

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

               (j) An Assignment of Leases and Rents, if the Lender determines one to be necessary or desirable, provided that the provisions of any such assignment shall be substantively identical to those in the Security Instrument covering the Collateral, with such modifications as may be necessitated by applicable state or local law.

               (k) With respect to a Collateral Addition Request, adding the Borrower as a party and adding a Property Account for the Mortgaged Property.

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 Borrower is a duly formed and existing corporation. The Borrower is qualified to transact business and is in good standing 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 its address set out in Section 23.08.

          (3) The Borrower has observed all customary formalities regarding its corporate existence.

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

          (c) Due Authorization. The execution, delivery and performance of this Agreement and the other Loan Documents have been duly authorized by all necessary action and

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proceedings by or on behalf of the Borrower, and no further approvals or filings of any kind, including any approval of or filing with any Governmental Authority, are required by or on behalf of the Borrower as a condition to the valid execution, delivery and performance by the Borrower of this Agreement or any of the other Loan Documents.

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

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

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

          (2) does or will conflict with or result in any material breach or violation of, or constitute a default under, any of the terms, conditions or provisions of the Borrower’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 are subject;

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

          (4) does or will require the consent or approval of any creditor of the Borrower, 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.

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          (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 have incurred, have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Borrower did not receive less than a reasonably equivalent value in exchange for incurrence of the Obligations. There (i) is no contemplated, pending or, to the best of the Borrower’s knowledge, threatened bankruptcy, reorganization, receivership, insolvency or like proceeding, whether voluntary or involuntary, affecting the Borrower or any of the Mortgaged Properties and (ii) has been no assertion or exercise of jurisdiction over the Borrower or any of the Mortgaged Properties by any court empowered to exercise bankruptcy powers.

          (h) No Contractual Defaults. There are no defaults by the Borrower or, to the knowledge of the Borrower, by any other Person under any contract to which the Borrower is a party relating to any Mortgaged Property, including any management, rental, service, supply, security, maintenance or similar contract, other than defaults which do not permit the non-defaulting party to terminate the contract and 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, which would have a Material Adverse Effect.

          (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. The Borrower is in compliance in all material respects with all applicable provisions of ERISA and has not incurred any liability to the PBGC on a Plan under Title IV of ERISA. None of the assets of the Borrower constitute plan assets (within the meaning of Department of Labor Regulation (S) 2510.3-101) of any employee benefit plan subject to Title I of ERISA.

          (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.

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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) Intentionally Omitted.

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

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

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

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

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          (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).

          (s) Lines of Business. Not less than sixty percent (60%) of the Consolidated Total Assets of each Borrower consist of Multifamily Residential Properties.

          (t) Status as a Real Estate Investment Trust. UDRT 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 owning a Mortgaged Property hereby represents and warrants to the Lender as follows with respect to each of the Mortgaged Properties owned by it:

          (a) Title. The relevant Borrower has good, valid, marketable and indefeasible title to each Mortgaged Property (either in fee simple or as tenant under a ground lease meeting all of the requirements of the DUS Guide), free and clear of all Liens whatsoever except the Permitted Liens. Each Security Instrument, if and when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create a valid, perfected first lien on the Mortgaged Property intended to be encumbered thereby (including the Leases related to such Mortgaged Property and the rents and all rights to collect rents under such Leases), subject only to Permitted Liens. Except for any Permitted Liens, there are no Liens or claims for work, labor or materials affecting any Mortgaged Property which are or may be prior to, subordinate to, or of equal priority with, the Liens created by the Loan Documents. The Permitted Liens do not have, and may not reasonably be expected to have, a Material Adverse Effect.

          (b) Impositions. The Borrower has filed all property and similar tax returns required to have been filed by it with respect to each Mortgaged Property and has paid and discharged, or caused to be paid and discharged, all installments for the payment of all Taxes due to date, and all other material Impositions imposed against, affecting or relating to each Mortgaged Property other than those which have not become due, together with any fine, penalty, interest or cost for nonpayment pursuant to such returns or pursuant to any assessment received by it. Except for any Tax, levy or other assessment or charge resulting from a reassessment of the value of a Mortgaged Property in the ordinary course of business, 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, 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

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

          (e) Rent Roll. The Borrower has executed and delivered to the Lender a Rent Roll for each Mortgaged Property, each dated as of and delivered within 30 days prior to the Closing Date. Each Rent Roll sets forth each and every unit subject to a Lease which is in full force and effect as of the date of such Rent Roll. The information set forth on each Rent Roll is true, correct and complete in all material respects as of its date and there has occurred no material adverse change in the information shown on any Rent Roll from the date of each such Rent Roll to the Closing Date. Except as disclosed in the Rent Roll with respect to each Mortgaged Property or otherwise previously disclosed in writing to the Lender, no Lease is in effect as of the date of the Rent Roll with respect to such Mortgaged Property. Notwithstanding the foregoing, any representation in this subsection (e) made with respect to a time period occurring prior to the date on which the Borrower owned the Mortgaged Property is made to the best of the Borrower’s knowledge.

          (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.

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

     (m) Condition of the Mortgaged Properties. Except as disclosed in any third party report delivered to the Lender prior to the date on which the Borrower’s Mortgaged Property is added to the Collateral Pool, or otherwise disclosed in writing by the Borrower to the 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

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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 Ohio.

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

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

ARTICLE XIII
AFFIRMATIVE COVENANTS OF THE BORROWER

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

SECTION 13.01 Compliance with Agreements; No Amendments. 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 corporation, limited liability company or limited partnership, as applicable, 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, UDRT 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

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(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 UDRT and its Subsidiaries as of the end of such fiscal year, the audited statement of income, UDRT’s equity and retained earnings of the UDRT and its Subsidiaries for such fiscal year and the audited statement of cash flows of UDRT 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 UDRT’s independent certified public accountants to the effect that such financial statements have been prepared in accordance with GAAP, consistently applied, and that such financial statements fairly present the results of its operations and financial condition for the periods and dates indicated, with such certification to be free of exceptions and qualifications as to the scope of the audit or as to the going concern nature of the business.

     (b) Quarterly Financial Statements. As soon as available, and in any event within 45 days after each of the first three fiscal quarters of each fiscal year during the Term of this Agreement, the unaudited balance sheet of UDRT and its Subsidiaries as of the end of such fiscal quarter, the unaudited statement of income and retained earnings of UDRT and its Subsidiaries and the unaudited statement of cash flows of UDRT 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 or the Vice President of Finance of UDRT 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 forty-five (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 UDRT 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 ninety (90) days of the end of its fiscal year, an annual statement of income and expenses of each Mortgaged Property accompanied by a certificate of the Chief Financial Officer of UDRT 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. As soon as available, and in any event within forty-five (45) days after each Calendar Quarter, a current Rent Roll for each Mortgaged Property, showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable, the rent paid and any other information requested by the Lender and accompanied by a

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certificate of the Chief Financial Officer of UDRT 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 UDRT 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 UDRT, or any of its Affiliates, to its 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 UDRT, or any of its Affiliates, with the Securities and Exchange Commission or other Governmental Authorities, and (c) all press releases and other statements made available generally by UDRT, or any of its Affiliates, to the public concerning material developments in the business of UDRT 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 any 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) Borrower Plans and Projections. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, copies of (1) the Borrower’s business plan for the current and the succeeding two fiscal years, (2) the Borrower’s annual budget (including capital expenditure budgets) and projections for each Mortgaged Property; and (3) the Borrower’s financial projections for the current and the succeeding two fiscal years.

     (k) Strategic Plan. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, a written narrative discussing the Borrower’s short and long range plans, including its plans for operations, mergers, acquisitions and management, and accompanied by supporting financial projections and schedules, certified by a member of Senior Management as true, correct and complete (“Strategic Plan”) If the Borrower’s Strategic Plan materially changes, then such person shall deliver to the Lender the Strategic Plan as so changed.

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

     (m) 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.

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

SECTION 13.05 Certificate of Compliance. The Borrower shall deliver to the Lender concurrently with the delivery of the financial statements and/or reports required to be delivered pursuant to Section 13.04 (a) and (b) above a certificate signed by the Chief Financial Officer, Treasurer or Vice President of Finance of UDRT stating that, to the best knowledge of such individual following reasonable inquiry, (i) setting forth in reasonable detail the calculations required to establish whether UDRT was in compliance with the requirements of Sections 15.02 through 15.09 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 UDRT 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, upon reasonable notice to the Borrower and provided Lender observes reasonable security and confidentiality procedures of the Borrower:

     (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 any of UDRT’s Chief Operating Officer, Chief Financial Officer, Vice President of Finance, Treasurer, Assistant Treasurer, Comptroller and any other person performing the functions of said officers;

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

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     (d) to receive any other information that the Lender deems 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, all inspections shall be conducted at reasonable times during normal business hours.

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

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

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

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

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

     (e) Regulatory Supervision or Penalty. The receipt of notice from any Governmental Authority having jurisdiction over the Borrower that (A) the Borrower is being placed under regulatory supervision, (B) any license, Permit, charter, membership or registration material to the conduct of the Borrower’s business or the Mortgaged Properties is to be suspended or revoked or (C) the Borrower is to cease and desist any practice, procedure or 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;

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     (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; and

     (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.

SECTION 13.09 Intentionally Omitted.

SECTION 13.10 Inspection. Subject to the rights of tenants and upon reasonable notice, 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, all such entries, examinations and inspections shall be conducted at reasonable times during normal business hours.

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 (whether or not such defense is provided by Borrower’s insurance) 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 claim is insured and Borrower’s insurance company provides a defense, Borrower may rely on such defense. 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

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Borrower from any Obligation, make such appearances, disburse such sums and take such action as the Lender deems necessary or appropriate to protect the Lender’s interest, including disbursement of attorney’s fees, entry upon such Mortgaged Property to make repairs or take other action to protect the security of said Mortgaged Property, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Lender appears to be prior or superior to the Loan Documents. In the event (i) that any Security Instrument is foreclosed in whole or in part or that any Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, or (ii) of the foreclosure of any mortgage, deed to secure debt, deed of trust or other security instrument prior to or subsequent to any Security Instrument or any Loan Document in which proceeding the Lender is made a party or (iii) of the bankruptcy of the Borrower or an assignment by the Borrower for the benefit of their respective creditors, the Borrower shall be chargeable with and agrees to pay all 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 the lesser of (i) five percent (5%) of the Allocable Facility Amount of such Mortgaged Property and (ii) $250,000 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 $100,000; 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 shall at all times remain in compliance in all material respects with all applicable provisions of ERISA and similar requirements of the PBGC.

SECTION 13.16 Loan Document Taxes. If any tax, assessment or Imposition (other than a franchise 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

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Properties, or the Lender by reason of or as holder of the Loan Documents, the Borrower shall pay all such Loan Document Taxes to, for, or on account of the Lender (or provide funds to the Lender for such payment, as the case may be) as they become due and payable and shall promptly furnish proof of such payment to the Lender, as applicable. In the event of passage of any law or regulation permitting, authorizing or requiring such Loan Document Taxes to be levied, assessed or charged, which law or regulation in the opinion of counsel to the Lender may prohibit the Borrower from paying the Loan Document Taxes to or for the Lender, the Borrower shall enter into such further instruments as may be permitted by law to obligate the Borrower to pay such Loan Document Taxes.

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

SECTION 13.18 Monitoring Compliance. Upon the request of the Lender, from time to time, the Borrower shall promptly provide to the Lender such documents, certificates and other information as may 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 Appraisals. At any time and from time to time (but not to exceed once per calendar year), the Lender shall be entitled to obtain an Appraisal of any Mortgaged Property. At the time of the addition of a Mortgaged Property to the Collateral Pool, the Lender shall be entitled to obtain an Appraisal of such Mortgaged Property. The Borrower shall pay all of the Lender’s costs of obtaining the Appraisal.

SECTION 13.21 Transfer of Ownership Interests of the Borrower.

     (a) Prohibition on Transfers and Changes of Control. The Borrower shall not cause or permit a Transfer or a Change of Control.

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

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

     (ii) A sale or other disposition of obsolete or worn out personal property located in any Mortgaged Property which is contemporaneously replaced by comparable

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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.

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

     (iv) 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 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.

     (v) The transfer of shares of common stock, membership interests, or other beneficial or ownership interest or other forms of securities in the Borrower, and the issuance of all varieties of convertible debt, equity and other similar securities of the Borrower, 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.

     (vi) The issuance by Borrower of additional limited partnership units or convertible debt, equity, membership interests, 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.

     (vii) 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.

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

          (c) Consent to Prohibited Acts. Lender may, in its sole and absolute discretion, consent to a Transfer or Change of Control that would otherwise violate this Section 13.21 if, prior to the Transfer or Change of Control, 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);

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     (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 transaction to the approval of borrowers 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 out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Borrower’s request.

     SECTION 13.22 Change in Senior Management. The Borrower shall give the Lender notice of any change in the identity of the Chief Executive Officer or the Chief Financial Officer of UDRT.

     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 consists of at least four (4) Mortgaged Properties located in at least two (2) SMSA’s, provided, however, that, upon the occurrence of any increase in the Commitment pursuant to Article VIII, the Borrower shall at all times thereafter cause the Collateral Pool to satisfy such other Geographical Diversification Requirements as the Lender may determine and notify Borrower of at the time of the increase.

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

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ARTICLE XIV
NEGATIVE COVENANTS OF THE BORROWER

The Borrower 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) either directly or indirectly sell, transfer, exchange or otherwise dispose of any of its assets if such sale, transfer, exchange or disposal would result in an Event of Default or Potential Event of Default;

          (b) amend its Organizational Documents in any material respect without the prior written consent of the Lender except in connection with a stock split or the issuance of stock of the Borrower, provided such stock split or issuance does not result in an Event of Default or Potential Event of Default;

          (c) dissolve or liquidate in whole or in part, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents;

          (d) merge or consolidate with any Person, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents; or

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

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

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

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

SECTION 14.05 Sale. 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.

SECTION 14.06 Intentionally Omitted.

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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 Intentionally Omitted.

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

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

SECTION 14.11 Restrictions on 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 Conduct of Business. The conduct of the Borrower’s 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 No Encumbrance of Collateral Release Property. Unless the Borrower sells a Collateral Release Property to a Person who is not an Affiliate of the Borrower substantially simultaneously with the release of the Collateral Release Property from the Collateral Pool, the Borrower shall not encumber the Collateral Release Property for a period of 120 days following the release of the Collateral Release Property from the Collateral Pool.

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:

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

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at least A-2 (and not lower than A-3) or the equivalent thereof or from Moody’s is at least P-2 (and not lower than P-3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A-2 (and not lower than A-3) or the equivalent thereof by S&P or at least P-2 (and not lower than P-3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A- (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Borrower Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state, or other income taxes plus depreciation, amortization and other non cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

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     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

          “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

          “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

          “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

          “Consolidated Net Operating Income from Realty” means for any period for any Realty of the Consolidated Group, an amount equal to the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

          “Consolidated Net Operating Income from Unencumbered Realty” (i) the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

          “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon and further excluding amortization on Insurance Company Debt which shall not exceed $7.5 million annually) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the

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Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

          “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

          “Consolidated Unencumbered Realty” means for the Consolidated Group on a consolidated basis, all Realty which is not encumbered by a Lien securing Debt. For purposes of the covenant, Consolidated Unencumbered Realty as of any date, for the Consolidated Group, shall be valued at the sum (without duplication) of (a) with respect to any consolidated Unencumbered Realty purchased or developed prior to January 1 of the year preceding such date, (i) Consolidated Net Operating Income from Unencumbered Realty for the fiscal quarter most recently ended prior to such date multiplied by four, divided by (ii) 9.25%; plus (b) with respect to any Consolidated Unencumbered Realty purchased or developed on or after January 1 of the year preceding such date, the actual costs of such Realty; plus (c) with respect to any Consolidated Unencumbered Realty that also constitutes consolidated Unimproved Realty, the sum of (i) fifty percent (50%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to fifty percent (50%) of the actual expenditures for improvements on such Realty; plus (d) fifty percent (50%) of the Consolidated Group’s pro rata share of the GAAP value of any Realty contributed to or otherwise invested in joint ventures which is not encumbered by a Lien securing Debt.

          “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person, (x) the Attributed Principal Amount under any Securitization Transaction and (xi) all obligations of such person owing under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person).

          “Insurance Company Debt” means Debt owed by the Borrower with respect to the 7.98% Notes due March 2000-2003 as more fully described in note 4 of the consolidated financial

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statements contained in the Borrower’s report on form 10 — K filed with the Securities and Exchange commission for fiscal year 1999.

          “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

          “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

          “Realty” means all real property and interests therein, together with all improvements thereon.

          “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale or financing by a member of the Consolidated Group or merchandise or services, and monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

          “Tangible Fair Market Value of Assets” means, as of any date for the Consolidated Group, the sum (without duplication) of (a) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed prior to January 1 of the year preceding such date, (i) the sum of (A) Consolidated Net Operating Income for Realty for the fiscal quarter most recently ended prior to such date multiplied by four, minus (B) a reserve of $250 per apartment unit, divided by (ii) 9.25%, plus (b) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed on or after January 1 of the year preceding such date, the actual cost of such Realty, plus (c) with respect to any Consolidated Unimproved Realty, the sum of (i) one hundred percent (100%) of the GAAP value of the land associated with such Realty plus (ii) an

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amount equal to 100% (100%) of the actual expenditures for improvements on such Realty, plus (d) cash and Cash Equivalents, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, plus (e) one hundred (100%) of the Consolidated Group’s pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures.

          “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

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 1.55:1.0.

SECTION 15.03 Compliance with Loan to Value Ratios. The Borrower shall at all times maintain the Aggregate Loan to Value Ratio for the Trailing 12 Month Period so that it is not greater than 55%.

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 30% 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 30% of the aggregate Valuations of all Mortgaged Properties.

SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth of UDRT will not at any time be less than the sum of (i) $1,500,000,000 plus (ii) 90% of the net proceeds (after customary underwriting discounts and commissions and reasonable offering expenses) from Equity Transactions occurring after December 31, 1999.

SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter Consolidated Funded Debt of UDRT shall not exceed 60% of Tangible Fair Market Value of Assets.

SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Adjusted EBITDA of UDRT to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio. As of the last day of each fiscal quarter, the ratio of Consolidated Unsecured Debt of UDRT to Consolidated Unencumbered Realty of UDRT shall not exceed 60%.

SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Net Operating Income of UDRT from Unencumbered

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Realty of UDRT to Consolidated Interest Expense relating to Consolidated Unsecured Debt of UDRT for the fiscal quarter then ended shall not be less than 1.75:1.0.

ARTICLE XVI
FEES

SECTION 16.01 Standby 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. The Standby Fee shall be payable monthly, in arrears, on the first Business Day following the end of the month, except that the Standby Fee for the last month during the Term of this Agreement shall be paid on the last day of the Term of this Agreement.

SECTION 16.02 Origination Fees.

          (a) Initial Origination Fee. The Borrower shall pay to the Lender an origination fee (“Initial Origination Fee”) equal to $750,000 (which is equal to the product obtained by multiplying (i) the Commitment as of the date of this Agreement ($100,000,000), by (ii) .75%). The Borrower shall pay the Initial Origination Fee on the date of this Agreement.

          (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) .75%. 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 shall pay to the Lender due diligence fees (“Initial Due Diligence Fees”) with respect to the Initial Mortgaged Properties in an amount equal to Lender’s reasonable actual out-of-pocket due diligence costs and expenses plus $1,000 per Mortgaged Property. The Borrower has previously paid to the Lender a portion of the Initial Due Diligence Fees and shall pay the remainder of the Initial Due Diligence Fees to the Lender on the Initial Closing Date.

          (b) Additional Due Diligence Fees for Additional Collateral. The Borrower shall pay to the Lender additional due diligence fees (the “Additional Collateral Due Diligence Fees”) with respect to each Additional Mortgaged Property in an amount equal to Lender’s reasonable out-of-pocket due diligence costs and expenses plus $2,500. The Borrower shall pay Additional Collateral Due Diligence Fees for the Additional Mortgaged Property to the Lender on the date on which it submits the Collateral Addition Request for the addition of the Additional 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 reasonable out-of-pocket legal fees and expenses incurred by the Lender and by Fannie Mae in

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connection with the preparation, review and negotiation of this Agreement and any other Loan Documents executed on the date of this Agreement. 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 costs and expenses incurred by the Lender, including the reasonable 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 costs and expenses in connection with a Request. The obligations of the Borrower under this subsection shall be absolute and unconditional, regardless of whether the transaction requested in the Request actually occurs. The Borrower shall pay such costs and expenses to the Lender on the Closing Date for the Request, or, as the case may be, after demand by the Lender when the Lender determines that such Request will not close.

SECTION 16.05 MBS-Related Costs. The Borrower shall pay to the Lender, within 30 days after demand, all 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 or, if applicable, the failure of the purchaser of an MBS to purchase such MBS, 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(c), in connection with the addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI;

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

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

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

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ARTICLE XVII
EVENTS OF DEFAULT

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

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

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

          (c) the failure by the Borrower to perform or observe any covenant set forth in Sections 13.01 through 13.25 or Sections 14.01 through 14.14 within thirty (30) days after receipt of notice from Lender identifying such failure, provided that such period shall be extended for up to forty-five (45) additional days if the Borrower, in the discretion of the Lender, is diligently pursuing a cure of such default; 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 in an aggregate amount in excess of $5,000,000 of the Borrower or assumed by the 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

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hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding upon or composition or adjustment of debts, or (B) the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower, or of all or a substantial part of the property, domestic or foreign, of the Borrower and any such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive calendar days, or any order granting the relief requested in any such case or proceeding against the Borrower (including an order for relief under such Federal bankruptcy laws) shall be entered; or

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

          (h) (i) the execution by the Borrower without the prior written consent of the Lender 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, without the prior written consent of the Lender, 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 45 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 the Borrower, any attachment or other levy against any portion of the Borrower’s assets with respect to a claim or claims in an amount in excess of $2,500,000 in the aggregate remains unpaid, unstayed on appeal undischarged, unbonded, not fully insured or undismissed for a period of 60 days; or

          (l) [Intentionally Deleted]

          (m) 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

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          (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 (m) above, or in any other Loan Document, within 30 days after receipt of notice from the Lender identifying such failure.

ARTICLE XVIII
REMEDIES

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

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

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

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

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 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

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from time to time for each Advance unless collection from the Borrower of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Borrower under applicable law. Nothing contained in this Section shall require the Lender to incur any expense or take any action hereunder.

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

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

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

SECTION 18.07 Application of Payments. Except as otherwise expressly provided in the Loan Documents, and unless applicable law provides otherwise, (i) all payments received by the Lender from the Borrower under the Loan Documents shall be applied by the Lender against 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 Base Facility Note or the Revolving 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.

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SECTION 19.03 Release of Collateral. The Borrower hereby acknowledges that, after the assignment of Loan Documents contemplated in Section 19.02, the Lender shall not have the right or power to effect a release of any Collateral pursuant to Articles VII or X. The Borrower acknowledges that the Security Instruments provide for the release of the Collateral under Articles VII and X. Accordingly, the Borrower shall not look to the Lender for performance of any obligations set forth in Articles VII and X, but shall look solely to the party secured by the Collateral to be released for such performance. The Lender represents and warrants to the Borrower that the party secured by the Collateral shall be subject to the release and substitution 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, 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 the 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 Borrower may provide a letter of credit in lieu of deposits required by the preceding sentence. Any letter of credit provided by the Borrower shall be (i) issued by a financial institution reasonably acceptable to the Lender, (ii) be an amount reasonably deferred, from time to time by the Lender and, (iii) in a form reasonably satisfactory to Lender.

SECTION 20.02 Replacement Reserves. The Borrower shall execute a Replacement Reserve Agreement for the Mortgaged Property which it owns and shall (unless waived by the Lender) make

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all deposits for replacement reserves in accordance with the terms of the Replacement Reserve Agreement.

ARTICLE XXI
INTENTIONALLY OMITTED

ARTICLE XXII
PERSONAL LIABILITY OF THE BORROWER

SECTION 22.01 Personal Liability of the Borrower.

          (a) Full Recourse. The Borrower is and shall remain personally liable to the Lender for the payment and performance of all Obligations throughout the term of this Agreement.

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

          (c) Miscellaneous. 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.

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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 (to the extent of actual out-of-pocket fees, costs, charges or expenses) or enforcement of, or preservation of rights or remedies under, this Agreement or any other Loan Documents or in connection with the foreclosure upon, sale of or other disposition of any Collateral granted pursuant to the Loan Documents.

          (d) UDRT’s Registration Statement, or similar disclosure documents, including fees payable to any rating agencies, including the 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, 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. (Washington, D.C. 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,

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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 VIRGINIA (EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED, (2) THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND FORECLOSURE OF SECURITY INTERESTS ON PERSONAL PROPERTY (OTHER THAN DEPOSIT ACCOUNTS), WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION DETERMINED BY THE CHOICE OF LAW PROVISIONS OF THE VIRGINIA 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 VIRGINIA. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN VIRGINIA 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 VIRGINIA SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND THE LENDER AS

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PROVIDED HEREIN OR THE SUBMISSION HEREIN BY THE BORROWER TO PERSONAL JURISDICTION WITHIN VIRGINIA. 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 THE BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY THE BORROWER UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY THE BORROWER’S FREE WILL.

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

SECTION 23.08 Notices.

          (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 United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received on the Business Day it is delivered); or

     (4) 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), (2) or (3) 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

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5:00 p.m. (local time of the recipient) on a Business Day or if transmitted on a day other than a Business Day);

addressed to the parties as follows:

     As to [any] Borrower:

c/o United Dominion Realty Trust, Inc.
1745 Shea Center Drive
Fourth Floor
Highlands Ranch, Colorado 80126
Attention:        Ella S. Neyland
Telecopy No.:   720-344-5110

     with a copy to:

c/o United Dominion Realty Trust, Inc.
1745 Shea Center Drive
Fourth Floor
Highlands Ranch, Colorado 80126
Attention:                            
Telecopy No.:                       

     with a copy to:

Hirschler, Fleischer, Weinberg, Cox & Allen
701 East Byrd Street
Richmond, Virginia 23219
Attention: Mike Terry, Esq.
Telecopy No.: 804-644-0957

     As to the Lender:

ARCS Commercial Mortgage Co., L.P.
144 2nd Avenue North
Suite 333
Nashville, Tennessee 37201
Attention:          Joseph H. Torrence
Telecopy No.:    (615) 256-5085

     with a copy to:

ARCS Commercial Mortgage
26901 Agoura Road, #200
Calabasas, California 91301
Attn: Loan Administration Dept.

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     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:

Arter & Hadden LLP
1801 K Street, N.W.
Suite 400K
Washington, D.C. 200006
Attention:        Lawrence H. Gesner, Esq.
Telecopy No.:   (202) 857-0172

               (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 its 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 required by the Lender.

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

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

SECTION 23.11 Assignments; Third-Party Rights. The Borrower shall not assign this Agreement, or delegate any of its obligations hereunder, without the prior written consent of the Lender. The Lender may assign its rights and obligations under this Agreement separately or together, without the Borrower’s consent, only to Fannie Mae, but may not delegate its obligations under this Agreement unless required to do so pursuant to Section 19.04.

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

SECTION 23.13 General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in Article I, Section 15.01, Section 16.01 and elsewhere in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (iii) references herein to “Articles,” “Sections,” “subsections,” “paragraphs” and other subdivisions without reference to a document are to designated Articles, Sections, subsections, paragraphs and other subdivisions of this Agreement; (iv) a reference to a subsection without further 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 Decisions in Writing. Any approval, designation, determination, selection, action or decision of the Lender must be in writing to be effective.

SECTION 23.16 Requests. The Borrower may make up to a total of eight (8) Collateral Addition Requests, Collateral Release Requests and Collateral Substitution Requests in each Loan Year.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

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

Borrower
UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:	/s/ Ella S. Neyland
Name: Ella S. Neyland
Title: Executive Vice President and Treasurer
UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company
By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its sole member
By:	/s/ Ella S. Neyland
Name: Ella S. Neyland
Title: Executive Vice President and Treasurer

SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership
By:	UDR HOLDINGS, LLC, its general partner
	By:	UNITED DOMINION REALTY, L.P., its sole member
		By:	UNITED DOMINION REALTY TRUST, INC., its general partner
			By:	/s/ Ella S. Neyland
			Name: Ella S. Neyland
			Title: Executive Vice President and Treasurer

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LA PRIVADA APARTMENTS, L.L.C., an Arizona limited liability company
By:	ASC PROPERTIES, INC., its managing member
By:	/s/ Ella S. Neyland
Name: Ella S. Neyland
Title: Executive Vice President and Treasurer
Lender
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
By:	/s/ Kathy Millhouse
Name: Kathy Millhouse
Title: Senior Vice President

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FIRST AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS FIRST AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the 29th day of March, 2002, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, (ii) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company, (iii) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership, and (iv) LA PRIVADA APARTMENTS, L.L.C., an Arizona limited liability company (individually and collectively, “Borrower”); (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership (“Lender”); and (c) Fannie Mae, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. (“Fannie Mae”).

RECITALS

     A. The Borrower and the Lender are parties to that certain Master Credit Facility Agreement, dated as of August 14, 2001 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment pursuant to the Master Agreement to reflect a conversion of all or a portion of the Revolving Facility to the Base Facility Commitment.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Amendment and the Master Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Conversion. The Revolving Facility shall be reduced by, and the Base Facility Commitment shall be increased by, $138,875,000, and the definitions of “Revolving Facility Commitment” and “Base Facility Commitment” are hereby replaced in their entirety by the following new definitions:

     “Base Facility Commitment” means $138,875,000, plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Articles III or VIII.

     “Revolving Facility Commitment” means an aggregate amount of $ 0 , evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in

accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     Section 2. Capitalized Terms. All capitalized terms used in this Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 3. Full Force and Effect. Except as expressly modified by this Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 4. Counterparts. This Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

[The rest of this page has been intentionally left blank.]

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

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:	/s/ Ella S. Neyland
	Ella S. Neyland
	Executive Vice President and Treasurer
UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company
By:	UDR OF NC, Limited Partnership, a North Carolina limited partnership, its Sole Member
	By:	UDR of North Carolina, Inc., a North Carolina corporation, its General Partner
		By:	/s/ Ella S. Neyland
			Ella S. Neyland
			Executive Vice President and Treasurer

[Signatures continue on next page]

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SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership
By:	UDR HOLDINGS, LLC, its general partner
	By:	UNITED DOMINION REALTY, L.P., its sole member
		By:	UNITED DOMINION REALTY TRUST, INC., its general partner
			By:	/s/ Ella S. Neyland
				Ella S. Neyland
				Executive Vice President and Treasurer
LA PRIVADA APARTMENTS, L.L.C., an Arizona limited liability company
By:	ASC PROPERTIES, INC., its managing member
	By:	/s/ Ella S. Neyland
		Ella S. Neyland
		Executive Vice President and Treasurer

[Signatures continue on next page]

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ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	EVP/Chief Operating Officer

[Signatures continue on next page]

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FANNIE MAE, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, § 12 U.S.C. 1716, et seq.
By:	/s/ Barbara Ann Frouman
Name:	Barbara Ann Frouman
Title:	Vice President

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SECOND AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS SECOND AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Second Amendment”) is made as of the 16th day of July, 2004, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, (ii) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership, formerly known as UDRT of North Carolina, L.L.C., and (iii) UDR Texas Properties, L.P., a Delaware limited partnership (“UDR Texas”), successor by merger to South West Properties, L.P. (“SW Properties”) and La Privada Apartments, L.L.C. (“La Privada”) (individually and collectively, “Borrower”), and (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership, as servicer (“Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Master Credit Facility Agreement, dated as of August 14, 2001, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of March 29, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Second Amendment to (i) reflect the release from the Collateral Pool of one (1) Mortgaged Property commonly known as the Terracina Apartments, located in Maricopa County, Arizona, (ii) reflect the addition to the Collateral Pool of one (1) Mortgaged Property commonly known as the Meridian Apartments, located in Denton County, Texas, and (iii) reflect certain other changes to the Master Agreement as set forth hereinafter.

     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. Release of Mortgaged Property. The Mortgaged Property commonly known as the Terracina Apartments, located in Maricopa County, Arizona, is hereby released from the Collateral Pool under the Master Agreement.

     Section 2. Addition of Mortgaged Property. The Mortgaged Property commonly known as the Meridian Apartments, located in Dallas County, Texas, is hereby added to the Collateral Pool under the Master Agreement.

     Section 3. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 4. UDR Texas. The parties acknowledge that SW Properties and La Privada were merged into UDR Texas and therefore, all references to Borrower in the Loan Documents shall include UDR Texas, including, but not limited to the Master Agreement and the Note.

     Section 5. Representations and Warranties. The Borrower hereby certifies to the Lender that the representations and warranties set forth in the Loan Documents are true and correct as of the date hereof.

     Section 6. Capitalized Terms. All capitalized terms used in this Second Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 7. Full Force and Effect. Except as expressly modified by this Second Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 8. Counterparts. This Second Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

[The rest of this page has been intentionally left blank.]

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[Signature pages for Second Amendment to Master Credit Facility Agreement]

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

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Ella S. Neyland
	Ella S. Neyland
	Executive Vice President and Treasurer
UDR OF NC, LIMITED PARTNERSHIP,
a North Carolina limited partnership
By:	UDRT of Delaware 4 LLC, a Delaware limited liability company, its General Partner
	By:	United Dominion Realty, L.P., a Delaware limited partnership, its Sole Member
		By:	United Dominion Realty Trust, a Maryland corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR Western Residential, Inc., a Virginia corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	EVP & Treasurer

[Signatures continue on next page]

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ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
By:	/s/ Sharlene Bloom
Name:	Sharlene Bloom
Title:	Vice President

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EXHIBIT A

SCHEDULE OF MORTGAGED PROPERTIES
AND VALUATIONS

Property Name	Property Address	Initial Valuation
Anderson Mill Apartments	10707 Lake Creek Parkway, Austin, Texas 78750	$	17,560,000
Oak Forest Apartments	1531 South Highway 121, Lewisville, Texas 75067	$	41,050,000
Oaks of Lewisville (a/k/a Post Oak Ridge Apartments)	200 East Oak Knoll, Lewisville, Texas 75067	$	21,350,000
Oak Park Apartments	106 East Ash Lane, Euless, Texas 76039	$	28,800,000
Sierra Foothills Apartments	13601 South 44th Street, Phoenix, Arizona 85044	$	23,075,000
La Privada Apartments	10255 East Via Lindo, Scottsdale, Arizona 85258	$	28,000,000
Dominion Walnut Ridge Apartments	3004 Dorner Circle, Raleigh, North Carolina 27606	$	17,300,000
Dominion Walnut Creek Apartments	3201 Walnut Creek Road, Raleigh, North Carolina 27606	$	31,000,000
The Meridian Apartments	3620 Huffines Boulevard, Carrollton, Texas 75010	$	37,500,000

A-1

THIRD AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS THIRD AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Third Amendment”) is made as of the 8^th day of December, 2004, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, (ii) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership, formerly known as UDRT of North Carolina, L.L.C., and (iii) UDR Texas Properties, L.P., a Delaware limited partnership (“UDR Texas”) (individually and collectively, “Borrower”), and (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership, as servicer (“Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Master Credit Facility Agreement, dated as of August 14, 2001, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of March 29, 2002, as further amended by that certain Second Amendment to Master Credit Facility Agreement dated as of July 16, 2004 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Third Amendment to reflect the modification of certain terms of the Master Agreement as set forth herein.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Third 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. Definitions. The following is hereby added to Article I of the Master Agreement immediately preceding the definition of “Multifamily Residential Property:”

     “Multifamily REIT Preferred Interest” means a preferred equity interest: (a) owned by a member of the Consolidated Group; (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily residential apartment communities; (c) having trading privileges on a national securities exchange or that is the subject of price quotations in the over-the-counter market (including the NASDAQ National Market) as reported by the National Association of Securities Dealers Automated Quotation System; and (d) not subject to restrictions (whether contractual or under Applicable Law) on sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would

exceed 90 days from the time of purchase, that would otherwise prevent such preferred equity interests from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to preferred equity interests that could be sold pursuant to a registration or an available exemption under the Securities Act of 1933, as amended.

     Section 2. Financial Definitions. Section 15.01 of the Master Agreement is hereby deleted in its entirety and restated as follows:

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at least A-2 (and not lower than A-3) or the equivalent thereof or from Moody’s is at least P-2 (and not lower than P-3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A-2 (and not lower than A-3) or the equivalent thereof by S&P or at least P-2 (and not lower than P-3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A- (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

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     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state, or other income taxes plus depreciation, amortization and other non cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Operating Income” means, for any period for any multifamily asset of the Consolidated Group, an amount equal to (i) the aggregate rental and other income from the operation of such asset during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of such asset (including, without limitation, real estate taxes, a 3% management fee, and bad debt expenses) during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis

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determined in accordance with GAAP on a consistent basis. For properties held in non-wholly owned subsidiaries, Borrower’s share of Consolidated Net Operating Income will be included.

     “Consolidated Net Operating Income from Unencumbered Pool Assets” (i) the aggregate rental and other income from the operation of the Unencumbered Pool Assets during such period; minus all expenses and other proper charges incurred in connection with the operation of the Unencumbered Pool Assets (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

     “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

     “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), but excluding obligations in respect of letters of credit issued for the payment of real estate taxes, special assessments on real properties and utility deposits, in an aggregate amount not to exceed $20,000,000, (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person and (x) all obligations of such person owing under any synthetic lease, tax retention operating lease, off balance

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sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person).

     “Development Property” means a Real Property currently under development (or in the pre-development phase) as a Multifamily Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following clauses (b) or (c) owned by any member of the Consolidated Group for such period minus a reserve of $125 per apartment unit located on a Property, multiplied by (ii) 2 and divided by (iii) 8.25%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during this period of four consecutive fiscal quarters most recently ended (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c) the current book value of any Development Property (or Multifamily Property that was a Development Property at any time during the period of four consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such notes where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests); (h) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not already included. Notwithstanding the foregoing, the amount by which the value of the assets included under any of the preceding clauses (d), (e), (f), (g) and (i) (excluding any promissory note secured by a Lien on a Multifamily Property and any raw land which such Person intends to develop as a Multifamily Property), including the Borrower’s pro rata share of any such assets included under the preceding clause (i), would, in the aggregate, account for more than 5.0% of Gross Asset Value shall be excluded for purposes of determining Gross Asset Value.

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     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Development Properties would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of raw land would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool; (c) the amount by which the value of Properties that are developed but that are not Multifamily Properties would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool; (d) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) promissory notes, including any secured by a Mortgage, payable to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower, and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 15.0% of Gross Asset Value of the Unencumbered Pool; (e) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (f) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; and (g) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of promissory notes that are not secured by a Mortgage would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool. In addition, Gross Asset Value of the Unencumbered Pool shall be determined without including (or otherwise giving credit to) any Unencumbered Pool Assets owned by a Subsidiary that is not a Guarantor if such Subsidiary is an obligor, as of the relevant date of determination, with respect to any Debt (other than Secured Debt that is Nonrecourse Indebtness and those items of Debt set forth in clauses (c) and (d) of the definition of the term Debt). In addition to the foregoing limitations, the amount by which the value of Development Properties, Properties that are developed but that are not Multifamily Properties, raw land, promissory notes and marketable securities (including Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 25.0% of Gross Asset Value of the Unencumbered Pool shall be excluded for purposes of determining Gross Asset Value of the Unencumbered Pool. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties that are developed, but that are not Multifamily Properties, must exceed 85.0%. Any Multifamily Property or other such Property otherwise includable in determination of Gross Asset Value of the Unencumbered Pool, but for noncompliance with the Occupancy Rate requirement in the preceding sentence, shall be considered to be a Development Property for purposes of determining Gross Asset Value of the Unencumbered Pool (with the value of such Multifamily Properties of other Properties be determined in a manner consistent with clause (a) of the definition of Gross Asset Value).

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     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any equity interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the

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Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale or financing by a member of the Consolidated Group or merchandise or services, and monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property, (iv) raw land, (v) promissory notes and (vi) marketable securities (including Multifamily REIT Preferred Interests); (b) neither such asset, nor any interest of any member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 66.67% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually, or collectively, materially impair the value of such Property.

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     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

     Section 3. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

          SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, Consolidated Funded Debt to Gross Asset Value shall not exceed 60%.

     Section 4. Consolidated Total Fixed Charge Coverage Ratio. Section 15.07 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

          SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Adjusted EBITDA to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

          Section 5. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

          SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool . As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool Assets shall not exceed 60%.

     Section 6. Minimum Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

          SECTION 15.09 Minimum Unencumbered Interest Coverage Ratio. The ratio of (i) Consolidated Net Operating Income attributable to Unencumbered Pool Assets and income attributable to promissory notes and marketable securities (including Multifamily REIT Preferred Interests) included as Unencumbered Pool Assets, in each case for the two fiscal quarter period most recently ending (annualized) to (ii) Consolidated Interest Expense relating to Consolidated Unsecured Debt of the Consolidate Group, including without limitation, interest expense, if any, attributable to such promissory notes and marketable securities (including Multifamily REIT Preferred Interest), on a consolidated basis for such period (all of the foregoing as annualized), to be less than 1.75 to 1.0 at the end of any fiscal quarter.

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     Section 7. Capitalized Terms. All capitalized terms used in this Third Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 8. Full Force and Effect. Except as expressly modified by this Third Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 9. Counterparts. This Third Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

[The rest of this page has been intentionally left blank.]

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[Signature pages for Third Amendment to Master Credit Facility Agreement]

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

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By:	/s/ Rodney A. Neuheardt
			Name:	Rodney A. Neuheardt
			Title:	Senior Vice President — Finance & Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC.,
	a Virginia corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures continue on next page]

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ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
	By:	/s/ Sharlene G. Bloom
	Name:	Sharlene G. Bloom
	Title:	Vice President

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FOURTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS FOURTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Fourth Amendment”) is made as of the 20^th day of October, 2005, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, (ii) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership, formerly known as UDRT of North Carolina, L.L.C., and (iii) UDR Texas Properties, L.P., a Delaware limited partnership (“UDR Texas”) (individually and collectively, “Borrower”), and (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership, as servicer (“Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Master Credit Facility Agreement, dated as of August 14, 2001, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of March 29, 2002, as further amended by that certain Second Amendment to Master Credit Facility Agreement dated as of July 16, 2004, as further amended by that certain Third Amendment to Master Credit Facility Agreement dated as of December 8, 2004 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Fourth Amendment to reflect (i) the release from the Collateral Pool of the Mortgaged Property commonly known as La Privada Apartments, located in Maricopa County, Arizona, and (ii) the addition to the Collateral Pool of the Mortgaged Property commonly known The Bradford Apartments, located in Harris County, Texas.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Fourth 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. Release of Mortgaged Property. The Mortgaged Property commonly known as La Privada Apartments, located in Maricopa County, Arizona, is hereby released from the Collateral Pool under the Master Agreement.

     Sections 2, 3, 4, 5 and 6 hereof are effective as of September 30, 2005.

     Section 2. Financial Definitions. Section 15.01 of the Master Agreement is hereby deleted in its entirety and restated as follows:

     “1031 Property” means property held by a “qualified intermediary” in connection with the sale of such property by the Borrower, a Subsidiary or Unconsolidated Affiliate pursuant to, and qualifying for tax treatment under, Section 1031 of the Internal Revenue Code.

     “Condominium Property” means a Multifamily Property that has been converted into residential condominium units for the purpose of sale. For purposes of this definition and the definition of “Condominium Property Value” a Multifamily Property will be deemed “converted” into residential condominium units once both of the following have occurred: (a) notice of the conversion has been sent to the tenants of such Property; and (b) a declaration of condominium or other similar document is filed with the applicable Governmental Authority.

     “Condominium Property Value” means the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for the two quarter period annualized ending immediately prior to such conversion divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such conversion not to exceed 35% of the amount determined in accordance with the preceding clause (a), minus (c) 90% of the actual contractual sales price of each individual condominium unit sale prior to any deductions for commissions, fees and any other expenses; provided, however, no value will be attributed to such a Condominium Property 24 months after its conversion. In addition, no value shall be attributable to a Condominium Property at any time following the earlier of (x) all condominium units of such Property having been sold or otherwise conveyed, (y) the management of such Property having been turned over to such Property’s homeowners’ association and (z) less than 10% of the units remain unsold.

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (iii) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (iv) the Intangible Assets of the Consolidated Group.

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     “Consolidated Assets” means the assets of the members of the Consolidated Group determined in accordance with GAAP on a consolidated basis.

     “Consolidated EBITDA” means for any period for the Consolidated Group, Consolidated Net Income (including Consolidated Net Income attributable to units of Condominium Properties prior to the sale thereof) excluding the following amounts (but only to the extent included in determining Consolidated Net Income for such period) (a) Consolidated Interest Expense; (b) all provisions for any Federal, state or other income taxes; (c) depreciation, amortization and other non-cash charges; (d) gains and losses on Investments and extraordinary gains and losses; (e) taxes on such excluded gains and tax deductions or credits on account of such excluded losses, in each case on a consolidated basis determined in accordance with GAAP; and (f) to the extent not already included in the immediately preceding clauses (b) through (e), the Borrower’s pro rata share of such items of each Unconsolidated Affiliate of the Borrower for such period. Consolidated EBITDA shall include gain or loss, in either case, realized on the sale of any portion of a Condominium Property (without duplication of income on condominium units).

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP (excluding (i) Debt consisting of contingent liabilities retained by the Borrower related to the sale of Hunting Ridge, Woodside and Twin Coves in an aggregate amount not to exceed $20,000,000 and (ii) the aggregate amount, not to exceed $20,000,000, available to be drawn under letters of credit issued in respect of normal operating expenses of such Person) plus the Borrower’s pro rata share of the Debt of any Unconsolidated Affiliate of the Borrower.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, (a) all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and capitalized interest expense (other than capitalized interest funded from a construction loan interest reserve account held by another lender and not included in the calculation of cash for balance sheet reporting purposes), in each case on a consolidated basis determined in accordance with GAAP plus (b) to the extent not already included in the foregoing clause (a), the Borrower’s pro rata share of all interest expense (determined in a manner consistent with this definition of Consolidated Interest Expense) for such period of Unconsolidated Affiliates of the Borrower.

     “Consolidated Net Income” means for any period, the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP, including the Borrower’s pro rata share of the net income of each Unconsolidated Affiliate of the Borrower for such period.

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     “Consolidated Net Operating Income” means, for any period for any Multifamily Property owned by a member of the Consolidated Group or an Unconsolidated Affiliate, an amount equal to (a) the aggregate rental and other income from the operation of such Multifamily Property during such period; minus (b) all expenses and other proper charges incurred in connection with the operation of such Multifamily Property (including, without limitation, real estate taxes and bad debt expenses) during such period and an imputed management fee in the amount of 3.0% of the aggregate rents received for such Multifamily Property during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP. For purposes of determining Consolidated Net Operating Income, only the Borrower’s pro rata share of the Consolidated Net Operating Income of any such Property owned by an Unconsolidated Affiliate of the Borrower shall be used.

     “Consolidated Secured Debt” means, as of any given date, all Consolidated Funded Debt that is secured in any manner by any Lien.

     “Consolidated Total Fixed Charges” means for any period, the sum of (a) the cash portion of Consolidated Interest Expense paid during such period plus (b) regularly scheduled principal payments on Consolidated Funded Debt during such period (excluding any balloon, bullet or similar principal payment payable on any Consolidated Funded Debt which repays such Consolidated Funded Debt in full) plus (c) all cash dividends and distributions on Preferred Equity Interests of members of the Consolidated Group paid during such period, all on a consolidated basis determined in accordance with GAAP.

     “Consolidated Unsecured Debt” means, as of a given date, all Consolidated Funded Debt that is not Consolidated Secured Debt.

     “Debt” of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (d) all Capitalized Lease Obligations of such Person; (e) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property; (f) all obligations of such Person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn); (g) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person; (h) all obligations of others Guaranteed by such Person; (i) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person or which arise in connection with forward equity transactions; and (j) all obligations of such Person owning under any synthetic lease, tax retention

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operating lease, off-balance sheet loan or similar off-balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but is classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata share of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person). All Loans and Letter of Credit Liabilities shall constitute Debt of the Borrower.

     “Development Property” means (i) a Property currently under development (or in the pre-development phase) as a Multifamily Property and/or (ii) a Condominium Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following clauses (b) or (c) owned by any member of the Consolidated Group for such period, multiplied by (ii) 2 and divided by (iii) 7.50%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during the period of six consecutive fiscal quarters most recently ended (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c)(i) the Condominium Property Value of all Condominium Properties owned by any member of the Consolidated Group, (ii) the current book value of any other Development Property (or Multifamily Property that was a Development Property at any time during the period of six consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group and (iii) the Renovation Property Value of all Renovation Properties owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; (h) the value (based on the lower of cost market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such note where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Marketable Multifamily REIT Preferred Interests); and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not

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already included. Notwithstanding the foregoing, any determination of Gross Asset Value shall exclude any Investments held by the Borrower or any Subsidiary.

     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of the Unencumbered Pool Assets owned by Subsidiaries are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; and (c) the amount by which the value of Unencumbered Pool Assets that are Investments and other assets would, in the aggregate, account for more than 20.0% of the Gross Asset Value of the Unencumbered Pool; provided, the limitations contained in the immediately preceding clauses (a) and (b) shall not apply to 1031 Properties and the limitations contained in the immediately preceding clause (c) shall not apply to promissory notes secured by first Mortgages. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties, must exceed 80.0%.

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any equity interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

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     “Marketable Multifamily REIT Preferred Interest” means a Multifamily REIT Preferred Equity Interest: (a) having trading privileges on a national securities exchange or that is subject to price quotations in the over-the-counter market and (b) not subject to restrictions on the sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would exceed 90 days from the time of purchase, that would (whether contractual or under Applicable Law) otherwise prevent such Preferred Equity Interest from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to Preferred Equity Interests that could be sold pursuant to an available exemption under the Securities Act.

     “Multifamily REIT Preferred Interest” means any Preferred Equity Interest: (a) owned by a member of the Consolidated Group and (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily apartment communities.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Renovation Property” mean a Property on which the existing building or other improvements or a portion thereof are undergoing renovation and redevelopment that will either (a) disrupt the occupancy of at least 30% of the square footage of such Property or (b) temporarily reduce the Consolidated Net Operating Income attributable to such Property by more that 30% as compared to the immediately preceding comparable prior period. A Property shall cease to be a Renovation Property upon the earliest to occur of (i) all improvements (other than tenant improvements on unoccupied space) related to the redevelopment of such Property having been substantially completed and (ii) once such Property has achieved an Occupancy Rate of 80.0% or more.

     “Renovation Property Value” means for a Renovation Property, the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for

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the two quarter period annualized ending immediately prior to the commencement of such renovation and redevelopment divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such renovation and redevelopment not to exceed 35% of the amount determined in accordance with the preceding clause (a); provided, however, (i) the value of (a) plus (b) above does not exceed 80% of the Borrower’s good faith determination of the pro forma Consolidated Net Operating Income of such Renovation Property (assuming the completion of all applicable renovation and redevelopment) divided by 7.50% and (ii) 18 months following the commencement of such renovation and redevelopment such property will cease to be a Renovation Property.

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property or a Renovation Property, (iv) raw land, (v) promissory notes (vi) marketable securities (including Marketable Multifamily REIT Preferred Interests) and (vii) Multifamily REIT Preferred Interests; (b) neither such asset, nor any interest of any member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain the consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 51.0% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt), provided however, 1031 Properties will not be subject to the limitations contained in subclauses (i) and (ii) of this clause (d); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually or collectively, materially impair the value of such Property.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

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     Section 3. Consolidated Adjusted Tangible Net Worth. Section 15.05 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth will not at any time be less than $1,200,000,000.”

     Section 4. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.06 Consolidated Funded Debt Ratio. The ratio of (i) Consolidated Funded Debt to (ii) Gross Asset Value, will not exceed 0.625 to 1.0 at any time; provided, however, that if such ratio is greater than 0.625 to 1.0 but less than 0.675 to 1.0, then such failure to comply with the foregoing covenant shall not constitute a Default or Event of Default so long as such ratio ceases to exceed 0.625 to 1.00 within 180 days following the date such ratio first exceeded 0.625 to 1.00.”

     Section 5. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. The ratio of (i) Gross Asset Value of the Unencumbered Pool to (ii) Consolidated Unsecured Debt, will not be less than 1.50 to 1.00 at the end of any fiscal quarter.”

     Section 6. Consolidated Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “[INTENTIONALLY DELETED]”

     Section 7. Addition of Mortgaged Property. The Mortgaged Property commonly known as The Bradford Apartments, located in Harris County, Texas, is hereby added to the Collateral Pool under the Master Agreement.

     Section 8. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 9. Capitalized Terms. All capitalized terms used in this Fourth Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 10. Full Force and Effect. Except as expressly modified by this Fourth Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

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     Section 11. Counterparts. This Fourth Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

[The rest of this page has been intentionally left blank.]

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[Signature pages for Fourth Amendment to Master Credit Facility Agreement]

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

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By:	/s/ Rodney A. Neuheardt
			Name:	Rodney A. Neuheardt
			Title:	Senior Vice President — Finance & Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures continue on next page]

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ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President

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EXHIBIT A

SCHEDULE OF MORTGAGED PROPERTIES
AND VALUATIONS

Property Name	Property Address	Initial Valuation
Anderson Mill Apartments	10707 Lake Creek Parkway, Austin, Texas 78750	$	17,560,000
Oak Forest Apartments	1531 South Highway 121, Lewisville, Texas 75067	$	41,050,000
Oaks of Lewisville (a/k/a Post Oak Ridge Apartments)	200 East Oak Knoll, Lewisville, Texas 75067	$	21,350,000
Oak Park Apartments	106 East Ash Lane, Euless, Texas 76039	$	28,800,000
Sierra Foothills Apartments	13601 South 44th Street, Phoenix, Arizona 85044	$	23,075,000
Dominion Walnut Ridge Apartments	3004 Dorner Circle, Raleigh, North Carolina 27606	$	17,300,000
Dominion Walnut Creek Apartments	3201 Walnut Creek Road, Raleigh, North Carolina 27606	$	31,000,000
The Meridian Apartments	3620 Huffines Boulevard, Carrollton, Texas 75010	$	37,500,000
The Bradford Apartments	15902 Highway 3, Webster, Texas 77598	$	17,440,000

A-1

FIFTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS FIFTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Fifth Amendment”) is made as of the 23^rd day of June, 2006, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, (ii) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership, formerly known as UDRT of North Carolina, L.L.C., and (iii) UDR Texas Properties, L.P., a Delaware limited partnership (“UDR Texas”) (individually and collectively, “Borrower”), and (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership, as servicer (“Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Master Credit Facility Agreement, dated as of August 14, 2001, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of March 29, 2002, as further amended by that certain Second Amendment to Master Credit Facility Agreement dated as of July 16, 2004, as further amended by that certain Third Amendment to Master Credit Facility Agreement dated as of December 8, 2004, and as further amended by that certain Fourth Amendment to Master Credit Facility Agreement dated as of October 20, 2005 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Fifth Amendment to reflect the release from the Collateral Pool of the Mortgaged Property commonly known as The Oaks at Lewisville Apartments, located in Denton County, Texas.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Fifth 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 3. Release of Mortgaged Property. The Mortgaged Property commonly known as The Oaks at Lewisville Apartments, located in Denton County, Texas, is hereby released from the Collateral Pool under the Master Agreement.

     Section 4. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 5. Capitalized Terms. All capitalized terms used in this Fifth Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 6. Full Force and Effect. Except as expressly modified by this Fifth Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 7. Counterparts. This Fifth 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.

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[Signature pages for Fifth Amendment to Master Credit Facility Agreement]

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

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By:	/s/ Justin R. Sato
			Name:	Justin R. Sato
			Title:	Vice President
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC.,
	a Virginia corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President

[Signatures continue on next page]

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ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President / Secretary

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EXHIBIT A

SCHEDULE OF MORTGAGED PROPERTIES
AND VALUATIONS

Property Name	Property Address	Initial Valuation
Anderson Mill Apartments	10707 Lake Creek Parkway, Austin, Texas 78750	$	17,560,000
Oak Forest Apartments	1531 South Highway 121, Lewisville, Texas 75067	$	41,050,000
Oak Park Apartments	106 East Ash Lane, Euless, Texas 76039	$	28,800,000
Sierra Foothills Apartments	13601 South 44th Street, Phoenix, Arizona 85044	$	23,075,000
Dominion Walnut Ridge Apartments	3004 Dorner Circle, Raleigh, North Carolina 27606	$	17,300,000
Dominion Walnut Creek Apartments	3201 Walnut Creek Road, Raleigh, North Carolina 27606	$	31,000,000
The Meridian Apartments	3620 Huffines Boulevard, Carrollton, Texas 75010	$	37,500,000
The Bradford Apartments	15902 Highway 3, Webster, Texas 77598	$	17,440,000

A-1

REAFFIRMATION, JOINDER AND SIXTH AMENDMENT
TO MASTER CREDIT FACILITY AGREEMENT

     THIS REAFFIRMATION, JOINDER AND SIXTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Sixth Amendment”) is made as of the 5^th day of October, 2006, by and among (a)(i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (ii) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership, formerly known as UDRT of North Carolina, L.L.C. (“UDR NC”), (iii) UDR Texas Properties, L.P., a Delaware limited partnership (“UDR Texas”, together with UDRT and UDR NC, “Original Borrower”) and (iv) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“Additional Borrower”) (individually and collectively, Original Borrower and Additional Borrower, “Borrower”), and (b) ARCS Commercial Mortgage Co., L.P., a California limited partnership, as servicer (“Lender”).

RECITALS

     A. Original Borrower and the Lender are parties to or have joined into that certain Master Credit Facility Agreement, dated as of August 14, 2001, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of March 29, 2002, as further amended by that certain Second Amendment to Master Credit Facility Agreement dated as of July 16, 2004, as further amended by that certain Third Amendment to Master Credit Facility Agreement dated as of December 8, 2004, as further amended by that certain Fourth Amendment to Master Credit Facility Agreement dated as of October 20, 2005, and as further amended by that certain Fifth Amendment to Master Credit Facility Agreement dated as of June 23, 2006 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Master Credit Facility Agreement and Other Loan Documents, dated as of August 14, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. Additional Borrower desires to join into the Master Agreement as if it were an Original Borrower thereunder.

     D. The parties are executing this Sixth Amendment pursuant to the Master Agreement to reflect (i) the joinder of Additional Borrower into the Master Agreement as if it were an Original Borrower thereunder, and (ii) the addition of the Mortgaged Property commonly known as The Club at Hickory Hollow located in Davidson County, Tennessee, owned by Additional Borrower as a Mortgaged Property under the Master Agreement.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Sixth 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 8. Recitals. The recitals set forth above are incorporated herein by reference as if fully set forth in the body of this Agreement.

     Section 9. Reaffirmation. Original Borrower hereby reaffirms its obligations pursuant to the Master Agreement.

     Section 10. Joinder. Additional Borrower hereby joins in the Master Agreement as if it were an Original Borrower thereunder and hereby agrees that all references in the Loan Documents to any Borrower shall include the Additional Borrower, including but not limited to the Master Agreement and the Note.

     Section 11. Addition. The Mortgaged Property commonly known as The Club at Hickory Hollow is hereby added to the Collateral Pool.

     Section 12. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 13. Consent. Each Borrower and Lender hereby consent to the provisions of this Sixth Amendment.

     Section 14. Capitalized Terms. All capitalized terms used in this Sixth Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 15. Full Force and Effect. Except as expressly modified by this Sixth Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 16. Counterparts. This Sixth Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

[The rest of this page has been intentionally left blank.]

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[Signature pages for Sixth Amendment to Master Credit Facility Agreement]

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

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Michael A. Ernst
Name:	Michael A. Ernst
Title:	Executive Vice President, Treasurer & Chief Financial Officer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By:	Michael A. Ernst
			Name:	Michael A. Ernst
			Title:	Executive Vice President, Treasurer & Chief Financial Officer

[Signatures continue on next page]

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UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC.,
	a Virginia corporation, its General Partner
	By:	/s/ Michael A. Ernst
	Name:	Michael A. Ernst
	Title:	Executive Vice President, Treasurer & Chief Financial Officer
UNITED DOMINION REALTY, L.P.,
a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Maryland corporation, its General Partner
	By:	/s/ Michael A. Ernst
	Name:	Michael A. Ernst
	Title:	Executive Vice President, Treasurer & Chief Financial Officer

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ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership
By:	ACMC Realty, Inc., a California corporation, its general partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President

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EXHIBIT A

SCHEDULE OF MORTGAGED PROPERTIES
AND VALUATIONS

Property Name	Property Address	Initial Valuation
Anderson Mill Apartments	10707 Lake Creek Parkway, Austin, Texas 78750	$	17,560,000
Oak Forest Apartments	1531 South Highway 121, Lewisville, Texas 75067	$	41,050,000
Oak Park Apartments	106 East Ash Lane, Euless, Texas 76039	$	28,800,000
Sierra Foothills Apartments	13601 South 44th Street, Phoenix, Arizona 85044	$	23,075,000
Dominion Walnut Ridge Apartments	3004 Dorner Circle, Raleigh, North Carolina 27606	$	17,300,000
Dominion Walnut Creek Apartments	3201 Walnut Creek Road, Raleigh, North Carolina 27606	$	31,000,000
The Meridian Apartments	3620 Huffines Boulevard, Carrollton, Texas 75010	$	37,500,000
The Bradford Apartments	15902 Highway 3, Webster, Texas 77598	$	17,440,000
The Club at Hickory Hollow	One Hickory Club Drive, Antioch, Tennessee 37013	$	20,807,640

A-1

EX-10.16

EXHIBIT 10.16

MASTER CREDIT FACILITY AGREEMENT

among

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation,

WOODLAKE VILLAGE, L.P.,
a California limited partnership

and

ARCS COMMERCIAL MORTGAGE CO., L.P.,
a California limited partnership,

dated as of

December 12, 2001

TABLE OF CONTENTS

	Page
RECITALS		1
ARTICLE I		2
ARTICLE II		18
SECTION 2.01 Revolving Facility Commitment		18
SECTION 2.02 Requests for Revolving Advances		18
SECTION 2.03 Maturity Date of Revolving Advances		19
SECTION 2.04 Interest on Revolving Facility Advances		19
SECTION 2.05 Coupon Rates for Revolving Advances		20
SECTION 2.06 Revolving Facility Note		20
SECTION 2.07 Extension of Revolving Facility Termination Date		20
ARTICLE III		21
SECTION 3.01 Base Facility Commitment		21
SECTION 3.02 Requests for Base Facility Advances		21
SECTION 3.03 Maturity Date of Base Facility Advances		21
SECTION 3.04 Interest on Base Facility Advances		21
SECTION 3.05 Coupon Rates for Base Facility Advances		22
SECTION 3.06 Base Facility Note		22
SECTION 3.07 Conversion of Commitment from Revolving Facility Commitment to Base Facility Commitment		22
SECTION 3.08 Limitations on Right to Convert		22
SECTION 3.09 Conditions Precedent to Conversion		23
SECTION 3.10 Defeasance		23
ARTICLE IV		31
SECTION 4.01 Rate Setting for an Advance		31
SECTION 4.02 Advance Confirmation Instrument for Revolving Advances		32
SECTION 4.03 Breakage and other Costs		32
ARTICLE V		32
SECTION 5.01 Initial Advance		32
SECTION 5.02 Future Advances		33
SECTION 5.03 Conditions Precedent to Future Advances		33
SECTION 5.04 Determination of Allocable Facility Amount and Valuations		34
ARTICLE VI		34
SECTION 6.01 Right to Add Collateral		34
SECTION 6.02 Procedure for Adding Collateral		34
SECTION 6.03 Conditions Precedent to Addition of an Additional Mortgaged Property to the Collateral Pool		36
ARTICLE VII		37
SECTION 7.01 Right to Obtain Releases of Collateral		37
SECTION 7.02 Procedure for Obtaining Releases of Collateral		37
SECTION 7.03 Conditions Precedent to Release of Collateral Release Property from the Collateral		38
SECTION 7.04 Substitutions		39
ARTICLE VIII		40
SECTION 8.01 Right to Increase Commitment		40
SECTION 8.02 Procedure for Obtaining Increases in Commitment		40

i

	Page
SECTION 8.03 Conditions Precedent to Increase in Commitment		41
ARTICLE IX		41
SECTION 9.01 Right to Complete or Partial Termination of Facilities		41
SECTION 9.02 Procedure for Complete or Partial Termination of Facilities		41
SECTION 9.03 Conditions Precedent to Complete or Partial Termination of Facilities		42
ARTICLE X		43
SECTION 10.01 Right to Terminate Credit Facility		43
SECTION 10.02 Procedure for Terminating Credit Facility		43
SECTION 10.03 Conditions Precedent to Termination of Credit Facility		43
ARTICLE XI		44
SECTION 11.01 Conditions Applicable to All Requests		44
SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request		45
SECTION 11.03 Delivery of Property Related Documents		45
ARTICLE XII		46
SECTION 12.01 Representations and Warranties of the Borrower		46
SECTION 12.02 Representations and Warranties of the Borrower		50
SECTION 12.03 Representations and Warranties of the Lender		53
ARTICLE XIII		53
SECTION 13.01 Compliance with Agreements; No Amendments		53
SECTION 13.02 Maintenance of Existence		53
SECTION 13.03 Maintenance of REIT Status		54
SECTION 13.04 Financial Statements; Accountants’ Reports; Other Information		54
SECTION 13.05 Certificate of Compliance		56
SECTION 13.06 Maintain Licenses		56
SECTION 13.07 Access to Records; Discussions With Officers and Accountants		56
SECTION 13.08 Inform the Lender of Material Events		57
SECTION 13.09 Intentionally Omitted		58
SECTION 13.10 Inspection		58
SECTION 13.11 Compliance with Applicable Laws		58
SECTION 13.12 Warranty of Title		58
SECTION 13.13 Defense of Actions		58
SECTION 13.14 Alterations to the Mortgaged Properties		59
SECTION 13.15 ERISA		59
SECTION 13.16 Loan Document Taxes		60
SECTION 13.17 Further Assurances		60
SECTION 13.18 Monitoring Compliance		60
SECTION 13.19 Leases		60
SECTION 13.20 Appraisals		60
SECTION 13.21 Transfer of Ownership Interests of the Borrower		60
SECTION 13.22 Change in Senior Management		62
SECTION 13.23 Date Down Endorsements		62
SECTION 13.24 Geographical Diversification		63
SECTION 13.25 Ownership of Mortgaged Properties		63
SECTION 13.26 Facility Balancing		63
ARTICLE XIV		63
SECTION 14.01 Other Activities		63
SECTION 14.02 Value of Security		64

ii

	Page
SECTION 14.03 Zoning		64
SECTION 14.04 Liens		64
SECTION 14.05 Sale		64
SECTION 14.06 Intentionally Omitted		64
SECTION 14.07 Principal Place of Business		64
SECTION 14.08 Intentionally Omitted		64
SECTION 14.09 Change in Property Management		64
SECTION 14.10 Condominiums		64
SECTION 14.11 Restrictions on Distributions		65
SECTION 14.12 Conduct of Business		65
SECTION 14.13 Limitation on Unimproved Real Property and New Construction		65
SECTION 14.14 No Encumbrance of Collateral Release Property		65
ARTICLE XV		65
SECTION 15.01 Financial Definitions		65
SECTION 15.02 Compliance with Debt Service Coverage Ratios		70
SECTION 15.03 Compliance with Loan to Value Ratios		70
SECTION 15.04 Compliance with Concentration Test		70
SECTION 15.05 Consolidated Adjusted Tangible Net Worth		70
SECTION 15.06 Consolidated Funded Debt Ratio		70
SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio		70
SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio		70
SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio		70
ARTICLE XVI		71
SECTION 16.01 Standby Fee		71
SECTION 16.02 Origination Fees		71
SECTION 16.03 Due Diligence Fees		71
SECTION 16.04 Legal Fees and Expenses		71
SECTION 16.05 MBSRelated Costs		72
SECTION 16.06 Failure to Close any Request		72
SECTION 16.07 Other Fees		72
ARTICLE XVII		73
SECTION 17.01 Events of Default		73
ARTICLE XVIII		75
SECTION 18.01 Remedies; Waivers		75
SECTION 18.02 Waivers; Rescission of Declaration		75
SECTION 18.03 The Lender’s Right to Protect Collateral and Perform Covenants and Other Obligations		75
SECTION 18.04 No Remedy Exclusive		76
SECTION 18.05 No Waiver		76
SECTION 18.06 No Notice		76
SECTION 18.07 Application of Payments		76
ARTICLE XIX		76
SECTION 19.01 Special Pool Purchase Contract		76
SECTION 19.02 Assignment of Rights		76
SECTION 19.03 Release of Collateral		77
SECTION 19.04 Replacement of Lender		77
SECTION 19.05 Fannie Mae and Lender Fees and Expenses		77
SECTION 19.06 ThirdParty Beneficiary		77

iii

	Page
ARTICLE XX		77
SECTION 20.01 Insurance and Real Estate Taxes		77
SECTION 20.02 Replacement Reserves		77
ARTICLE XXI		78
ARTICLE XXII		78
SECTION 22.01 Personal Liability of the Borrower		78
ARTICLE XXIII		78
SECTION 23.01 Counterparts		78
SECTION 23.02 Amendments, Changes and Modifications		78
SECTION 23.03 Payment of Costs, Fees and Expenses		79
SECTION 23.04 Payment Procedure		79
SECTION 23.05 Payments on Business Days		79
SECTION 23.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial		80
SECTION 23.07 Severability		81
SECTION 23.08 Notices		81
SECTION 23.09 Further Assurances and Corrective Instruments		83
SECTION 23.10 Term of this Agreement		84
SECTION 23.11 Assignments; Third Party Rights		84
SECTION 23.12 Headings		84
SECTION 23.13 General Interpretive Principles		84
SECTION 23.14 Interpretation		84
SECTION 23.15 Decisions in Writing		84
SECTION 23.16 Requests		84

iv

EXHIBIT A	-	Schedule of Initial Mortgaged Properties and Initial Valuations
EXHIBIT B	-	Base 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	-	Revolving Facility Note
EXHIBIT J	-	Tie-In Endorsement
EXHIBIT K	-	Conversion Request
EXHIBIT L	-	Conversion Amendment
EXHIBIT M	-	Rate Setting Form
EXHIBIT N	-	Rate Confirmation Instrument
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	-	Revolving Facility Termination Request
EXHIBIT X	-	Revolving Facility Termination Document
EXHIBIT Y	-	Credit Facility Termination Request
EXHIBIT Z	-	Intentionally Omitted
EXHIBIT AA	-	Independent Unit Encumbrances

v

MASTER CREDIT FACILITY AGREEMENT

     THIS MASTER CREDIT FACILITY AGREEMENT is made as of the 12^th day of December, 2001 by (i) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (ii) WOODLAKE VILLAGE, L.P., a California limited partnership

     (“Woodlake”) (individually and collectively, UDRT and Woodlake, the “Borrower”), and (iii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (the “Lender”).

RECITALS

     A. The Borrower owns one or more Multifamily Residential Properties (capitalized terms used but not defined shall have the meanings ascribed to such terms in Article I of this Agreement) as more particularly described in Exhibit A to this Agreement.

     B. The Borrower has requested that the Lender establish a $300,000,000 Credit Facility in favor of the Borrower, comprised initially of a $300,000,000 Revolving Facility, all or part of which can be converted to a Base Facility in accordance with, and subject to, the terms and conditions of this Agreement and a $0 Base Facility.

     C. To secure the obligations of the Borrower under this Agreement and the other Loan Documents issued in connection with the Credit Facility, the Borrower shall create a Collateral Pool in favor of the Lender. The Collateral Pool shall be comprised of (i) Security Instruments on all of the Multifamily Residential Properties owned by the Borrower listed on Exhibit A to this Agreement and (ii) any other Security Documents executed by the Borrower pursuant to this Agreement or any other Loan Documents.

     D. Each of the Security Documents shall be cross-defaulted (i.e., a default under any Security Document, or under this Agreement, shall constitute a default under each Security Document, and this Agreement) and cross-collateralized (i.e., each Security Instrument shall secure all of the Borrower’s obligations under this Agreement and the other Loan Documents issued in connection with the Credit Facility) and it is the intent of the parties to this Agreement that the Lender may accelerate any Note without the necessity to accelerate any other Note and that in the exercise of its rights and remedies under the Loan Documents, Lender may 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.

     E. 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 as follows:

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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 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 Revolving Advance or a Base Facility Advance.

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

     “Affiliate” means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “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 for the Trailing 12 Month Period” 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.

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     “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. Lender shall determine the Allocable Facility Amount for each Mortgaged Property on the Initial Closing Date and on or before January 1 of each year (commencing January 1, 2002) during the term of this Agreement and at such other times as provided by this Agreement (the “Determination Date”). Once determined by Lender as aforesaid, the Allocable Facility Amount for each Mortgaged Property shall be promptly disclosed to Borrower by Lender and shall remain in effect until the next Determination Date. The Allocable Facility Amount for any Additional Mortgaged Property shall be 70% of the Valuation of such Mortgaged Property on the date such Mortgaged Property is added to the Collateral Pool.

     “Amortization Period” means, with respect to each Base Facility Advance, the period of 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.

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

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

     “Base Facility Availability Period” means the period beginning on the Initial Closing Date and ending on the date five (5) years after the Initial Closing Date.

     “Base Facility Commitment” means $0, plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Articles III or VIII.

     “Base Facility Fee” means (i) 50 basis points for a Base Facility Advance drawn from the Base Facility Commitment initially available (whether drawn or undrawn) under this Agreement or converted from the Revolving Facility Commitment during the period ending on the date 12 months after the Initial Closing Date, and (ii) for any Base Facility Advance drawn from any portion of the Base Facility Commitment increased under Article VIII or converted from any portion of the Revolving Facility Commitment after the period ending on the date 12 months after the Initial Closing Date, the number of basis points determined at the time of such increase by the Lender as the Base Facility Fee for such Base Facility Advances, provided that in no event shall the Base Facility Fee for Base Facility Advances converted from the Revolving Facility Commitment (expressed as a number of basis points) exceed the Revolving Facility Fee.

     “Base 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 Base Facility Advance, to evidence the Borrower’s obligation to repay the Base Facility Advance.

     “Borrower” means, individually and collectively, United Dominion Realty Trust, Inc., a Virginia corporation, and Woodlake Village, L.P., a California limited partnership.

     “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 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 UDRT shall cease for any reason to be the holder, directly or indirectly, of at least 70% of the voting interests of any other Borrower or to own, directly or indirectly at least 70% of the equity, profits or other partnership interest in, or Voting Equity Capital (or any other Securities or ownership interests) of any other Borrower, (b) the date on which an Acquiring Person or Acquiring Persons becomes (by acquisition, consolidation, merger or otherwise), directly or indirectly, the beneficial owner of more than, in the aggregate, 30% of the total Voting Equity Capital (or of any other Securities or ownership interest) of the Borrower then outstanding, or (c) the replacement (other than solely by reason of retirement at age sixty

-4-

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 Borrower 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 Borrower 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 (c) 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 any of the Borrower’s obligations under the Loan Documents.

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

     (i) 75 basis points, multiplied by

     (ii) 70% of the Initial Valuation of the Multifamily Residential Property, as determined by the Lender.

provided that no Collateral Addition Fee shall be due and payable until aggregate Advances (regardless of the amount of Advances Outstanding) in the amount of $300,000,000 have been made.

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

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

     “Commitment” means, at any time, the sum of the Base Facility Commitment and the Revolving Facility Commitment.

-5-

     “Complete Revolving 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) hereof.

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

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

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

          (a) The Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period is not less than 130%.

          (b) The Aggregate Loan to Value Ratio for the Trailing 12 Month Period does not exceed 70%.

     “Credit Facility” means the Base Facility and the Revolving 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 Revolving Facility Note or the Base 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 Request” shall have the meaning set forth in Section 10.02(a).

     “Debt Service Coverage Ratio for the Trailing 12 Month Period” 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 Trailing 12 Month Period for the subject Mortgaged Property

to

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(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 Revolving Advance, an amount equal to the excess of —

(i)	the face amount of the MBS backed by the Revolving Advance, over
(ii)	the Price of the MBS backed by the Revolving Advance.

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

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

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

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

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

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

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

-7-

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

(b) the amount of the Standby Fees 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 the Revolving Facility Commitment pursuant to Articles IX or X, an amount equal to the product obtained by multiplying—

(1)	the reduction in the Revolving Facility Commitment, by
(2)	the Revolving Facility Fee in effect at such time, by
(3)	the present value factor calculated using the following formula:

1 - (1 + r)/-n/

r

[r = Yield Rate

n = the number of years, and any fraction thereof, remaining between the Closing Date for the reduction in the Revolving Facility Commitment and the Revolving Facility Termination Date]

The “Yield Rate” means the rate on the Three-Month LIBOR on the second Business Day preceding, as applicable, (x) the date of the reduction in the Commitment, (y) the date of the Complete Facility Termination or (z) the date of Lender’s acceleration of the unpaid principal balance of the Facility Note.

     “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. (S) 1716 et seq.

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

     “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.

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          “Geographical Diversification Requirements” means, from and after the date on which the Collateral Pool first consists of ten (10) or more Mortgaged Properties, and prior to the occurrence of an increase in the Commitment pursuant to Article VIII, a requirement that the Collateral Pool consist of at least nine (9) Mortgaged Properties located in at least five (5) SMSA’s and, upon the occurrence of any increase in the Commitment pursuant to Article VIII, such requirements as to the geographical diversity of the Collateral Pool as the Lender may reasonably determine and notify Borrower of prior to the time of the increase.

          “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 determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide, except that for these purposes the financial statements to be used need not be audited and paragraph (b) of such paragraph 3 shall be taken into account in the Lender’s discretion.

          “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.

          “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

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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 current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices);

               (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 Commonwealth of Virginia) issued or created for the account of such Person;

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

               (f) as to any Person (“guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of a primary obligation (as defined below) with respect to which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing, or in effect guaranteeing, any indebtedness, lease, dividend or other obligation (“primary obligations”) of any third person (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, to (1) purchase any such primary obligation or any property constituting direct or indirect security therefor, (2) advance or supply funds for the purchase or payment of any such primary obligation or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (3) purchase property, securities or services 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

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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 Revolving Advance made on the Initial Closing Date in the amount of $30,900,000.

          “Initial Advance Request” shall have the meaning set forth in Section 5.01.

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

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

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

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

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

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

          “Lease” means any lease, any sublease or subsublease, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Mortgaged Property, and every 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, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference,

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priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

          “Loan Documents” means this Agreement, the Notes, the Advance Confirmation Instruments for the Revolving 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 for the Trailing 12 Month Period” means, for a Mortgaged Property, for any specified date, the ratio (expressed as a percentage) of —

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

to

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

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

“Material Adverse Effect” means, with respect to any circumstance, act, condition or event of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, or circumstance or circumstances, whether or not related, a material adverse change in or a materially adverse effect upon any of (a) the business, operations, property or condition (financial or otherwise) of the Borrower, (b) the present or future ability of the Borrower to perform the Obligations for which it is liable, (c) the validity, priority, perfection or enforceability of this Agreement or any other Loan Document or the rights or remedies of the Lender under any Loan Document, or (d) the value of, or the Lender’s ability to have recourse against, any Mortgaged Property.

“MBS” means a mortgage-backed security which is “backed“ by an Advance which is secured 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.

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

“MBS Pass-Through Rate” for a Base 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 Base Facility Advance as determined in accordance with Section 4.01.

“Mortgaged Properties” means, collectively, the Additional 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 Sections 201 and 203 of Part III of the DUS Guide.

“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 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 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.

“Note” means a Base Facility Note or the Revolving Facility Note.

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

“Operating Expenses” means, for any period, with respect to any Multifamily Residential Property, all expenses in respect of the Multifamily Residential Property, as determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide (Estimated Expenses), including replacement reserves, if any, under the Replacement Reserve Agreements for the Mortgaged Properties.

“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.

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

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

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

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

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

     “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 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).

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

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

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     “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 Release Request, a Conversion Request, a Credit Facility Expansion Request, a Credit Facility Termination Request, a Future Advance Request, an Initial Advance Request or a Revolving Facility Termination Request.

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

     “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.

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

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

     “Revolving Facility Commitment” means an aggregate amount of $300,000,000 which shall be evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     “Revolving Facility Fee” means (i) 60 basis points per annum for a Revolving Advance drawn from the Revolving Facility Commitment available (whether drawn or undrawn) under this Agreement during the period ending on the date 12 months after the Initial Closing Date, (ii) for any extended term of the Revolving Facility, the number of basis points per annum determined by the Lender as the Revolving Facility Fee for such period, which fee shall be set by Lender not less than 30 days prior to the commencement of such period, and (iii) for any Revolving Advance drawn from any portion of the Revolving Facility Commitment increased under Article VIII after the date 12 months after the Initial Closing Date, the number of basis points per annum determined at the time of such increase by the Lender as the Revolving Facility Fee for such Revolving Advances.

     “Revolving 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 Revolving Advances.

     “Revolving Facility Termination Date” means the last day of the tenth Loan Year, as such date may be extended pursuant to Section 2.07 of this Agreement.

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     “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 Replacement Reserve Agreements and any other documents executed by a Borrower from time to time to secure any of 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 UDRT, and (ii) any other individuals with responsibility for any of the functions typically performed in a corporation by the officers described in clause (i).

     “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 product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by (iii) the Unused Capacity for such month.

     “Subsidiary” means, as to any Person, any corporation, partnership, limited liability company or other entity of which securities or other ownership interest having an ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. Unless otherwise provided, references to a “Subsidiary” or “Subsidiaries” shall mean a Subsidiary or Subsidiaries of the Borrower.

     “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.

     “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 Base Facility Advances are Outstanding, the latest maturity date for any Base Facility Advance Outstanding, and, at any

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      time during which Base Facility Advances are not Outstanding, the Revolving Facility Termination Date.

     “Three-Month LIBOR” 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 the 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 source reasonably selected by Lender which reasonably correlates (as to rate and volatility) historically to Three-Month LIBOR.

     “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 Corporation.

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

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

     “Transfer” means 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. “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 the undrawn amount of the Commitment available under this Agreement, 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

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

(i)	the Net Operating Income of such Multifamily Residential Property for the Trailing 12 Month Period, by
(ii)	the most recent Cap Rate determined by the Lender.

Notwithstanding the foregoing, any Valuation for a Multifamily Residential Property calculated for a date occurring before the first anniversary of the date on which the Multifamily Residential Property becomes a part of the Collateral Pool shall equal the Appraised Value of such Multifamily Residential Property, unless the Lender determines that changed market or property conditions warrant that the value be determined as set forth in the preceding sentence. Any special risk factors taken into account in connection with the Initial Valuation of a Multifamily Residential Property shall apply to any subsequent Valuation of such Multifamily Residential Property unless Lender shall determine that such special risk factor no longer applies to such Multifamily Residential Property. If the Borrower does not accept Lender’s Valuation, the Borrower may require that the Lender obtain an additional Appraisal, if an Appraisal was the basis of the Valuation, or two Appraisals, if a Cap Rate was the basis of the Valuation. If the two appraisers do not agree on the valuation of the Mortgaged Property, the Lender shall appoint a third appraiser. If a third appraiser is appointed, such appraiser shall, within 30 days after appointment, decide which one of the valuations determined by the other two appraisers is closer to the valuation of the Mortgaged Property and the valuation so selected by the third appraiser shall be binding on the parties as the Valuation. The Borrower shall pay all of the Lender’s costs of obtaining any Appraisal or engaging any appraiser pursuant to this Section.

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

ARTICLE II
THE REVOLVING FACILITY COMMITMENT

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

SECTION 2.02 Requests for Revolving Advances. The Borrower shall request a Revolving Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

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

     (a) no earlier than the date which completes one full month after the Closing Date for the Revolving Advance; and

     (b) no later than the date which completes nine full months after the Closing Date for the Revolving 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 or February 29 in 2000 and any leap year thereafter.

SECTION 2.04 Interest on Revolving Facility Advances.

     (a) Discount. Each Revolving Advance shall be a discount loan. The original stated principal amount of a Revolving Advance shall be the sum of the Price of the Revolving Advance and the Discount of the Revolving Advance. The Price and Discount of each Revolving Advance shall be determined in accordance with the procedures set out in Section 4.01. The proceeds of the Revolving Advance made available by the Lender to the Borrower will equal the Price of the Revolving Advance. The entire unpaid principal of each Revolving Advance shall be due and payable by the Borrower to the Lender on the maturity date of the Revolving Advance. However, if the Borrower has requested that the maturing Revolving Advance (in whole or in part) be renewed with a new Revolving Advance or converted to a Base Facility Advance, to take effect on the maturity date of the maturing Revolving Advance, then the amount the Borrower is required to pay on account of the maturing Revolving Advance will be reduced by, as the case may, that amount of the Price of the new Revolving Advance allocable to the principal of the maturing Revolving Advance being renewed, or that amount of the net proceeds of the MBS related to the Base Facility Advance then converted from the maturing Revolving Advance.

     (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Borrower shall pay interest on the original stated principal amount of the Revolving Advance for the partial month period commencing on the Closing Date for the Revolving 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 Revolving Advance as determined in accordance with Section 2.05(b) and (ii) a rate reasonably determined by the Lender, based on the Lender’s cost of funds and approved in advance, in writing, by the Borrower, pursuant to the procedures mutually agreed upon by the Borrower and the Lender.

     (c) Revolving Facility Fee. In addition to paying the Discount and the partial month interest, if any, the Borrower shall pay monthly installments of the Revolving Facility Fee to the Lender on account of each Revolving Advance over the whole number of calendar months the

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MBS backed by the Revolving Advance is to run from the MBS Issue Date to the maturity date of the MBS. The Revolving Facility Fee shall be payable in advance, in accordance with the terms of the Revolving Facility Note. The first installment shall be payable on or prior to the Closing Date for the Revolving Advance and shall apply to the first full calendar month of the MBS backed by the Revolving 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 Revolving Facility Fee shall be in an amount equal to the product of multiplying (i) the Revolving Facility Fee, by (ii) the amount of the Revolving Advance, by (iii) 1/12.

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

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

     (b) Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Coupon Rate for such Revolving Advance for such period shall be the greater of (i) the rate for the Revolving 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 Revolving Facility Note. The obligation of the Borrower to repay the Revolving Advances will be evidenced by the Revolving Facility Note. The Revolving Facility Note shall be payable to the order of the Lender and shall be made in the aggregate amount of the Revolving Facility Commitment.

SECTION 2.07 Extension of Revolving Facility Termination Date. The Borrower shall have the right to extend the Revolving Facility Termination Date for one (1) five (5) year period upon satisfaction of each of the following conditions:

     (a) The Borrower provides written notice to the Lender not less than thirty (30) nor more than ninety (90) days prior to the then effective Revolving Facility Termination Date requesting that the Revolving Facility Termination Date be extended.

     (b) No Event of Default or Potential Event of Default exists on either the date the notice required by paragraph (a) of this Section is given or on the then effective Revolving Facility Termination Date.

     (c) 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

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     (d) The relevant 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

Upon receipt of the notice required in paragraph (a) of this Section and upon compliance with the other conditions set forth above, the Revolving 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 Revolving Facility during the period after the then effective Revolving Facility Termination Date shall be acceptable to Lender in its discretion.

ARTICLE III
THE BASE FACILITY COMMITMENT

SECTION 3.01 Base Facility Commitment. Subject to the terms, conditions and limitations set forth in this Article, the Lender agrees to make Base Facility Advances to the Borrower from time to time during the Base Facility Availability Period. The aggregate original principal of the Base Facility Advances shall not exceed the Base Facility Commitment. The borrowing of a Base Facility Advance shall permanently reduce the Base Facility Commitment by the original principal amount of the Base Facility Advance. The Borrower may not re-borrow any part of the Base Facility Advance which it has previously borrowed and repaid. The Borrower shall be entitled to Base Facility Advances based on increased Valuations of the Mortgaged Properties.

SECTION 3.02 Requests for Base Facility Advances. The Borrower shall request a Base Facility Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

SECTION 3.03 Maturity Date of Base Facility Advances. The maturity date of each Base Facility Advance shall be the maturity date selected by the Borrower at the time of the making of each such Base Facility Advance, provided that such maturity date shall not be earlier than the 5th anniversary of such Base Facility Advance nor later than the 15/th/ anniversary of the Initial Closing Date.

SECTION 3.04 Interest on Base Facility Advances.

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

     (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Base Facility Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Base Facility Advance is the first day of the month following the month in which the Base Facility Advance is made, the Borrower shall pay interest on the original stated principal amount of the Base Facility Advance for the partial month period commencing on the Closing Date for the Base 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 Base Facility Advance described in the first sentence of this Section and (ii) a rate reasonably determined by the Lender, based on the Lender’s cost of funds, and approved in

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advance, in writing, by the Borrower, pursuant to procedures mutually agreed upon by the Borrower and the Lender.

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

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

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

     (a) Request. In order to convert all or a portion of the Revolving Facility Commitment to the Base 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 Revolving Advances Outstanding which will be prepaid on or before the Closing Date for the conversion as required by Section 3.08(c).

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

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

     (b) Minimum Request. Each Request for a conversion shall be in the minimum amount of $10,000,000.

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     (c) Obligation to Prepay Revolving Advances. If, after the conversion, the aggregate unpaid principal balance of all Revolving Advances Outstanding will exceed the Revolving Facility Commitment, the Borrower shall be obligated to prepay, as a condition precedent to the conversion, an amount of Revolving 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 Revolving Facility Commitment to the Base 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 Revolving 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 Revolving 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. If at any time the Borrower elects to convert all or a portion of the Revolving Facility Commitment to a Base Facility Commitment pursuant to Section 3.07 of this Agreement, or elects that any portion of any expansion of the Commitment shall be a Base Facility Commitment, the Conversion Request or the Credit Facility Expansion Request for the first Base Facility Commitment shall select defeasance or yield maintenance with respect to prepayments of Base Facility Advances. 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 Base Facility Commitment shall apply to all Base Facility Advances during the term of this Agreement. Base Facility Advances are not prepayable at any time, provided that, notwithstanding the foregoing, Borrower may prepay any Base Facility Advance during the last one hundred eighty (180) days of the term of such Base Facility Advance and provided that Base Facility Advances may be defeased pursuant to the terms and conditions of this Section. This Section 3.10 shall not apply to Mortgaged Properties released from a Security Instrument in connection with a substitution of Collateral pursuant to Section 7.04 of this Agreement.

     (a) Conditions. Subject to Section 3.10(d), 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

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

     (1) Defeasance Notice. 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 Borrower desires to consummate the Defeasance. The Defeasance Closing Date specified by 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. Borrower shall also specify in the Defeasance Notice the name, address and telephone number of Borrower for notices pursuant to Section 3.10(g)(4). The form Defeasance Notice provided by Lender specifies: (i) which Mortgaged Properties Borrower proposes 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 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 Borrower and received by Lender no later than the date and time when Lender receives the Defeasance Notice from 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 acceptable to Lender, Lender shall, with reasonable promptness, notify Borrower of such confirmation by signing the Defeasance Notice, attaching the Annual Yields for the Mortgage Payments beginning on the first day of the second calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date (if a Fannie Mae Investment Security is offered as Substitute Collateral) and transmitting the signed Defeasance Notice to Borrower pursuant to Section 3.10(g)(4). If, after Lender has notified 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 Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.

     (3) Substitute Collateral. On or before the Defeasance Closing Date, 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 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

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under the Base Facility Note subject to Defeasance. If the Substitute Collateral is issued in a certificated form and Borrower has possession of the certificate, the certificate shall be endorsed (either on the certificate or on a separate writing attached thereto) by 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 Borrower does not have possession of the certificate, 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. Borrower shall deliver to Lender on or before the Defeasance Closing Date the documents described in Section 3.10(b).

     (5) Amounts Payable by Borrower. On or before the Defeasance Closing Date, 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 Base Facility Note subject to Defeasance, the Security Instruments related to the Mortgaged Properties to be released; and
(C)	all costs and expenses incurred by Lender or Servicer in connection with the Defeasance, including the reasonable 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., Washington, D.C. time, on the Defeasance Closing Date, 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 Borrower’s agent.

     (7) Covenants, Representations and Warranties. On the Defeasance Closing Date, all of the covenants of the relevant 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 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.

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     (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 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 Borrower, in form and substance satisfactory to Lender, that the Defeasance, including both Borrower’s 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 Borrower in form and substance satisfactory to Lender, that the Defeasance will not result in a “sale or exchange” of any Base Facility Note within the meaning of Section 1001(c) of the Internal Revenue Code and the temporary and final regulations promulgated thereunder;

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

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

     (c) Release. Upon Borrower’s compliance with the requirements of Sections 3.10(a)(1) through (7), 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 Borrower’s assets [except the Substitute Collateral] shall be released). Lender shall, with reasonable promptness, execute and deliver to Borrower, at Borrower’s cost and expense, any additional documents reasonably requested by 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. 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 Base Facility Note;

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     (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 Borrower’s compliance with the requirements of Section 3.10(a), Borrower shall assign all its obligations and rights under the relevant Base 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 Borrower and acceptable to Lender in its sole discretion. 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 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 Borrower under the relevant Base Facility Note, and (iii) the release by Lender of Borrower from all liabilities and obligations under the relevant Base Facility Note. Lender shall, at Borrower’s request and expense, execute and deliver releases, reconveyances and security interest terminations with respect to the released Mortgage Properties and all other collateral held by Lender (except the Defeasance Deposit). The Assignment and Assumption Agreement shall be executed by Lender with a counterpart to be returned by Lender to 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 Borrower for use as the Substitute Collateral, 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 Borrower timely pays the Defeasance Commitment Fee, and Lender and Borrower timely transmit a signed facsimile copy of the Defeasance Notice pursuant to Section 3.10(a)(2), but 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 Borrower’s default, as Lender’s sole and exclusive remedy, and, except as provided in Section 3.10(g)(2), Borrower shall be released from all further obligations under this Section 3.10. Borrower acknowledges that, from and after the date on which Lender has executed the Defeasance Notice under Section 3.10(a)(2) and Borrower has delivered the Defeasance Commitment Fee, Lender will incur financing costs in arranging and preparing for the purchase of the Substitute

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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. 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 Borrower’s default.

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

     (4) Notice. The Defeasance Notice delivered pursuant to this Section 3.10(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, 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. Washington, D.C. 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(R) (or in an alternative electronic format) at 2:00 p.m. Washington, D.C. 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(R) is unavailable, Lender shall determine yields from another source reasonably determined by Lender.

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     (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 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 Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date, if the Successor Borrower is designated by Borrower under Section 3.10(e), or one percent (1%) of the aggregate unpaid principal balance of the Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date if the Successor Borrower is designated by Lender under Section 3.10(e). No Defeasance Commitment Fee will be applicable if U.S. Treasury Securities are specified in the Defeasance Notice as the applicable Investment Security.

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

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

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 Base 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 180th 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).

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     (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 Base Facility Note subject to Defeasance during the period beginning on the first day of the second calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date, and the amount that would constitute the aggregate unpaid principal balance of the Base 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 Base 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 Base 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 Base Facility Note subject to Defeasance.

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

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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 Base Facility Advance) or MBS Imputed Interest Rate (for a proposed Revolving Advance) for a Fannie Mae MBS backed by a proposed Advance. The Lender’s quote shall be based on (i) a solicitation of at least three (3) 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 Base Facility Advance) or MBS Imputed Interest Rate (for a Revolving 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. Washington, D.C. time on any Business Day (“Rate Setting Date”). The Rate Setting Form contains various factual certifications required by the Lender and specifies:

     (i) for a Revolving Advance, the amount, term, MBS Issue Date, Revolving Facility Fee and Closing Date for the Advance; and

     (ii) for a Base Facility Advance, the amount, term, MBS Issue Date, Base Facility Fee, Price (which will be in a range between 99-1/2 and 100-1/2), Yield Maintenance Period, if applicable, Yield Rate Security, if applicable, Amortization Period 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, 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 Revolving Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving Facility Fee, Coupon Rate, Discount, Price, and Closing Date for the Advance; and

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

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SECTION 4.02 Advance Confirmation Instrument for Revolving Advances. On or before the Closing Date for a Revolving Advance, the Borrower shall execute and deliver to the Lender an instrument (“Advance Confirmation Instrument”), in the form attached as Exhibit O to this Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving 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 Revolving 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 Revolving Advances in accordance with the Advance Confirmation Instrument, the Revolving Facility Note or the other Loan Documents, but is merely meant to facilitate evidencing the date of funding and to confirm that the Advance Confirmation Instrument is not effective until the date of funding.

SECTION 4.03 Breakage and other Costs. In the event that the Lender obtains an MBS Commitment and the Lender fails to fulfill the MBS Commitment because the Advance is not made (for a reason other than the default of the Lender to make the Advance or the failure of the purchaser of the MBS to purchase such MBS), the Borrower shall pay all breakage and other 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.

ARTICLE V
MAKING THE ADVANCES

SECTION 5.01 Initial Advance. The Borrower may make a request (“Initial Advance Request”) for the Lender to make the Initial Advance. If all conditions contained in this Section are satisfied on or before the Closing Date for the Initial Advance, the Lender shall make the Initial Advance on the Initial Closing Date or on another date selected by the Borrower and approved by the Lender. The obligation of the Lender to make the Initial Advance is subject to the following conditions precedent:

          (a) Receipt by the Lender of the Initial Advance Request;

          (b) [Intentionally Deleted]

          (c) The delivery to the Title Company, for filing and/or recording in all applicable jurisdictions, of all applicable Loan Documents required by the Lender, including duly executed and delivered original copies of the Revolving Facility Note, a Base Facility Note, the Initial Security Instruments covering the Initial Mortgaged Properties and UCC-1 Financing Statements covering the portion of the Collateral comprised of personal property, and other appropriate instruments, in form and substance satisfactory to the Lender and in form proper for recordation, as may be necessary in the opinion of the Lender to perfect the Liens created by the applicable Security Instruments and any other Loan Documents creating a Lien in favor of the

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Lender, and the payment of all taxes, fees and other charges payable in connection with such execution, delivery, recording and filing;

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

          (e) The receipt by the Lender of the Initial Origination Fee pursuant to Section 16.02(a), the Initial Due Diligence Fee pursuant to Section 16.03(a) to the extent calculated by Lender at such time (any portion of the Initial Due Diligence Fee not paid by the Borrower on the Initial Closing Date shall be paid promptly upon demand by Lender), all legal fees and expenses payable pursuant to Section 16.04(a) and all legal fees and expenses payable in connection with the Initial Advance pursuant to Section 16.04(b); and

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

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 Lender’s receipt of the Future Advance Request and 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.

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 Base Facility Advance, delivery of a Base Facility Note, duly executed by the Borrower, in the amount of the Advance, reflecting all of the terms of the Base Facility Advance;

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

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          (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 and other exceptions approved by the Lender;

          (g) If the Advance is a Revolving Advance, the receipt by the Lender of the first installment of Revolving Facility Fee for the Revolving Advance and the entire Discount for the Revolving 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) The satisfaction of all applicable General Conditions set forth in Article XI.

SECTION 5.04 Determination of Allocable Facility Amount and Valuations.

          (a) Initial Determinations. On the Initial Closing Date, Lender shall determine (i) the Allocable Facility Amount and Valuation for each Mortgaged Property and (ii) the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period. The determinations made as of the Initial Closing Date shall remain unchanged until the first anniversary of the Initial Closing Date.

          (b) Future Determinations. (i) Once each Calendar Quarter or, if the Commitment consists only of a Base Facility Commitment, once each Calendar Year, within twenty (20) Business Days after Borrower has delivered to Lender the reports required in Section 13.04, Lender shall determine the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period with the other covenants set forth in the Loan Documents, and whether the Borrower is in compliance, (ii) after the first anniversary of the Initial Closing Date, on an annual basis, and if Lender reasonably decides that changed market or property conditions warrant, Lender shall determine Allocable Facility Amounts and Valuations, and (iii) Lender shall also redetermine Allocable Facility Amounts to take account of any addition, release or substitution of Collateral or other event which invalidates the outstanding determinations.

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.

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          (a) Request. The Borrower may 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 Multifamily Residential 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) to the extent calculated by Lender at such time (any portion of any Additional Collateral Due Diligence Fee not paid by Borrower with the Collateral Additional Request shall be paid promptly upon demand by Lender).

          (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 (A) the Aggregate Debt Service Coverage Ratios for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period applicable to the Collateral Pool, and (B) the Debt Service Coverage Ratio for the Trailing 12 Month Period and the Loan to Value Ratio for the Trailing 12 Month Period applicable to the proposed Additional Property on the basis of the lesser of (i) 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. Within 30 days after receipt of (i) the Collateral Addition Request for the 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 for the Trailing 12 Month Period which it estimates shall result from the addition of the proposed Additional Mortgaged Property to the Collateral Pool. If the Lender declines to consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Lender shall include, in its notice, a brief statement of the reasons for doing so. Within five Business Days after receipt of the Lender’s notice that it shall consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower shall notify the Lender whether or not it elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool. If the Borrower fails to respond within the period of five Business Days, it shall be conclusively deemed to have elected not to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool.

          (d) Closing. If, pursuant to subsection (c), the Lender consents to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower timely elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool and all

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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), provided that in any Calendar Quarter, the Closing Date for any addition of an Additional Mortgaged Property to the Collateral Pool shall be on the same day as the Closing Date of any release or substitution pursuant to Article VII of this Agreement and any increase in the Credit Facility pursuant to Article VIII of this Agreement

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) If the Additional Mortgaged Property is being added to the Collateral Pool prior to the first anniversary of the Initial Closing Date, the Coverage and LTV Tests will be satisfied;

          (b) If the Additional Mortgaged Property is being added to the Collateral Pool after the first anniversary of the Initial Closing Date, the proposed Additional Mortgaged Property has a Debt Service Coverage Ratio for the Trailing 12 Month Period of not less than 130% and a Loan to Value Ratio for the Trailing 12 Month Period of not more than 70% 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;

          (c) If the Collateral Addition Fee is due, the receipt by the Lender of the Collateral Addition Fee and all legal fees and expenses payable by the Borrower in connection with the Collateral Addition pursuant to Section 16.04(b);

          (d) 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;

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

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          (f) 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

          (g) 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 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 Revolving 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, provided that in any Calendar Quarter, the Closing Date for any release shall be on the same day as the Closing Date of any addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement or any increase in the Credit Facility pursuant to Article VIII of this Agreement), 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 and reasonably satisfactory to the Title Company for releases in the jurisdiction governing the perfection of the security interest being released, releasing the applicable Security Instrument as a Lien on the Collateral Release Property, and UCC-3 Termination Statements terminating the UCC-1 Financing Statements perfecting a Lien on the portion of the Collateral Release Property comprised of personal property and such other documents and instruments as the Borrower may reasonably request evidencing the release of the applicable Collateral from any lien securing the Obligations (including a termination of any restriction on the use of any accounts relating to the Collateral Release Property) and the release and return to the Borrower of any and all escrowed amounts relating thereto. The instruments referred to in the preceding sentence are referred to in this Article as the “Collateral Release Documents.”

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          (c) Release Price. The “Release Price” for each Mortgaged Property other than Mortgaged Properties released from a Security Instrument in connection with a Substitution of Collateral pursuant to Section 7.04 of this Agreement means 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. 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 Revolving Advances Outstanding until there are no further Revolving 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 Base Facility Advances, so long as the prepayment is permitted under the Base Facility Note for the Base 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, Revolving 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 Revolving Advances are due and payable, at which time the Lender shall apply the amounts held by it to the amounts of the Revolving Advances due and payable.

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

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

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

          (c) Receipt by the Lender of 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;

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

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

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

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

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

          (k) Notwithstanding the other provisions of this Section 7.03, no release of any of the Mortgaged Properties shall be made unless the Borrower has provided title insurance to Lender in respect of each of the remaining Mortgage Properties in the Collateral Pool in an amount equal to 150% of the Initial Value of each such Mortgaged Property.

SECTION 7.04 Substitutions. Subject to the terms, conditions and limitations of Articles VI and VII, the Borrower may simultaneously add a Multifamily Residential Property to the Collateral Pool and release a Mortgaged Property from the Collateral Pool, thereby effecting a substitution of

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Collateral, provided that Sections 7.02(c), 7.02(d) and 7.03(b) shall not apply to a substitution of Collateral.

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 to increase the Base Facility Commitment, the Revolving Facility Commitment, or both. The Borrower’s right to increase the Commitment is subject to the following limitations:

          (a) Commitment. After giving effect to the proposed increase, the Commitment (without regard to the actual amount of Revolving Advances Outstanding, but taking into account the aggregate original principal amount of all Base Facility Advances made under this Agreement to the Closing Date) shall not exceed $400,000,000.

          (b) Minimum Request. Each Request for an increase in the Commitment (other than an increase in the Commitment pursuant to Section 8.01(b), which shall be in the minimum amount of $3,000,000) shall be in the minimum amount of $10,000,000.

          (c) Terms and Conditions. The terms and conditions of this Agreement shall apply to any increase in the Commitment.

SECTION 8.02 Procedure for Obtaining Increases in Commitment.

          (a) Request. In order to obtain an increase in the Commitment, the Borrower shall deliver a written request for an increase (a “Credit Facility Expansion Request”) to the Lender, in the form attached as Exhibit V to this Agreement. Each Credit Facility Expansion Request shall be accompanied by the following:

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

     (ii) A designation of the increase in the Base Facility Credit Commitment and the Revolving Facility Credit Commitment;

     (iii) A request that the Lender inform the Borrower of any change in the Geographical Diversification Requirements; and

     (iv) A request that the Lender inform the Borrower of the Base Facility Fee and the Revolving 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), provided that in any Calendar Quarter the Closing

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Date for addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement and any increase of the Credit Facility shall be on the same day as the Closing Date for any release or substitution pursuant to Article VII of this Agreement.

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) and other exceptions approved by the Lender, together with any reinsurance agreements required by the Lender;

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

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

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

ARTICLE IX
COMPLETE OR 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 Revolving Facility Commitment and the Base 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 Revolving Facility Commitment (other than in connection with a conversion of all or a portion of the Revolving Loan Commitment to a Base Facility Commitment, which reduction shall be automatic) or the Base 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 Revolving Facility Commitment to $0 shall be referred to as a

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“Complete Revolving Facility Termination.” A permanent reduction of the Base Facility Commitment to $0 shall be referred to as a “Complete Base Facility Termination.” The Facility Termination Request shall be accompanied by the following:

          (i) A designation of the proposed amount of the reduction in the Commitment; and

          (ii) Unless there is a Complete Revolving Facility Termination or a Complete Base Facility Termination, a designation by the Borrower of any Revolving Advances which will be prepaid or Fixed Advances which will be prepaid, 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 Revolving Facility Commitment or Base 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 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 Commitments 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 Revolving Advances Outstanding required to be paid in order that the aggregate unpaid principal balance of all Revolving Advances Outstanding is not greater than the Revolving Facility Commitment, including any associated prepayment premiums or other amounts due under the Notes (but if the Borrower is not required to prepay all of the Revolving Advances, the Borrower shall have the right to select which of the Revolving Advances shall be repaid);

          (b) If applicable, payment by the Borrower of the Facility Termination Fee;

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

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

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ARTICLE X
TERMINATION OF CREDIT FACILITY

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

SECTION 10.02 Procedure for Terminating Credit Facility.

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

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

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

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

     (b) If applicable, defeasance by the Borrower, in accordance with the provisions of Section 3.10 of this Agreement, with respect to all Base Facility Notes Outstanding on the Closing Date;

     (c) If applicable, payment of the Facility Termination Fee; and

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

ARTICLE XI
GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS

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

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

          (a) Payment of Expenses. The payment by the Borrower of the Lender’s reasonable fees and expenses payable in accordance with this Agreement for which the Lender has presented an invoice on or before the Closing Date for the Request.

          (b) No Material Adverse Change. 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 (or, with respect to the conditions precedent to the Initial Advance, from the condition, business or prospects reflected in the financial statements, reports and other information obtained by the Lender during its review of the Borrower and the Initial Mortgaged Properties).

          (c) No Default. 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. The Borrower is not insolvent (within the meaning of any applicable federal or state laws relating to bankruptcy or fraudulent transfers) nor will it be rendered insolvent by the transactions contemplated by the Loan Documents, including the making of a Future Advance, or, after giving effect to such transactions, will be left with an unreasonably small capital with which to engage in its business or undertakings, or will have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature or will have intended to hinder, delay or defraud any existing or future creditor.

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

          (f) Representations and Warranties. 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. 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.

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

               (i) A Compliance Certificate;

               (ii) An Organizational Certificate; and

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

          (i) Covenants. The relevant 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 relevant Borrower.

SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request. With respect to the closing of the Initial Advance Request, a Collateral Addition Request, a Credit Facility Expansion Request, or a Future Advance 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 for the Initial Advance Request or a Collateral Addition Request, it shall be a condition precedent that the Lender receive each of the following, each dated as of the Closing Date for the Initial Advance Request or Collateral Addition 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.

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          (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, on the standard form required by the DUS Guide.

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

          (j) An Assignment of Leases and Rents, if the Lender determines one to be necessary or desirable, provided that the provisions of any such assignment shall be substantively identical to those in the Security Instrument covering the Collateral, with such modifications as may be necessitated by applicable state or local law.

ARTICLE XII
REPRESENTATIONS AND WARRANTIES

SECTION 12.01 Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to the Lender as follows:

          (a) Due Organization; Qualification.

               (1) The Borrower is a duly formed and existing corporation. The Borrower is qualified to transact business and is in good standing 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 its address set out in Section 23.08.

               (3) The Borrower has observed all customary formalities regarding its corporate existence.

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

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

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

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

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

               (2) does or will conflict with or result in any material breach or violation of, or constitute a default under, any of the terms, conditions or provisions of the Borrower’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 are subject;

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

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

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          (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 have incurred, have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Borrower did not receive less than a reasonably equivalent value in exchange for incurrence of the Obligations. There (i) is no contemplated, pending or, to the best of the Borrower’s knowledge, threatened bankruptcy, reorganization, receivership, insolvency or like proceeding, whether voluntary or involuntary, affecting the Borrower or any of the Mortgaged Properties and (ii) has been no assertion or exercise of jurisdiction over the Borrower or any of the Mortgaged Properties by any court empowered to exercise bankruptcy powers.

          (h) No Contractual Defaultsv. 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 permit the non defaulting party to terminate the contract and 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, which would have a Material Adverse Effect.

          (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. The Borrower is in compliance in all material respects with all applicable provisions of ERISA and has not incurred any liability to the PBGC on a Plan under Title IV of ERISA. None of the assets of the Borrower constitute plan assets (within the meaning of Department of Labor Regulation (S) 2510.3 101) of any employee benefit plan subject to Title I of ERISA.

          (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

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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) Intentionally Omitted.

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

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

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

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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).

               (s) Lines of Business. Not less than sixty percent (60%) of the Consolidated Total Assets of each Borrower consist of Multifamily Residential Properties.

               (t) Status as a Real Estate Investment Trust. UDRT 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 owning a Mortgaged Property hereby represents and warrants to the Lender as follows with respect to each of the Mortgaged Properties owned by it:

               (a) Title. The relevant Borrower has good, valid, marketable and indefeasible title to each Mortgaged Property (either in fee simple or as tenant under a ground lease meeting all of the requirements of the DUS Guide), free and clear of all Liens whatsoever except the Permitted Liens. Each Security Instrument, if and when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create a valid, perfected first lien on the Mortgaged Property intended to be encumbered thereby (including the Leases related to such Mortgaged Property and the rents and all rights to collect rents under such Leases), subject only to Permitted Liens. Except for any Permitted Liens, there are no Liens or claims for work, labor or materials affecting any Mortgaged Property which are or may be prior to, subordinate to, or of equal priority with, the Liens created by the Loan Documents. The Permitted Liens do not have, and may not reasonably be expected to have, a Material Adverse Effect.

               (b) Impositions. The Borrower has filed all property and similar tax returns required to have been filed by it with respect to each Mortgaged Property and has paid and discharged, or caused to be paid and discharged, all installments for the payment of all Taxes due to date, and all other material Impositions imposed against, affecting or relating to each Mortgaged Property other than those which have not become due, together with any fine, penalty, interest or cost for nonpayment pursuant to such returns or pursuant to any assessment received by it. Except for any Tax, levy or other assessment or charge resulting from a reassessment of the value of a Mortgaged Property in the ordinary course of business, the Borrower has no knowledge of any new

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

               (e) Rent Roll. The Borrower has executed and delivered to the Lender a Rent Roll for each Mortgaged Property, each dated as of and delivered within 30 days prior to the Closing Date. Each Rent Roll sets forth each and every unit subject to a Lease which is in full force and effect as of the date of such Rent Roll. The information set forth on each Rent Roll is true, correct and complete in all material respects as of its date and there has occurred no material adverse change in the information shown on any Rent Roll from the date of each such Rent Roll to the Closing Date. Except as disclosed in the Rent Roll with respect to each Mortgaged Property or otherwise previously disclosed in writing to the Lender, no Lease is in effect as of the date of the Rent Roll with respect to such Mortgaged Property. Notwithstanding the foregoing, any representation in this subsection (e) made with respect to a time period occurring prior to the date on which the Borrower owned the Mortgaged Property is made to the best of the Borrower’s knowledge.

               (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

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

               (m) Condition of the Mortgaged Properties. Except as disclosed in any third party report delivered to the Lender prior to the date on which the Borrower’s Mortgaged Property is added to the Collateral Pool, or otherwise disclosed in writing by the Borrower to the Lender

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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 Ohio.

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

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

ARTICLE XIII
AFFIRMATIVE COVENANTS OF THE BORROWER

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

SECTION 13.01 Compliance with Agreements; No Amendments. 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 corporation, limited liability company or limited partnership, as applicable, organized under the laws of the state of its organization. The Borrower shall continue to be duly qualified to do business in each jurisdiction in which such qualification is necessary to the conduct of its business and where the failure to be so qualified would adversely affect the validity of, the enforceability of, or the ability to perform, its obligations under this Agreement or any other Loan Document.

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SECTION 13.03 Maintenance of REIT Status. During the Term of this Agreement, UDRT 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 UDRT and its Subsidiaries as of the end of such fiscal year, the audited statement of income, UDRT’s equity and retained earnings of the UDRT and its Subsidiaries for such fiscal year and the audited statement of cash flows of UDRT 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 UDRT’s independent certified public accountants to the effect that such financial statements have been prepared in accordance with GAAP, consistently applied, and that such financial statements fairly present the results of its operations and financial condition for the periods and dates indicated, with such certification to be free of exceptions and qualifications as to the scope of the audit or as to the going concern nature of the business.

               (b) Quarterly Financial Statements. As soon as available, and in any event within 45 days after each of the first three fiscal quarters of each fiscal year during the Term of this Agreement, the unaudited balance sheet of UDRT and its Subsidiaries as of the end of such fiscal quarter, the unaudited statement of income and retained earnings of UDRT and its Subsidiaries and the unaudited statement of cash flows of UDRT 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 or the Vice President of Finance of UDRT 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 forty five (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 UDRT 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 ninety (90) days of the end of its fiscal year, an annual statement of income and expenses of each Mortgaged Property

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accompanied by a certificate of the Chief Financial Officer of UDRT 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. As soon as available, and in any event within forty five (45) days after each Calendar Quarter, a current Rent Roll for each Mortgaged Property, showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable, the rent paid and any other information requested by the Lender and accompanied by a certificate of the Chief Financial Officer of UDRT 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 UDRT 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 UDRT, or any of its Affiliates, to its 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 UDRT, or any of its Affiliates, with the Securities and Exchange Commission or other Governmental Authorities, and (c) all press releases and other statements made available generally by UDRT, or any of its Affiliates, to the public concerning material developments in the business of UDRT 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 any 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) Borrower Plans and Projections. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, copies of (1) the Borrower’s business plan for the current and the succeeding two fiscal years, (2) the Borrower’s annual budget (including capital expenditure budgets) and projections for each Mortgaged Property; and (3) the Borrower’s financial projections for the current and the succeeding two fiscal years.

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               (k) Strategic Plan. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, a written narrative discussing the Borrower’s short and long range plans, including its plans for operations, mergers, acquisitions and management, and accompanied by supporting financial projections and schedules, certified by a member of Senior Management as true, correct and complete (“Strategic Plan”) If 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. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, a rental and sales comparable analysis of the local real estate market in which each Mortgaged Property is located.

               (m) 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.

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

SECTION 13.05 Certificate of Compliance. The Borrower shall deliver to the Lender concurrently with the delivery of the financial statements and/or reports required to be delivered pursuant to Section 13.04 (a) and (b) above a certificate signed by the Chief Financial Officer, Treasurer or Vice President of Finance of UDRT stating that, to the best knowledge of such individual following reasonable inquiry, (i) setting forth in reasonable detail the calculations required to establish whether UDRT was in compliance with the requirements of Sections 15.02 through 15.09 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 UDRT 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, upon reasonable notice to the Borrower and provided Lender observes reasonable security and confidentiality procedures of the Borrower:

               (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;

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               (b) to discuss the Borrower’s affairs, finances and accounts with any of UDRT’s Chief Operating Officer, Chief Financial Officer, Vice President of Finance, Treasurer, Assistant Treasurer, Comptroller and any other person performing the functions of said officers;

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

               (d) to receive any other information that the Lender deems 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, all inspections shall be conducted at reasonable times during normal business hours.

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

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

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

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

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

               (e) Regulatory Supervision or Penalty. The receipt of notice from any Governmental Authority having jurisdiction over the Borrower that (A) the Borrower is being placed under regulatory supervision, (B) any license, Permit, charter, membership or registration material to the conduct of the Borrower’s business or the Mortgaged Properties is to be suspended or revoked or (C) the Borrower is to cease and desist any practice, procedure or 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

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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; and

               (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.

SECTION 13.09 Intentionally Omitted.

SECTION 13.10 Inspection. Subject to the rights of tenants and upon reasonable notice, 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, all such entries, examinations and inspections shall be conducted at reasonable times during normal business hours.

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 (whether or not such defense is provided by Borrower’s insurance) 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 claim is insured and Borrower’s insurance company provides a defense, Borrower may rely on such defense. If the Borrower fails to perform any of the covenants or agreements contained in this Agreement, or if any action or

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proceeding is commenced that is not diligently defended by the Borrower which affects in any material respect the Lender’s interest in any Mortgaged Property or any part thereof, including eminent domain, code enforcement or proceedings of any nature whatsoever under any Applicable Law, whether now existing or hereafter enacted or amended, then the Lender may, but without obligation to do so and without notice to or demand upon the Borrower and without releasing the Borrower from any Obligation, make such appearances, disburse such sums and take such action as the Lender deems necessary or appropriate to protect the Lender’s interest, including disbursement of attorney’s fees, entry upon such Mortgaged Property to make repairs or take other action to protect the security of said Mortgaged Property, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Lender appears to be prior or superior to the Loan Documents. In the event (i) that any Security Instrument is foreclosed in whole or in part or that any Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, or (ii) of the foreclosure of any mortgage, deed to secure debt, deed of trust or other security instrument prior to or subsequent to any Security Instrument or any Loan Document in which proceeding the Lender is made a party or (iii) of the bankruptcy of the Borrower or an assignment by the Borrower for the benefit of their respective creditors, the Borrower shall be chargeable with and agrees to pay all 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 the lesser of (i) five percent (5%) of the Allocable Facility Amount of such Mortgaged Property and (ii) $250,000 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 $100,000; 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 shall at all times remain in compliance in all material respects with all applicable provisions of ERISA and similar requirements of the PBGC.

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

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

SECTION 13.18 Monitoring Compliance. Upon the request of the Lender, from time to time, the Borrower shall promptly provide to the Lender such documents, certificates and other information as may 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 Appraisals. At any time and from time to time (but not to exceed once per calendar year), the Lender shall be entitled to obtain an Appraisal of any Mortgaged Property. At the time of the addition of a Mortgaged Property to the Collateral Pool, the Lender shall be entitled to obtain an Appraisal of such Mortgaged Property. The Borrower shall pay all of the Lender’s costs of obtaining the Appraisal.

SECTION 13.21 Transfer of Ownership Interests of the Borrower.

               (a) Prohibition on Transfers and Changes of Control. The Borrower shall not cause or permit a Transfer or a Change of Control.

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

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

               (ii) A sale or other disposition of obsolete or worn out personal property located in any Mortgaged 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.

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

               (iv) 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 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.

               (v) The transfer of shares of common stock, membership interests, or other beneficial or ownership interest or other forms of securities in the Borrower, and the issuance of all varieties of convertible debt, equity and other similar securities of the Borrower, 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.

               (vi) The issuance by Borrower of additional limited partnership units or convertible debt, equity, membership interests, 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.

               (vii) 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.

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

               (c) Consent to Prohibited Acts. Lender may, in its sole and absolute discretion, consent to a Transfer or Change of Control that would otherwise violate this Section 13.21 if, prior to the Transfer or Change of Control, 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 transaction to the approval of borrowers 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 out of pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Borrower’s request.

SECTION 13.22 Change in Senior Management. The Borrower shall give the Lender notice of any change in the identity of the Chief Executive Officer or the Chief Financial Officer of UDRT.

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.

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SECTION 13.24 Geographical Diversification. From and after the date on which the Collateral Pool first consists of ten (10) or more Mortgaged Properties, the Borrower shall maintain Mortgaged Properties in the Collateral Pool so that the Collateral Pool consists of at least nine (9) Mortgaged Properties located in at least five (5) SMSA’s, provided, however, that, upon the occurrence of any increase in the Commitment pursuant to Article VIII, the Borrower shall at all times thereafter cause the Collateral Pool to satisfy such other Geographical Diversification Requirements as the Lender may determine and notify Borrower of at the time of the increase.

SECTION 13.25 Ownership of Mortgaged Properties. The Borrower shall be the sole owner of each of the Mortgaged Properties free and clear of any Liens other than Permitted Liens. Each Mortgaged Property located in the State of California shall be owned by a Borrower that owns no assets other than (i) the Mortgaged Properties and (ii) assets incident to the ownership, maintenance or operation of such Mortgaged Property.

SECTION 13.26 Facility Balancing. If the Borrower fails to meet the Coverage and LTV Tests then, within 45 days of Lender’s notice to Borrower of such failure, the Borrower shall (i) add Additional Mortgaged Properties to the Collateral Pool in accordance with Article VI so that after such addition the Coverage and LTV Tests are met, or (ii) prepay Advances Outstanding in an amount sufficient to cause the Borrower to be in compliance with the Coverage and LTV Tests. Any prepayments made pursuant to the preceding sentence shall be applied first against the Variable Advances Outstanding in the sequence specified by Borrower until there are no further Variable Advances Outstanding then against the prepayment of Fixed Advances Outstanding so long as the prepayment is permitted under the applicable Fixed Facility Note. If no prepayment is permitted under the applicable Fixed Facility Note, such prepayment amount shall be held by Lender (or its appointed collateral agent) as Substitute Cash Collateral in accordance with a security agreement and other documents in form and substance acceptable to Lender. Any Substitute Cash Collateral remaining will be returned to the Borrower on the earlier of the date when the Coverage and LTV Tests are again met or the Termination Date. If on the date the Borrower pays any amounts required by this Section, Variable Advances are Outstanding but are not then due and payable, Lender shall hold such amounts (which amounts shall bear interest at a rate determined by Lender) as additional collateral until the next date on the Variable Advances are due and payable at which time Lender shall apply the appropriate portion of such prepayment to such Variable Advances.

ARTICLE XIV
NEGATIVE COVENANTS OF THE BORROWER

The Borrower 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) either directly or indirectly sell, transfer, exchange or otherwise dispose of any of its assets if such sale, transfer, exchange or
disposal would result in an Event of Default or Potential Event of Default;

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               (b) amend its Organizational Documents in any material respect without the prior written consent of the Lender except in connection with a stock split or the issuance of stock of the Borrower, provided such stock split or issuance does not result in an Event of Default or Potential Event of Default;

               (c) dissolve or liquidate in whole or in part, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents;

               (d) merge or consolidate with any Person, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents; or

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

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

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

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

SECTION 14.05 Sale. 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.

SECTION 14.06 Intentionally Omitted.

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 Intentionally Omitted.

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

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

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SECTION 14.11 Restrictions on 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 Conduct of Business. The conduct of the Borrower’s 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 No Encumbrance of Collateral Release Property. Unless the Borrower sells a Collateral Release Property to a Person who is not an Affiliate of the Borrower substantially simultaneously with the release of the Collateral Release Property from the Collateral Pool, the Borrower shall not encumber the Collateral Release Property for a period of 120 days following the release of the Collateral Release Property from the Collateral Pool.

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:

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short term commercial paper rating from S&P is at least A 2 (and not lower than A 3) or the equivalent thereof or from Moody’s is at least P 2 (and not lower than P 3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date

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of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A 2 (and not lower than A 3) or the equivalent thereof by S&P or at least P 2 (and not lower than P 3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA or Aa 3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Borrower Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state, or other income taxes plus depreciation, amortization and other non cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

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     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Operating Income from Realty” means for any period for any Realty of the Consolidated Group, an amount equal to the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Net Operating Income from Unencumbered Realty” (i) the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

     “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon and further excluding amortization on Insurance Company Debt which shall not exceed $7.5 million annually) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

     “Consolidated Unencumbered Realty” means for the Consolidated Group on a consolidated basis, all Realty which is not encumbered by a Lien securing Debt. For purposes of the covenant, Consolidated Unencumbered Realty as of any date, for the Consolidated Group, shall be valued at the sum (without duplication) of (a) with respect to any consolidated Unencumbered Realty

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purchased or developed prior to January 1 of the year preceding such date, (i) Consolidated Net Operating Income from Unencumbered Realty for the fiscal quarter most recently ended prior to such date multiplied by four, divided by (ii) 9.25%; plus (b) with respect to any Consolidated Unencumbered Realty purchased or developed on or after January 1 of the year preceding such date, the actual costs of such Realty; plus (c) with respect to any Consolidated Unencumbered Realty that also constitutes consolidated Unimproved Realty, the sum of (i) fifty percent (50%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to fifty percent (50%) of the actual expenditures for improvements on such Realty; plus (d) fifty percent (50%) of the Consolidated Group’s pro rata share of the GAAP value of any Realty contributed to or otherwise invested in joint ventures which is not encumbered by a Lien securing Debt.

     “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person, (x) the Attributed Principal Amount under any Securitization Transaction and (xi) all obligations of such person owing under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person).

     “Insurance Company Debt” means Debt owed by the Borrower with respect to the 7.98% Notes due March 2000 2003 as more fully described in note 4 of the consolidated financial statements contained in the Borrower’s report on form 10 K filed with the Securities and Exchange commission for fiscal year 1999.

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write ups resulting from write ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

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     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale or financing by a member of the Consolidated Group or merchandise or services, and monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

     “Tangible Fair Market Value of Assets” means, as of any date for the Consolidated Group, the sum (without duplication) of (a) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed prior to January 1 of the year preceding such date, (i) the sum of (A) Consolidated Net Operating Income for Realty for the fiscal quarter most recently ended prior to such date multiplied by four, minus (B) a reserve of $250 per apartment unit, divided by (ii) 9.25%, plus (b) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed on or after January 1 of the year preceding such date, the actual cost of such Realty, plus (c) with respect to any Consolidated Unimproved Realty, the sum of (i) one hundred percent (100%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to 100% (100%) of the actual expenditures for improvements on such Realty, plus (d) cash and Cash Equivalents, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, plus (e) one hundred (100%) of the Consolidated Group’s pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

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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 1.30:1.0.

SECTION 15.03 Compliance with Loan to Value Ratios. The Borrower shall at all times maintain the Aggregate Loan to Value Ratio for the Trailing 12 Month Period so that it is not greater than 70%.

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 30% 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 30% of the aggregate Valuations of all Mortgaged Properties.

          (c) The Borrower shall at all times maintain the Collateral so that the Valuation of all Mortgaged Properties subject to review and underwriting under Section 305.09 of the DUS Guide (Projection Dependent on Military Bases) shall not exceed 20% of the aggregate Valuations of all Mortgaged Properties. Notwithstanding the preceding sentence, Lender may reject, in its sole discretion, any proposed Mortgaged Property subject to review and underwriting under Section 305.09 of the DUS Guide.

SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth of UDRT will not at any time be less than the sum of (i) $1,500,000,000 plus (ii) 90% of the net proceeds (after customary underwriting discounts and commissions and reasonable offering expenses) from Equity Transactions occurring after December 31, 1999.

SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter Consolidated Funded Debt of UDRT shall not exceed 60% of Tangible Fair Market Value of Assets.

SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Adjusted EBITDA of UDRT to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio. As of the last day of each fiscal quarter, the ratio of Consolidated Unsecured Debt of UDRT to Consolidated Unencumbered Realty of UDRT shall not exceed 60%.

SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Net Operating Income of UDRT from Unencumbered Realty of UDRT to Consolidated Interest Expense relating to Consolidated Unsecured Debt of UDRT for the fiscal quarter then ended shall not be less than 1.75:1.0.

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ARTICLE XVI
FEES

SECTION 16.01 Standby 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. Notwithstanding the preceding sentence, the Standby Fee shall be waived for the period commencing on the Initial Closing Date and ending on March 31, 2002. The Standby Fee shall be payable monthly, in arrears, on the first Business Day following the end of the month, except that the Standby Fee for the last month during the Term of this Agreement shall be paid on the last day of the Term of this Agreement.

SECTION 16.02 Origination Fees.

               (a) Initial Origination Fee. The Borrower shall pay to the Lender an origination fee (“Initial Origination Fee”) equal to $2,250,000 (which is equal to the product obtained by multiplying (i) the Commitment as of the date of this Agreement ($300,000,000), by (ii) .75%). The Borrower shall pay the Initial Origination Fee on the date of this Agreement. $1,687,500 of the Initial Origination Fee shall be paid on the Initial Closing Date. The remainder of the Initial Original Fee ($562,500) shall be paid on the earlier of (i) the date Advances exceed $225,000,000 (to the extent of such excess multiplied by .75%) and (ii) March 31, 2002.

               (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) .75%. 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 shall pay to the Lender due diligence fees (“Initial Due Diligence Fees”) with respect to the Initial Mortgaged Properties in an amount equal to Lender’s reasonable actual out of pocket due diligence costs and expenses plus $1,000 per Mortgaged Property. The Borrower has previously paid to the Lender a portion of the Initial Due Diligence Fees and shall pay the remainder of the Initial Due Diligence Fees to the Lender on the Initial Closing Date.

               (b) Additional Due Diligence Fees for Additional Collateral. The Borrower shall pay to the Lender additional due diligence fees (the “Additional Collateral Due Diligence Fees”) with respect to each Additional Mortgaged Property in an amount equal to Lender’s reasonable out of pocket due diligence costs and expenses plus $2,500. The Borrower shall pay Additional Collateral Due Diligence Fees for the Additional Mortgaged Property to the Lender on the date on which it submits the Collateral Addition Request for the addition of the Additional Mortgaged Property to the Collateral Pool.

     SECTION 16.04 Legal Fees and Expenses.

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          (a) Initial Legal Fees. The Borrower shall pay, or reimburse the Lender for, all reasonable 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 of this Agreement based on the terms set forth in a separate letter from the Lender to the Borrower. 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 costs and expenses incurred by the Lender, including the reasonable 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 costs and expenses in connection with a Request. The obligations of the Borrower under this subsection shall be absolute and unconditional, regardless of whether the transaction requested in the Request actually occurs. The Borrower shall pay such costs and expenses to the Lender on the Closing Date for the Request, or, as the case may be, after demand by the Lender when the Lender determines that such Request will not close.

SECTION 16.05 MBS Related Costs. The Borrower shall pay to the Lender, within 30 days after demand, all 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 or, if applicable, the failure of the purchaser of an MBS to purchase such MBS, 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) If applicable, the Collateral Addition Fee, pursuant to Section 6.03(c), in connection with the addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI;

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

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

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

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ARTICLE XVII
EVENTS OF DEFAULT

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

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

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

          (c) the failure by the Borrower to perform or observe any covenant set forth in Sections 13.01 through 13.25 or Sections 14.01 through 14.14 within thirty (30) days after receipt of notice from Lender identifying such failure, provided that such period shall be extended for up to forty five (45) additional days if the Borrower, in the discretion of the Lender, is diligently pursuing a cure of such default; 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 in an aggregate amount in excess of $5,000,000 of the Borrower or assumed by the 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

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hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding upon or composition or adjustment of debts, or (B) the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower, or of all or a substantial part of the property, domestic or foreign, of the Borrower and any such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive calendar days, or any order granting the relief requested in any such case or proceeding against the Borrower (including an order for relief under such Federal bankruptcy laws) shall be entered; or

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

          (h) (i) the execution by the Borrower without the prior written consent of the Lender 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, without the prior written consent of the Lender, 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 45 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 the Borrower, any attachment or other levy against any portion of the Borrower’s assets with respect to a claim or claims in an amount in excess of $2,500,000 in the aggregate remains unpaid, unstayed on appeal undischarged, unbonded, not fully insured or undismissed for a period of 60 days; or

          (l) [Intentionally Deleted]

          (m) 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

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          (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 (m) above, or in any other Loan Document, within 30 days after receipt of notice from the Lender identifying such failure.

ARTICLE XVIII
REMEDIES

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

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

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

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

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 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

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from time to time for each Advance unless collection from the Borrower of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Borrower under applicable law. Nothing contained in this Section shall require the Lender to incur any expense or take any action hereunder.

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

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

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

SECTION 18.07 Application of Payments. Except as otherwise expressly provided in the Loan Documents, and unless applicable law provides otherwise, (i) all payments received by the Lender from the Borrower under the Loan Documents shall be applied by the Lender against 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 Base Facility Note or the Revolving 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.

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SECTION 19.03 Release of Collateral. The Borrower hereby acknowledges that, after the assignment of Loan Documents contemplated in Section 19.02, the Lender shall not have the right or power to effect a release of any Collateral pursuant to Articles VII or X. The Borrower acknowledges that the Security Instruments provide for the release of the Collateral under Articles VII and X. Accordingly, the Borrower shall not look to the Lender for performance of any obligations set forth in Articles VII and X, but shall look solely to the party secured by the Collateral to be released for such performance. The Lender represents and warrants to the Borrower that the party secured by the Collateral shall be subject to the release and substitution 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, 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 the 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 Borrower may provide a letter of credit in lieu of deposits required by the preceding sentence. Any letter of credit provided by the Borrower shall be (i) issued by a financial institution reasonably acceptable to the Lender, (ii) be an amount reasonably deferred, from time to time by the Lender and, (iii) in a form reasonably satisfactory to Lender.

SECTION 20.02 Replacement Reserves. The Borrower shall execute a Replacement Reserve Agreement for the Mortgaged Property which it owns and shall (unless waived by the Lender) make

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all deposits for replacement reserves in accordance with the terms of the Replacement Reserve Agreement.

ARTICLE XXI
INTENTIONALLY OMITTED

ARTICLE XXII
PERSONAL LIABILITY OF THE BORROWER

SECTION 22.01 Personal Liability of the Borrower.

          (a) Full Recourse. The Borrower is and shall remain personally liable to the Lender for the payment and performance of all Obligations throughout the term of this Agreement.

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

          (c) Miscellaneous. 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.

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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 (to the extent of actual out of pocket fees, costs, charges or expenses) or enforcement of, or preservation of rights or remedies under, this Agreement or any other Loan Documents or in connection with the foreclosure upon, sale of or other disposition of any Collateral granted pursuant to the Loan Documents.

          (d) UDRT’s Registration Statement, or similar disclosure documents, including fees payable to any rating agencies, including the 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, 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. (Washington, D.C. 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,

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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 VIRGINIA (EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED UNLESS SPECIFICALLY SET FORTH OTHERWISE IN THE RELEVANT SECURITY INSTRUMENT, (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 VIRGINIA 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 VIRGINIA. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN VIRGINIA 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 VIRGINIA SHALL

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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 VIRGINIA. 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 THE BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY THE BORROWER UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY THE BORROWER’S FREE WILL.

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

SECTION 23.08 Notices.

               (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 United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received on the Business Day it is delivered); or

                  (4) 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), (2) or (3) 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

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recipient) on a Business Day, or (ii) on the next Business Day, if so transmitted on or after 5:00 p.m. (local time of the recipient) on a Business Day or if transmitted on a day other than a Business Day); addressed to the parties as follows:

As to [any] Borrower:

c/o United Dominion Realty Trust, Inc.
1745 Shea Center Drive
Fourth Floor
Highlands Ranch, Colorado 80126
Attention: Ella S. Neyland
Telecopy No.: (720) 344 5110

with a copy to:

c/o United Dominion Realty Trust, Inc.
1745 Shea Center Drive
Fourth Floor
Highlands Ranch, Colorado 80126
Attention: Rod Neuheardt
Telecopy No.: (720) 344 5110

with a copy to:

Hirschler, Fleischer, Weinberg, Cox & Allen
701 East Byrd Street
Richmond, Virginia 23219
Attention: Michael H. Terry, Esq.
Telecopy No.: (804) 644 0957

As to the Lender:

ARCS Commercial Mortgage Co., L.P.
144 2/nd/ Avenue North
Suite 333
Nashville, Tennessee 37201
Attention: Joseph H. Torrence
Telecopy No.: (615) 256 5085

with a copy to:

ARCS Commercial Mortgage
26901 Agoura Road, #200
Calabasas, California 91301
Attn: Loan Administration Dept.

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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:

Arter & Hadden LLP
1801 K Street, N.W.
Third Floor, L Street Entrance
Washington, D.C. 200006
Attention: Lawrence H. Gesner, Esq.
Telecopy No.: (202) 857 0172

          (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 its 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 required by the Lender.

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

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

SECTION 23.11 Assignments; Third Party Rights. The Borrower shall not assign this Agreement, or delegate any of its obligations hereunder, without the prior written consent of the Lender. The Lender may assign its rights and obligations under this Agreement separately or together, without the Borrower’s consent, only to Fannie Mae, but may not delegate its obligations under this Agreement unless required to do so pursuant to Section 19.04.

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

SECTION 23.13 General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in Article I, Section 15.01, Section 16.01 and elsewhere in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other genders; (ii) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; (iii) references herein to “Articles,” “Sections,” “subsections,” “paragraphs” and other subdivisions without reference to a document are to designated Articles, Sections, subsections, paragraphs and other subdivisions of this Agreement; (iv) a reference to a subsection without further 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 Decisions in Writing. Any approval, designation, determination, selection, action or decision of the Lender must be in writing to be effective.

SECTION 23.16 Requests. The Borrower may make up to a total of four (4) Collateral Addition Requests, Collateral Release Requests and Collateral Substitution Requests in each Loan Year, provided that any Collateral Addition Requests closed by March 31, 2002 shall not count against such limit. In addition, the Borrower may make up to four (4) additional Collateral Addition Requests, Collateral Release Requests and Collateral Substitution Requests in each Loan Year upon payment of a fee, in addition to any fee due in connection with the subject Request, equal to the greater of (i) $10,000 and (ii) 25 basis points multiplied by the Allocable Facility Amount of the Mortgaged Property that is the subject of the Request.

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Kathy Millhouse
	Name:	Kathy Millhouse
	Title:	Senior Vice President

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FIRST AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS FIRST AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 14th day of January, 2002 by (i) (a) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) HERITAGE – ASPEN COURT L.P., an Arizona limited partnership (“Aspen”), (d) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership (“South West”), (e) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (f) HERITAGE – GENTRY PLACE L.P., an Arizona limited partnership (“Gentry Derby”), (g) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (h) UNITED DOMINION REALTY, L.P., a Virginia limited partnership (“UDR”), (i) HERITAGE – SMITH SUMMIT L.P., an Arizona limited partnership (“Smith Summit”), (j) UDR SUMMIT RIDGE, L.P., a Delaware limited partnership (“Summit Ridge”), (k) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company (“UDRT-NC”) (individually and collectively, Aspen, South West, Crown Pointe, Gentry Place, Hilltop, UDR, Smith Summit, Summit Ridge and UDRT-NC, “Additional Borrower”) (individually and collectively, Original Borrower and Additional Borrower, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of even date herewith, each Additional Borrower joined into the Master Agreement as if they were each an Original Borrower.

     C. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     D. The parties are executing this Amendment pursuant to the Master Agreement to reflect the addition of nine (9) Mortgaged Properties commonly known as Aspen Court owed by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Derby, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDRT-NC, to the Collateral Pool.

     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. Addition of Mortgaged Property. The Mortgaged Properties commonly known as Aspen Court, Braesridge, Crown Pointe, Derby Park, Hilltop, Riverwood, The Summit, Summit Ridge, and Village at Cliffdale are hereby added to the Collateral Pool under the Master Agreement.

     Section 2. Exhibit A. Exhibit A to the Master Agreement is hereby deleted and replaced with the Exhibit A attached to this Amendment.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By: Name:	/s/ Ella S. Neyland Ella S. Neyland
Title:	Executive Vice President and Treasurer

WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
		By: Name:	/s/ Ella S. Neyland Ella S. Neyland
		Title:	Executive Vice President and Treasurer

HERITAGE – ASPEN COURT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By: Name:	/s/ Ella S. Neyland Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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SOUTH WEST PROPERTIES, L.P.,
a Delaware limited partnership
By:	UDR HOLDINGS, LLC, a Virginia limited liability
	company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By: Name:	/s/ Ella S. Neyland Ella S. Neyland
			Title:	Executive Vice President and Treasurer

AAC/FSC CROWN POINTE INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware limited
	liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By: Name:	/s/ Ella S. Neyland Ella S. Neyland
			Title:	Executive Vice President and Treasurer

HERITAGE – GENTRY PLACE L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By: Name:	/s/ Ella S. Neyland Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

4

AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware
	limited liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By: Name:	/s/ Ella S. Neyland Ella S. Neyland
			Title :	Executive Vice President and Treasurer

UNITED DOMINION REALTY, L.P.,
a Virginia limited partnership, Sole Member
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Virginia corporation, General Partner
	By: Name:	/s/ Ella S. Neyland Ella S. Neyland
	Title:	Executive Vice President and Treasurer

HERITAGE – SMITH SUMMIT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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UDR SUMMIT RIDGE, L.P.,
a Delaware limited partnership
By:	SOUTH WEST REIT HOLDING, INC.
	a Texas corporation, its General Partner
	By: Name:	/s/ Ella S. Neyland Ella S. Neyland
	Title:	Executive Vice President and Treasurer

UDRT OF NORTH CAROLINA, L.L.C.,
a North Carolina limited liability company
By:	UDR of NC, Limited Partnership,
	a North Carolina limited partnership, its Sole Member
	By:	UDR of North Carolina, Inc.
		a North Carolina corporation, its General Partner
		By: Name:	/s/ Ella S. Neyland Ella S. Neyland
		Title:	Executive Vice President and Treasurer

[Signatures Continue]

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LENDER

ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership

By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By: Name:	/s/ Kathy Millhouse Kathy Millhouse
	Title:	Senior Vice President

7

EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
	200 Bicentennial Circle
Woodlake Village	Sacramento, CA 95826	$44,800,000
	2305 Ashcroft
Aspen Court	Arlington, TX 76006	$5,700,000
	11100 Braesridge
Braesridge	Houston, TX 77071	$14,650,00
	3788 NE 4th Street
Crown Pointe	Renton, WA 98056	$11,900,000
	606 W. Safari Parkway
Derby Park	Grand Prairie, TX 75050	$15,900,000
	500 Monroe Avenue NE
Hilltop	Renton, WA 98056	$11,000,000
	1045 Holcomb Bridge Road
Riverwood	Roswell, GA 30076	$16,750,000
	1057 Americana Lane
The Summit	Mesquite, TX 75150	$12,250,000
	1604 Ridge Haven Drive
Summit Ridge	Arlington, TX 76011	$11,000,000
	567 Cutchen Lane
Village at Cliffdale	Fayetteville, NC 28314	$16,500,000

A-1

SECOND AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS SECOND AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 24th day of January, 2002 by (i) (a) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) HERITAGE – ASPEN COURT L.P., an Arizona limited partnership (“Aspen”), (d) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership (“South West”), (e) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (f) HERITAGE – GENTRY PLACE L.P., an Arizona limited partnership (“Gentry Derby”), (g) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (h) UNITED DOMINION REALTY, L.P., a Virginia limited partnership (“UDR”), (i) HERITAGE – SMITH SUMMIT L.P., an Arizona limited partnership (“Smith Summit”), (j) UDR SUMMIT RIDGE, L.P., a Delaware limited partnership (“Summit Ridge”), (k) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company (“UDRT-NC”) (individually and collectively, Aspen, South West, Crown Pointe, Gentry Place, Hilltop, UDR, Smith Summit, Summit Ridge and UDRT-NC, “First Additional Borrower”), (l) UDR BEAUMONT, LLC, a Virginia limited liability company (“Beaumont”), (m) HERITAGE – CHELSEA PARK L.P., an Arizona limited partnership (“Chelsea”), (n) HERITAGE – COUNTRY CLUB PLACE L.P., an Arizona limited partnership (“Country Club”), and (o) CONTEMPO HEIGHTS L.L.C., an Arizona limited liability company (“Contempo Stonegate”) (individually and collectively, Beaumont, Chelsea, Country Club and Contempo Stonegate, “Second Additional Borrower”) (individually and collectively, Original Borrower, First Additional Borrower, and Second Additional Borrower, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, each First Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Original Borrower and First Additional Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Derby, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDRT-NC, to the Collateral Pool.

     D. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     E. The parties are executing this Amendment to the Master Agreement to reflect the addition of six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Stonegate, and Trinity Park owned by UDRT-NC, to the Collateral Pool.

     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. Addition of Mortgaged Property. The Mortgaged Properties commonly known as Beaumont, Chelsea Park, Country Club Place, Dunwoody Pointe, Stonegate and Trinity Park are hereby added to the Collateral Pool under the Master Agreement.

     Section 2. Exhibit A. Exhibit A to the Master Agreement is hereby deleted and replaced with the Exhibit A attached to this Amendment.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation

By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership,
	its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia
		corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer
HERITAGE – ASPEN COURT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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SOUTH WEST PROPERTIES, L.P.,
a Delaware limited partnership
By:	UDR HOLDINGS, LLC, a Virginia limited liability
	company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
AAC/FSC CROWN POINTE INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware limited
	liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
HERITAGE – GENTRY PLACE L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware
	limited liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
UNITED DOMINION REALTY, L.P.,
a Virginia limited partnership, Sole Member
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Virginia corporation, General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
HERITAGE – SMITH SUMMIT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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UDR SUMMIT RIDGE, L.P.,
a Delaware limited partnership
By:	SOUTH WEST REIT HOLDING, INC.
	a Texas corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
UDRT OF NORTH CAROLINA, L.L.C.,
a North Carolina limited liability company
By:	UDR OF NC, Limited Partnership,
	a North Carolina limited partnership, its Sole Member
	By:	UDR OF NORTH CAROLINA, INC.,
		a North Carolina corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer
UDR BEAUMONT, LLC,
a Virginia limited liability company
By:	HERITAGE COMMUNITIES L.P.,
	a Delaware limited partnership, its Manager
	By:	ASR INVESTMENTS CORPORATION,
		a Maryland corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer

[Signatures Continue]

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HERITAGE – CHELSEA PARK L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
HERITAGE – COUNTRY CLUB PLACE L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
CONTEMPO HEIGHTS L.L.C.,
an Arizona limited liability company
By:	ASC PROPERTIES, INC.,
	an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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LENDER

ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership

By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Kathy Millhouse
	Name:	Kathy Millhouse
	Title:	Senior Vice President

8

EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle	$	44,800,000
	Sacramento, CA 95826
Aspen Court	2305 Ashcroft	$	5,700,000
	Arlington, TX 76006
Braesridge	11100 Braesridge	$	14,650,00
	Houston, TX 77071
Crown Pointe	3788 NE 4th Street	$	11,900,000
	Renton, WA 98056
Derby Park	606 W. Safari Parkway	$	15,900,000
	Grand Prairie, TX 75050
Hilltop	500 Monroe Avenue NE	$	11,000,000
	Renton, WA 98056
Riverwood	1045 Holcomb Bridge Road	$	16,750,000
	Roswell, GA 30076
The Summit	1057 Americana Lane	$	12,250,000
	Mesquite, TX 75150
Summit Ridge	1604 Ridge Haven Drive	$	11,000,000
	Arlington, TX 76011
Village at Cliffdale	567 Cutchen Lane	$	16,500,000
	Fayetteville, NC 28314
Beaumont	8504 82nd Street, S.W.	$	15,200,000
	Lakewood, WA 98498
Chelsea Park	11000 Crescent Moon	$	7,700,000
	Houston, TX 77064
Country Club Place	1111 Golfview	$	7,000,000
	Richmond, TX 77469
Dunwoody Pointe	7901 Roswell Road	$	14,100,000
	Atlanta, GA 30350
Stonegate	825 S. Alma School Road	$	7,400,000
	Mesa, AZ 85210
Trinity Park	5301 Creek Ridge Lane	$	22,540,000
	Raleigh, NC 27607

A-1

THIRD AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS THIRD AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 21st day of March, 2002 by (i) (a) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) HERITAGE – ASPEN COURT L.P., an Arizona limited partnership (“Aspen”), (d) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership (“South West”), (e) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (f) HERITAGE – GENTRY PLACE L.P., an Arizona limited partnership (“Gentry Derby”), (g) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (h) UNITED DOMINION REALTY, L.P., a Virginia limited partnership (“UDR”), (i) HERITAGE – SMITH SUMMIT L.P., an Arizona limited partnership (“Smith Summit”), (j) UDR SUMMIT RIDGE, L.P., a Delaware limited partnership (“Summit Ridge”), (k) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company (“UDRT-NC”) (individually and collectively, Aspen, South West, Crown Pointe, Gentry Place, Hilltop, UDR, Smith Summit, Summit Ridge and UDRT-NC, “First Additional Borrower”), (l) UDR BEAUMONT, LLC, a Virginia limited liability company (“Beaumont”), (m) HERITAGE – CHELSEA PARK L.P., an Arizona limited partnership (“Chelsea”), (n) HERITAGE – COUNTRY CLUB PLACE L.P., an Arizona limited partnership (“Country Club”), (o) CONTEMPO HEIGHTS L.L.C., an Arizona limited liability company (“Contempo Stonegate”), (individually and collectively, Beaumont, Chelsea, Country Club and Contempo Stonegate, “Second Additional Borrower”), (p) HERITAGE – ARBOR TERRACE I, L.L.C., an Arizona limited liability company (“Arbor I”), (q) HERITAGE – ARBOR TERRACE II, L.L.C., an Arizona limited liability company (“Arbor II”), (r) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), and (s) JAMESTOWN OF ST. MATTHEWS LIMITED PARTNERSHIP, an Ohio limited partnership (“Jamestown of St. Matthews”) (individually and collectively, Arbor I, Arbor II, AAC, and Jamestown of St. Matthews, “Third Additional Borrower”) (individually and collectively, Original Borrower, First Additional Borrower, Second Additional Borrower and Third Additional Borrower, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, each First Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Original Borrower and First Additional Borrower added nine (9)

Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Derby, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDRT-NC, to the Collateral Pool.

     D. Pursuant to the certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, each Second Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Original Borrower, First Additional Borrower and Second Additional Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Stonegate, and Trinity Park owned by UDRT-NC, to the Collateral Pool.

     F. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     G. The parties are executing this Amendment to the Master Agreement to (i) reflect the addition of fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool and (ii) reflect changes to the notice provision as set forth below.

     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. Addition of Mortgaged Property. The Mortgaged Properties commonly known as Arbor Terrace I, Arbor Terrace II, American Heritage, Brandywine, Foothills, Jamestown of St. Matthews, Jamestown of Toledo, Kings Gate, Lakewood, Lancaster Commons, Lancaster Lakes, Nemoke, Sugar Mill Creek, Tualatin Heights are hereby added to the Collateral Pool under the Master Agreement.

     Section 2. Arbor Terrace. Section 7.03(f) is hereby amended by adding the following new language to the end thereof:

2

“; notwithstanding the foregoing, neither of the Mortgaged Properties commonly known as Arbor Terrace I and Arbor Terrace II located in Port Orchard, Washington, shall be released from the Collateral Pool unless both Arbor Terrace I and Arbor Terrace II are released from the Collateral Pool simultaneously.”

     Section 3. Exhibit A. Exhibit A to the Master Agreement is hereby deleted and replaced with the Exhibit A attached to this Amendment.

     Section 4. Lender Notices. Section 23.08 is hereby amended by deleting the notice provision for the Lender and replacing it with the following:

     As to the Lender:

ARCS Commercial Mortgage Co., L.P.
26901 Agoura Road, #200
Calabasas Hills, California 91301
Attn: Timothy L. White
Telecopy No.: (818) 880-3333

     with a copy to:

ARCS Commercial Mortgage
26901 Agoura Road, #200
Calabasas Hills, California 91301
Attn: Loan Administration Dept.

     Section 5. 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 6. 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 7. 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.

     Section 8. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

3

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

BORROWER

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership,
	its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia
		corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer
HERITAGE — ASPEN COURT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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SOUTH WEST PROPERTIES, L.P.,
a Delaware limited partnership

By:	UDR HOLDINGS, LLC, a Virginia limited liability
	company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name: Ella S. Neyland Title: Executive Vice President and Treasurer

AAC/FSC CROWN POINTE INVESTORS, LLC,
a Washington limited liability company

By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware limited
	liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name: Ella S. Neyland
			Title: Executive Vice President and Treasurer

HERITAGE – GENTRY PLACE L.P.,
an Arizona limited partnership

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company

By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware limited liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name: Ella S. Neyland Title: Executive Vice President and Treasurer

UNITED DOMINION REALTY, L.P.,
a Virginia limited partnership, Sole Member

By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

HERITAGE – SMITH SUMMIT L.P.,
an Arizona limited partnership

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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UDR SUMMIT RIDGE, L.P.,
a Delaware limited partnership

By:	SOUTH WEST REIT HOLDING, INC. a Texas corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

UDRT OF NORTH CAROLINA, L.L.C.,
a North Carolina limited liability company

By:	UDR OF NC, Limited Partnership, a North Carolina limited partnership, its Sole Member
	By:	UDR OF NORTH CAROLINA, INC., a North Carolina corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name: Ella S. Neyland Title: Executive Vice President and Treasurer

UDR BEAUMONT, LLC,
a Virginia limited liability company

By:	HERITAGE COMMUNITIES L.P., a Delaware limited partnership, its Manager
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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HERITAGE – CHELSEA PARK L.P.,
an Arizona limited partnership

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

HERITAGE – COUNTRY CLUB PLACE L.P.,
an Arizona limited partnership

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

CONTEMPO HEIGHTS L.L.C.,
an Arizona limited liability company

By:	ASC PROPERTIES, INC., an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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HERITAGE – ARBOR TERRACE I, L.L.C.,
an Arizona limited liability company

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

HERITAGE – ARBOR TERRACE II, L.L.C.,
an Arizona limited liability company

By:	HERITAGE SGP CORPORATION, an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name: Ella S. Neyland Title: Executive Vice President and Treasurer

AAC FUNDING PARTNERSHIP II,
a Delaware general partnership

By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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JAMESTOWN OF ST. MATTHEWS LIMITED PARTNERSHIP,
an Ohio limited partnership

By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name: Ella S. Neyland Title: Executive Vice President and Treasurer

[Signatures Continue]

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LENDER

ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership

By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Timothy L. White
	Name: Timothy L. White Title: Chief Operating Officer

11

EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle Sacramento, CA 95826	$	44,800,000
Aspen Court	2305 Ashcroft Arlington, TX 76006	$	5,700,000
Braesridge	11100 Braesridge Houston, TX 77071	$	14,650,00
Crown Pointe	3788 NE 4th Street Renton, WA 98056	$	11,900,000
Derby Park	606 W. Safari Parkway Grand Prairie, TX 75050	$	15,900,000
Hilltop	500 Monroe Avenue NE Renton, WA 98056	$	11,000,000
Riverwood	1045 Holcomb Bridge Road Roswell, GA 30076	$	16,750,000
The Summit	1057 Americana Lane Mesquite, TX 75150	$	12,250,000
Summit Ridge	1604 Ridge Haven Drive Arlington, TX 76011	$	11,000,000
Village at Cliffdale	567 Cutchen Lane Fayetteville, NC 28314	$	16,500,000
Beaumont	8504 82nd Street, S.W. Lakewood, WA 98498	$	15,200,000
Chelsea Park	11000 Crescent Moon Houston, TX 77064	$	7,700,000
Country Club Place	1111 Golfview Richmond, TX 77469	$	7,000,000
Dunwoody Pointe	7901 Roswell Road Atlanta, GA 30350	$	14,100,000
Stonegate	825 S. Alma School Road Mesa, AZ 85210	$	7,400,000
Trinity Park	5301 Creek Ridge Lane Raleigh, NC 27607	$	22,540,000
Arbor Terrace I	1800 Sidney Avenue Port Orchard, WA 98366	$	7,913,043
Arbor Terrace II	1790 Sidney Avenue Port Orchard, WA 98366	$	6,086,957
American Heritage	3325 Watkins Lake Road Waterford, MI 48328	$	5,200,000

A-1

Property Name	Property Address	Initial Valuation
Brandywine Creek	3075 Endenhall Way East Lansing MI 48823	$	20,200,000
Foothills Tennis Village	5 Marcia Way Roseville, CA 95747	$	22,600,000
Jamestown of St. Matthews	900 Milford Lane St. Matthews, KY 40207	$	17,100,000
Jamestown of Toledo	3215 Milstead Drive Toledo, OH 43606	$	7,300,000
Kings Gate	44090 Kings Gate Drive Sterling Heights, MI 48314	$	6,600,000
Lakewood	5735 Ridgeway Drive Haslett, MI 48840	$	5,900,000
Lancaster Commons	2489 Coral Avenue NE Salem, OR 97305	$	11,300,000
Lancaster Lakes	5147 Lancaster Hill Drive Clarkston, MI 48346	$	18,500,000
Nemoke Trail	1765 Nemoke Trail Haslett, MI 48840	$	19,000,000
Sugar Mill Creek	8500 Belcher Road Pinellas Park, FL 33781	$	10,600,000
Tualatin Heights	9301 SW Sagert Road Tualatin, OR 97062	$	14,575,000

A-2

FOURTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS FOURTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 14th day of May, 2002 by (i) (a) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) HERITAGE – ASPEN COURT L.P., an Arizona limited partnership (“Aspen”), (d) SOUTH WEST PROPERTIES, L.P., a Delaware limited partnership (“South West”), (e) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (f) HERITAGE – GENTRY PLACE L.P., an Arizona limited partnership (“Gentry Derby”), (g) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (h) UNITED DOMINION REALTY, L.P., a Virginia limited partnership (“UDR”), (i) HERITAGE – SMITH SUMMIT L.P., an Arizona limited partnership (“Smith Summit”), (j) UDR SUMMIT RIDGE, L.P., a Delaware limited partnership (“Summit Ridge”), (k) UDRT OF NORTH CAROLINA, L.L.C., a North Carolina limited liability company (“UDRT-NC”) (individually and collectively, Aspen, South West, Crown Pointe, Gentry Place, Hilltop, UDR, Smith Summit, Summit Ridge and UDRT-NC, “First Additional Borrower”), (l) UDR BEAUMONT, LLC, a Virginia limited liability company (“Beaumont”), (m) HERITAGE – CHELSEA PARK L.P., an Arizona limited partnership (“Chelsea”), (n) HERITAGE – COUNTRY CLUB PLACE L.P., an Arizona limited partnership (“Country Club”), (o) CONTEMPO HEIGHTS L.L.C., an Arizona limited liability company (“Contempo Stonegate”), (individually and collectively, Beaumont, Chelsea, Country Club and Contempo Stonegate, “Second Additional Borrower”), (p) HERITAGE – ARBOR TERRACE I, L.L.C., an Arizona limited liability company (“Arbor I”), (q) HERITAGE – ARBOR TERRACE II, L.L.C., an Arizona limited liability company (“Arbor II”), (r) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), and (s) JAMESTOWN OF ST. MATTHEWS LIMITED PARTNERSHIP, an Ohio limited partnership (“Jamestown of St. Matthews”) (individually and collectively, Arbor I, Arbor II, AAC, and Jamestown of St. Matthews, “Third Additional Borrower”) (individually and collectively, Original Borrower, First Additional Borrower, Second Additional Borrower and Third Additional Borrower, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, each First Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Original Borrower and First Additional Borrower added nine (9)

Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Derby, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDRT-NC, to the Collateral Pool.

     D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, each Second Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Original Borrower, First Additional Borrower and Second Additional Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Stonegate, and Trinity Park owned by UDRT-NC, to the Collateral Pool.

     F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, each Third Additional Borrower joined into the Master Agreement as if each were an Original Borrower.

     G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

     H. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     I. The parties are executing this Amendment to the Master Agreement to reflect a conversion of a portion of the Revolving Facility to the Base Facility Commitment.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Amendment and the Master Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Conversion. The Revolving Facility shall be reduced by, and the Base Facility Commitment shall be increased by, $150,000,000, and the definitions of “Revolving

2

Facility Commitment” and “Base Facility Commitment” are hereby replaced in their entirety by the following new definitions:

     “Base Facility Commitment” means $150,000,000, plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Articles III or VIII.

     “Revolving Facility Commitment” means an aggregate amount of $134,513,000, evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     Section 2. Notes. In connection with the conversion, Borrower has executed and delivered that certain Base Facility Note in the amount of $100,000,000, that certain Base Facility Note in the amount of $50,000,000, and that certain Amended and Restated Multifamily Revolving Facility Note in the amount of $134,513,000, each dated as of even date herewith.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation

By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Virginia limited partnership,
	its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Virginia
		corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer
HERITAGE — ASPEN COURT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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SOUTH WEST PROPERTIES, L.P.,
a Delaware limited partnership
By:	UDR HOLDINGS, LLC, a Virginia limited liability
	company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
AAC/FSC CROWN POINTE INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware limited
	liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
HERITAGE — GENTRY PLACE L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company
By:	AAC/FSC SEATTLE PROPERTIES, LLC, a Delaware
	limited liability company, its Managing Member
	By:	UNITED DOMINION REALTY, L.P., a Virginia
		limited partnership, its Managing Member
		By:	UNITED DOMINION REALTY TRUST, INC.,
			a Virginia corporation, its General Partner
			By:	/s/ Ella S. Neyland
			Name:	Ella S. Neyland
			Title:	Executive Vice President and Treasurer
UNITED DOMINION REALTY, L.P.,
a Virginia limited partnership, Sole Member
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Virginia corporation, General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
HERITAGE — SMITH SUMMIT L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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UDR SUMMIT RIDGE, L.P.,
a Delaware limited partnership
By:	SOUTH WEST REIT HOLDING, INC.
	a Texas corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
UDRT OF NORTH CAROLINA, L.L.C.,
a North Carolina limited liability company
By:	UDR OF NC, Limited Partnership,
	a North Carolina limited partnership, its Sole Member
	By:	UDR OF NORTH CAROLINA, INC.,
		a North Carolina corporation, its General Partner
		By: Name:	/s/ Ella S. Neyland Ella S. Neyland
		Title:	Executive Vice President and Treasurer
UDR BEAUMONT, LLC,
a Virginia limited liability company
By:	HERITAGE COMMUNITIES L.P.,
	a Delaware limited partnership, its Manager
	By:	ASR INVESTMENTS CORPORATION,
		a Maryland corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer

[Signatures Continue]

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HERITAGE — CHELSEA PARK L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By: Name:	/s/ Ella S. Neyland Ella S. Neyland
	Title:	Executive Vice President and Treasurer
HERITAGE — COUNTRY CLUB PLACE L.P.,
an Arizona limited partnership
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its General Partner
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
CONTEMPO HEIGHTS L.L.C.,
an Arizona limited liability company
By:	ASC PROPERTIES, INC.,
	an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer

[Signatures Continue]

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HERITAGE — ARBOR TERRACE I, L.L.C.,
an Arizona limited liability company
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
HERITAGE — ARBOR TERRACE II, L.L.C.,
an Arizona limited liability company
By:	HERITAGE SGP CORPORATION,
	an Arizona corporation, its Managing Member
	By:	/s/ Ella S. Neyland
	Name:	Ella S. Neyland
	Title:	Executive Vice President and Treasurer
AAC FUNDING PARTNERSHIP II,
a Delaware general partnership
By:	UNITED DOMINION REALTY, L.P.,
	a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC.,
		a Virginia corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Title:	Executive Vice President and Treasurer

[Signatures Continue]

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JAMESTOWN OF ST. MATTHEWS LIMITED PARTNERSHIP,
an Ohio limited partnership
By:	UNITED DOMINION REALTY, L.P.,
	a Virginia limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC.,
		a Virginia corporation, its General Partner
		By: Name:	/s/ Ella S. Neyland Ella S. Neyland
		Title:	Executive Vice President and Treasurer

[Signatures Continue]

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LENDER

ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership

By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By: Name:	/s/ Shelly Eisenberg Shelly Eisenberg
	Title:	Vice President

11

FIFTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

THIS FIFTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 8th day of October, 2004 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), and (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities and UDR Texas, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage — Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage - Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage - - Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage - Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage — Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage — Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage — Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

I. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

J. The parties are executing this Amendment to the Master Agreement to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

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

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consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Release of Mortgaged Properties and Jamestown of St. Matthews LP. American Heritage, Jamestown of St. Matthews, Kings Gate, and Lakewood are hereby released from the Collateral Pool under the Master Agreement. Jamestown of St. Matthews LP is hereby released from each of the Loan Documents as a Borrower.

     Section 2. Addition of Mortgaged Properties, Heritage Community and UDR Texas. Alexander Court and Meadows at Kildaire are hereby added to the Collateral Pool as additional Mortgaged Properties under the Master Agreement. Both Heritage Communities and UDR Texas hereby join the Master Agreement as a Borrower.

     Section 3. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with Exhibit A to this Amendment.

     Section 4. 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 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.

     Section 7. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER

UNITED DOMINION REALTY TRUST, INC., a Maryland corporation

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

WOODLAKE VILLAGE, L.P., a California limited partnership

By: UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner

By: UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

AAC/FSC CROWN POINTE INVESTORS, LLC,
a Washington limited liability company

By: AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company

By: AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

UNITED DOMINION REALTY, L.P.,
a Delaware limited partnership

By: UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

UDR OF NC, LIMITED PARTNERSHIP,
a North Carolina limited partnership

By: UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner

By: UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member

By: UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures Continue]

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AAC FUNDING PARTNERSHIP II,
a Delaware general partnership

By: AAC FUNDING II, INC., a Delaware corporation, its Managing Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

HERITAGE COMMUNITIES L.P.,
a Delaware limited partnership

By: ASR OF DELAWARE LLC,
a Delaware limited liability company,
its General Partner

By: ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership

By: UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures Continue]

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ACKNOWLEDGED

JAMESTOWN OF ST. MATTHEWS LIMITED PARTNERSHIP,
an Ohio limited partnership

By: UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner

By: UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner

By:		/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President—Finance & Treasurer

[Signatures Continue]

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LENDER

ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership

By: ACMC Realty, Inc., a California Corporation, its General Partner

By:	/s/ Larry R. Sneathern
	Larry R. Sneathern
	Senior Vice President

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EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle Sacramento, CA 95826	$	44,800,000
Aspen Court	2305 Ashcroft Arlington, TX 76006	$	5,700,000
Braesridge	11100 Braesridge Houston, TX 77071	$	14,650,00
Crown Pointe	3788 NE 4th Street Renton, WA 98056	$	11,900,000
Derby Park	606 W. Safari Parkway Grand Prairie, TX 75050	$	15,900,000
Hilltop	500 Monroe Avenue NE Renton, WA 98056	$	11,000,000
Riverwood	1045 Holcomb Bridge Road Roswell, GA 30076	$	16,750,000
The Summit	1057 Americana Lane Mesquite, TX 75150	$	12,250,000
Summit Ridge	1604 Ridge Haven Drive Arlington, TX 76011	$	11,000,000
Village at Cliffdale	567 Cutchen Lane Fayetteville, NC 28314	$	16,500,000
Beaumont	8504 82nd Street, S.W. Lakewood, WA 98498	$	15,200,000
Chelsea Park	11000 Crescent Moon Houston, TX 77064	$	7,700,000
Country Club Place	1111 Golfview Richmond, TX 77469	$	7,000,000
Dunwoody Pointe	7901 Roswell Road Atlanta, GA 30350	$	14,100,000
Stonegate	825 S. Alma School Road Mesa, AZ 85210	$	7,400,000
Trinity Park	5301 Creek Ridge Lane Raleigh, NC 27607	$	22,540,000
Arbor Terrace I	1800 Sidney Avenue Port Orchard, WA 98366	$	7,913,043
Arbor Terrace II	1790 Sidney Avenue Port Orchard, WA 98366	$	6,086,957
Brandywine Creek	3075 Endenhall Way East Lansing MI 48823	$	20,200,000
Foothills Tennis Village	5 Marcia Way Roseville, CA 95747	$	22,600,000
Jamestown of Toledo	3215 Milstead Drive Toledo, OH 43606	$	7,300,000
Lancaster Commons	2489 Coral Avenue NE Salem, OR 97305	$	11,300,000
Lancaster Lakes	5147 Lancaster Hill Drive Clarkston, MI 48346	$	18,500,000

A-1

Property Name	Property Address	Initial Valuation
Nemoke Trail	1765 Nemoke Trail Haslett, MI 48840	$	19,000,000
Sugar Mill Creek	8500 Belcher Road Pinellas Park, FL 33781	$	10,600,000
Tualatin Heights	9301 SW Sagert Road Tualatin, OR 97062	$	14,575,000
Alexander Court	135 Reynoldsburg-New Albany Road Reynoldsburg, OH 43068	$	18,520,550
Meadows at Kildaire	2600 Harvest Creek Place Apex, NC 27539	$	20,109,220

A-2

SIXTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

THIS SIXTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 1^st day of December, 2004 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), and (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, and UDR Texas, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

J. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

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K. The parties are executing this Amendment to the Master Agreement to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

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. Release of Mortgaged Properties. Brandywine Creek and Stonegate are hereby released from the Collateral Pool under the Master Agreement.

     Section 2. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with Exhibit A to this Amendment.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Scott A. Shanaberger
Name:	Scott A. Shanaberger
Title:	Senior Vice President and Chief Accounting Officer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By: Name:	/s/ Scott A. Shanaberger Scott A. Shanaberger
		Title:	Senior Vice President and Chief Accounting Officer
AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Scott A. Shanaberger
	Name:	Scott A. Shanaberger
	Title:	Senior Vice President and Chief Accounting Officer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Scott A. Shanaberger
	Name:	Scott A. Shanaberger
	Title:	Senior Vice President and Chief Accounting Officer
UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Scott A. Shanaberger
	Name:	Scott A. Shanaberger
	Title:	Senior Vice President and Chief Accounting Officer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By: Name:	/s/ Scott A. Shanaberger Scott A. Shanaberger
			Title:	Senior Vice President and Chief Accounting Officer

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By:	/s/ Scott A. Shanaberger
	Name:	Scott A. Shanaberger
	Title:	Senior Vice President and Chief Accounting Officer
HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By: Name:	/s/ Scott A. Shanaberger Scott A. Shanaberger
		Title:	Senior Vice President and Chief Accounting Officer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By:	/s/ Scott A. Shanaberger
	Name:	Scott A. Shanaberger
	Title:	Senior Vice President and Chief Accounting Officer

[Signatures Continue]

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Sharlene G. Bloom
	Name:	Sharlene G. Bloom
	Title:	Vice President

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EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle	$44,800,000
	Sacramento, CA 95826
Aspen Court	2305 Ashcroft	$5,700,000
	Arlington, TX 76006
Braesridge	11100 Braesridge	$14,650,00
	Houston, TX 77071
Crown Pointe	3788 NE 4th Street	$11,900,000
	Renton, WA 98056
Derby Park	606 W. Safari Parkway	$15,900,000
	Grand Prairie, TX 75050
Hilltop	500 Monroe Avenue NE	$11,000,000
	Renton, WA 98056
Riverwood	1045 Holcomb Bridge Road	$16,750,000
	Roswell, GA 30076
The Summit	1057 Americana Lane	$12,250,000
	Mesquite, TX 75150
Summit Ridge	1604 Ridge Haven Drive	$11,000,000
	Arlington, TX 76011
Village at Cliffdale	567 Cutchen Lane	$16,500,000
	Fayetteville, NC 28314
Beaumont	8504 82nd Street, S.W.	$15,200,000
	Lakewood, WA 98498
Chelsea Park	11000 Crescent Moon	$7,700,000
	Houston, TX 77064
Country Club Place	1111 Golfview	$7,000,000
	Richmond, TX 77469
Dunwoody Pointe	7901 Roswell Road	$14,100,000
	Atlanta, GA 30350
Trinity Park	5301 Creek Ridge Lane	$22,540,000
	Raleigh, NC 27607
Arbor Terrace I	1800 Sidney Avenue	$7,913,043
	Port Orchard, WA 98366
Arbor Terrace II	1790 Sidney Avenue	$6,086,957
	Port Orchard, WA 98366
Foothills Tennis Village	5 Marcia Way	$22,600,000
	Roseville, CA 95747
Jamestown of Toledo	3215 Milstead Drive	$7,300,000
	Toledo, OH 43606
Lancaster Commons	2489 Coral Avenue NE	$11,300,000
	Salem, OR 97305
Lancaster Lakes	5147 Lancaster Hill Drive	$18,500,000
	Clarkston, MI 48346
Nemoke Trail	1765 Nemoke Trail	$19,000,000
	Haslett, MI 48840
Sugar Mill Creek	8500 Belcher Road	$10,600,000
	Pinellas Park, FL 33781

A-1

Property Name	Property Address	Initial Valuation
Tualatin Heights	9301 SW Sagert Road	$14,575,000
	Tualatin, OR 97062
Alexander Court	135 Reynoldsburg-New Albany Road	$18,520,550
	Reynoldsburg, OH 43068
Meadows at Kildaire	2600 Harvest Creek Place	$20,109,220
	Apex, NC 27539

A-2

SEVENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

THIS SEVENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 8^th day of December, 2004 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), and (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas and UDR Tennessee, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of even date herewith, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

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L. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

M. The parties are executing this Amendment to the Master Agreement to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth herein.

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 10. Release of Mortgaged Properties. Lancaster Lakes and Nemoke Trail are hereby released from the Collateral Pool under the Master Agreement.

     Section 11. Addition of Mortgaged Properties. Carrington Hills and Colonnade are hereby added to the Collateral Pool as additional Mortgaged Properties under the Master Agreement.

     Section 12. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with Exhibit A to this Amendment.

     Section 4. Definitions. The following is hereby added to Article I of the Master Agreement immediately preceding the definition of “Multifamily Residential Property:”

     “Multifamily REIT Preferred Interest” means a preferred equity interest: (a) owned by a member of the Consolidated Group; (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily residential apartment communities; (c) having trading privileges on a national securities exchange or that is the subject of price quotations in the over-the-counter market (including the NASDAQ National Market) as reported by the National Association of Securities Dealers Automated Quotation System; and (d) not subject to restrictions (whether contractual or under Applicable Law) on sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would exceed 90 days from the time of purchase, that would otherwise prevent such preferred equity interests from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to preferred equity interests that could be sold pursuant to a registration or an available exemption under the Securities Act of 1933, as amended.

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     Section 5. Financial Definitions. Section 15.01 of the Master Agreement IS hereby deleted in its entirety and restated as follows:

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at least A-2 (and not lower than A-3) or the equivalent thereof or from Moody’s is at least P-2 (and not lower than P-3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A-2 (and not lower than A-3) or the equivalent thereof by S&P or at least P-2 (and not lower than P-3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A- (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state, or other income taxes plus depreciation, amortization and other non

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cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Operating Income” means, for any period for any multifamily asset of the Consolidated Group, an amount equal to (i) the aggregate rental and other income from the operation of such asset during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of such asset (including, without limitation, real estate taxes, a 3% management fee, and bad debt expenses) during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis. For properties held in non-wholly owned subsidiaries, Borrower’s share of Consolidated Net Operating Income will be included.

     “Consolidated Net Operating Income from Unencumbered Pool Assets” (i) the aggregate rental and other income from the operation of the Unencumbered Pool Assets during such period; minus all expenses and other proper charges incurred in

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connection with the operation of the Unencumbered Pool Assets (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

     “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

     “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), but excluding obligations in respect of letters of credit issued for the payment of real estate taxes, special assessments on real properties and utility deposits, in an aggregate amount not to exceed $20,000,000, (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person and (x) all obligations of such person owing under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person).

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     “Development Property” means a Real Property currently under development (or in the pre-development phase) as a Multifamily Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following clauses (b) or (c) owned by any member of the Consolidated Group for such period minus a reserve of $125 per apartment unit located on a Property, multiplied by (ii) 2 and divided by (iii) 8.25%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during this period of four consecutive fiscal quarters most recently ended (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c) the current book value of any Development Property (or Multifamily Property that was a Development Property at any time during the period of four consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such notes where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests); (h) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not already included. Notwithstanding the foregoing, the amount by which the value of the assets included under any of the preceding clauses (d), (e), (f), (g) and (i) (excluding any promissory note secured by a Lien on a Multifamily Property and any raw land which such Person intends to develop as a Multifamily Property), including the Borrower’s pro rata share of any such assets included under the preceding clause (i), would, in the aggregate, account for more than 5.0% of Gross Asset Value shall be excluded for purposes of determining Gross Asset Value.

     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Development Properties would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of raw land would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool; (c) the amount by which the value of Properties that are developed but that are not

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Multifamily Properties would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool; (d) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) promissory notes, including any secured by a Mortgage, payable to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower, and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 15.0% of Gross Asset Value of the Unencumbered Pool; (e) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (f) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; and (g) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of promissory notes that are not secured by a Mortgage would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool. In addition, Gross Asset Value of the Unencumbered Pool shall be determined without including (or otherwise giving credit to) any Unencumbered Pool Assets owned by a Subsidiary that is not a Guarantor if such Subsidiary is an obligor, as of the relevant date of determination, with respect to any Debt (other than Secured Debt that is Nonrecourse Indebtness and those items of Debt set forth in clauses (c) and (d) of the definition of the term Debt). In addition to the foregoing limitations, the amount by which the value of Development Properties, Properties that are developed but that are not Multifamily Properties, raw land, promissory notes and marketable securities (including Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 25.0% of Gross Asset Value of the Unencumbered Pool shall be excluded for purposes of determining Gross Asset Value of the Unencumbered Pool. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties that are developed, but that are not Multifamily Properties, must exceed 85.0%. Any Multifamily Property or other such Property otherwise includable in determination of Gross Asset Value of the Unencumbered Pool, but for noncompliance with the Occupancy Rate requirement in the preceding sentence, shall be considered to be a Development Property for purposes of determining Gross Asset Value of the Unencumbered Pool (with the value of such Multifamily Properties of other Properties be determined in a manner consistent with clause (a) of the definition of Gross Asset Value).

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any equity interest in another

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Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale or financing by a member of the Consolidated Group or merchandise or services, and

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monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property, (iv) raw land, (v) promissory notes and (vi) marketable securities (including Multifamily REIT Preferred Interests); (b) neither such asset, nor any interest of any member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 66.67% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually, or collectively, materially impair the value of such Property.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

     Section 6. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, Consolidated Funded Debt to Gross Asset Value shall not exceed 60%.

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     Section 7. Consolidated Total Fixed Charge Coverage Ratio. Section 15.07 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Adjusted EBITDA to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

     Section 8. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool . As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool Assets shall not exceed 60%.

     Section 9. Minimum Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.09 Minimum Unencumbered Interest Coverage Ratio. The ratio of (i) Consolidated Net Operating Income attributable to Unencumbered Pool Assets and income attributable to promissory notes and marketable securities (including Multifamily REIT Preferred Interests) included as Unencumbered Pool Assets, in each case for the two fiscal quarter period most recently ending (annualized) to (ii) Consolidated Interest Expense relating to Consolidated Unsecured Debt of the Consolidate Group, including without limitation, interest expense, if any, attributable to such promissory notes and marketable securities (including Multifamily REIT Preferred Interest), on a consolidated basis for such period (all of the foregoing as annualized), to be less than 1.75 to 1.0 at the end of any fiscal quarter.

     Section 10. 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 11. 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 12. 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.

     Section 13. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President — Finance & Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
			Title:	Senior Vice President - Finance & Treasurer

[Signatures Continue]

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Sharlene G. Bloom
	Name:	Sharlene G. Bloom
	Title:	Vice President

16

EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle	$44,800,000
	Sacramento, CA 95826
Aspen Court	2305 Ashcroft	$5,700,000
	Arlington, TX 76006
Braesridge	11100 Braesridge	$14,650,00
	Houston, TX 77071
Crown Pointe	3788 NE 4th Street	$11,900,000
	Renton, WA 98056
Derby Park	606 W. Safari Parkway	$15,900,000
	Grand Prairie, TX 75050
Hilltop	500 Monroe Avenue NE	$11,000,000
	Renton, WA 98056
Riverwood	1045 Holcomb Bridge Road	$16,750,000
	Roswell, GA 30076
The Summit	1057 Americana Lane	$12,250,000
	Mesquite, TX 75150
Summit Ridge	1604 Ridge Haven Drive	$11,000,000
	Arlington, TX 76011
Village at Cliffdale	567 Cutchen Lane	$16,500,000
	Fayetteville, NC 28314
Beaumont	8504 82nd Street, S.W.	$15,200,000
	Lakewood, WA 98498
Chelsea Park	11000 Crescent Moon	$7,700,000
	Houston, TX 77064
Country Club Place	1111 Golfview	$7,000,000
	Richmond, TX 77469
Dunwoody Pointe	7901 Roswell Road	$14,100,000
	Atlanta, GA 30350
Trinity Park	5301 Creek Ridge Lane	$22,540,000
	Raleigh, NC 27607
Arbor Terrace I	1800 Sidney Avenue	$7,913,043
	Port Orchard, WA 98366
Arbor Terrace II	1790 Sidney Avenue	$6,086,957
	Port Orchard, WA 98366
Foothills Tennis Village	5 Marcia Way	$22,600,000
	Roseville, CA 95747
Jamestown of Toledo	3215 Milstead Drive	$7,300,000
	Toledo, OH 43606
Lancaster Commons	2489 Coral Avenue NE	$11,300,000
	Salem, OR 97305
Sugar Mill Creek	8500 Belcher Road	$10,600,000
	Pinellas Park, FL 33781
Tualatin Heights	9301 SW Sagert Road	$14,575,000
	Tualatin, OR 97062
Alexander Court	135 Reynoldsburg-New Albany Road	$18,520,550
	Reynoldsburg, OH 43068

A-1

Property Name	Property Address	Initial Valuation
Meadows at Kildaire	2600 Harvest Creek Place	$20,109,220
	Apex, NC 27539
Carrington Hills	4268 South Carothers Road	$24,900,000
	Franklin, TN
Colonnade	4100 Central Pike	$20,250,000
	Nashville, TN

A-2

EIGHTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

THIS EIGHTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is made as of the 1^st day of July, 2005 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), and (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas and UDR Tennessee, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of December 8, 2004, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

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L. Borrower entered into that certain Seventh Amendment to Master Credit Facility Agreement dated as of December 8, 2004 to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth therein.

M. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

N. Pursuant to the terms of the Master Agreement, Borrower intends to release that certain Mortgaged Property commonly known as The Summit (the “Release Property”) from the Collateral Pool and add that certain multifamily Residential Property commonly known as Sierra Canyon (the “Additional Property”) to the Collateral Pool, thereby effecting a substitution of Collateral (the “Substitution”). The terms and provisions of the Master Agreement require that the Substitution occur simultaneously.

O. Subject to the terms of and conditions of that certain Escrow Agreement by and between Borrower, Lender and Fannie Mae dated as of even date herewith (the “Escrow Agreement”), Lender has agreed to permit Borrower to release the Release Property prior to the addition of the Additional Property provided that Borrower comply with the terms of the Escrow Agreement.

P. The parties are executing this Amendment to the Master Agreement to reflect (i) the release of the Release Property, owned by Smith Summit, from the Collateral Pool, and (ii) the addition of the Additional Property, owned by UDR, to the Collateral Pool.

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 13. Release of Mortgaged Property. The Release Property is hereby released from the Collateral Pool under the Master Agreement in accordance with the terms of the Escrow Agreement.

     Section 14. Addition of Mortgaged Property. The Additional Property is hereby added to the Collateral Pool as an additional Mortgaged Property under the Master Agreement in accordance with the terms of the Escrow Agreement.

     Section 15. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with Exhibit A to this Amendment.

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     Section 4. 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 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.

     Section 7. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President — Finance & Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
			Title:	Senior Vice President -Finance & Treasurer

[Signatures Continue]

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Larry R. Sneathern
	Name:	Larry R. Sneathern
	Title:	Senior Vice President

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EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle Sacramento, CA 95826	$	44,800,000
Aspen Court	2305 Ashcroft Arlington, TX 76006	$	5,700,000
Braesridge	11100 Braesridge Houston, TX 77071	$	14,650,00
Crown Pointe	3788 NE 4th Street Renton, WA 98056	$	11,900,000
Derby Park	606 W. Safari Parkway Grand Prairie, TX 75050	$	15,900,000
Hilltop	500 Monroe Avenue NE Renton, WA 98056	$	11,000,000
Riverwood	1045 Holcomb Bridge Road Roswell, GA 30076	$	16,750,000
Summit Ridge	1604 Ridge Haven Drive Arlington, TX 76011	$	11,000,000
Village at Cliffdale	567 Cutchen Lane Fayetteville, NC 28314	$	16,500,000
Beaumont	8504 82nd Street, S.W. Lakewood, WA 98498	$	15,200,000
Chelsea Park	11000 Crescent Moon Houston, TX 77064	$	7,700,000
Country Club Place	1111 Golfview Richmond, TX 77469	$	7,000,000
Dunwoody Pointe	7901 Roswell Road Atlanta, GA 30350	$	14,100,000
Trinity Park	5301 Creek Ridge Lane Raleigh, NC 27607	$	22,540,000
Arbor Terrace I	1800 Sidney Avenue Port Orchard, WA 98366	$	7,913,043
Arbor Terrace II	1790 Sidney Avenue Port Orchard, WA 98366	$	6,086,957
Foothills Tennis Village	5 Marcia Way Roseville, CA 95747	$	22,600,000
Jamestown of Toledo	3215 Milstead Drive Toledo, OH 43606	$	7,300,000
Lancaster Commons	2489 Coral Avenue NE Salem, OR 97305	$	11,300,000

A-1

Property Name	Property Address	Initial Valuation
Sugar Mill Creek	8500 Belcher Road Pinellas Park, FL 33781	$	10,600,000
Tualatin Heights	9301 SW Sagert Road Tualatin, OR 97062	$	14,575,000
Alexander Court	135 Reynoldsburg-New Albany Road Reynoldsburg, OH 43068	$	18,520,550
Meadows at Kildaire	2600 Harvest Creek Place Apex, NC 27539	$	20,109,220
Carrington Hills	4268 South Carothers Road Franklin, TN 37067	$	24,900,000
Colonnade	4100 Central Pike Nashville, TN	$	20,250,000
Sierra Canyon	17500 North 67th Avenue Glendale, Arizona 85308	To Be Supplemented

A-2

NINTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS NINTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is effective as of the 30th day of September, 2005 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), and (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas and UDR Tennessee, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of December 8, 2004, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

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L. Borrower entered into that certain Seventh Amendment to Master Credit Facility Agreement dated as of December 8, 2004 to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth therein.

M. Borrower entered into that certain Eighth Amendment to Master Credit Facility Agreement dated as of July 1, 2005 to reflect (i) the addition of the Mortgaged Property commonly known as Sierra Canyon, owned by UDR, to the Collateral Pool, and (ii) the release of the Mortgaged Property known as The Summit, owned by Heritage Communities, from the Collateral Pool.

N. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

O. The parties are executing this Amendment to the Master Agreement to reflect the modification of certain terms of the Master Agreement as set forth herein.

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. Financial Definitions. Section 15.01 of the Master Agreement is hereby deleted in its entirety and restated as follows:

     “1031 Property” means property held by a “qualified intermediary” in connection with the sale of such property by the Borrower, a Subsidiary or Unconsolidated Affiliate pursuant to, and qualifying for tax treatment under, Section 1031 of the Internal Revenue Code.

     “Condominium Property” means a Multifamily Property that has been converted into residential condominium units for the purpose of sale. For purposes of this definition and the definition of “Condominium Property Value” a Multifamily Property will be deemed “converted” into residential condominium units once both of the following have occurred: (a) notice of the conversion has been sent to the tenants of such Property; and (b) a declaration of condominium or other similar document is filed with the applicable Governmental Authority.

     “Condominium Property Value” means the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for the two quarter

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period annualized ending immediately prior to such conversion divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such conversion not to exceed 35% of the amount determined in accordance with the preceding clause (a), minus (c) 90% of the actual contractual sales price of each individual condominium unit sale prior to any deductions for commissions, fees and any other expenses; provided, however, no value will be attributed to such a Condominium Property 24 months after its conversion. In addition, no value shall be attributable to a Condominium Property at any time following the earlier of (x) all condominium units of such Property having been sold or otherwise conveyed, (y) the management of such Property having been turned over to such Property’s homeowners’ association and (z) less than 10% of the units remain unsold.

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (iii) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (iv) the Intangible Assets of the Consolidated Group.

     “Consolidated Assets” means the assets of the members of the Consolidated Group determined in accordance with GAAP on a consolidated basis.

     “Consolidated EBITDA” means for any period for the Consolidated Group, Consolidated Net Income (including Consolidated Net Income attributable to units of Condominium Properties prior to the sale thereof) excluding the following amounts (but only to the extent included in determining Consolidated Net Income for such period) (a) Consolidated Interest Expense; (b) all provisions for any Federal, state or other income taxes; (c) depreciation, amortization and other non-cash charges; (d) gains and losses on Investments and extraordinary gains and losses; (e) taxes on such excluded gains and tax deductions or credits on account of such excluded losses, in each case on a consolidated basis determined in accordance with GAAP; and (f) to the extent not already included in the immediately preceding clauses (b) through (e), the Borrower’s pro rata share of such items of each Unconsolidated Affiliate of the Borrower for such period. Consolidated EBITDA shall include gain or loss, in either case, realized on the sale of any portion of a Condominium Property (without duplication of income on condominium units).

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP (excluding (i) Debt consisting of contingent liabilities retained by the Borrower related to the sale of Hunting Ridge,

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Woodside and Twin Coves in an aggregate amount not to exceed $20,000,000 and (ii) the aggregate amount, not to exceed $20,000,000, available to be drawn under letters of credit issued in respect of normal operating expenses of such Person) plus the Borrower’s pro rata share of the Debt of any Unconsolidated Affiliate of the Borrower.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, (a) all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and capitalized interest expense (other than capitalized interest funded from a construction loan interest reserve account held by another lender and not included in the calculation of cash for balance sheet reporting purposes), in each case on a consolidated basis determined in accordance with GAAP plus (b) to the extent not already included in the foregoing clause (a), the Borrower’s pro rata share of all interest expense (determined in a manner consistent with this definition of Consolidated Interest Expense) for such period of Unconsolidated Affiliates of the Borrower.

     “Consolidated Net Income” means for any period, the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP, including the Borrower’s pro rata share of the net income of each Unconsolidated Affiliate of the Borrower for such period.

     “Consolidated Net Operating Income” means, for any period for any Multifamily Property owned by a member of the Consolidated Group or an Unconsolidated Affiliate, an amount equal to (a) the aggregate rental and other income from the operation of such Multifamily Property during such period; minus (b) all expenses and other proper charges incurred in connection with the operation of such Multifamily Property (including, without limitation, real estate taxes and bad debt expenses) during such period and an imputed management fee in the amount of 3.0% of the aggregate rents received for such Multifamily Property during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP. For purposes of determining Consolidated Net Operating Income, only the Borrower’s pro rata share of the Consolidated Net Operating Income of any such Property owned by an Unconsolidated Affiliate of the Borrower shall be used.

     “Consolidated Secured Debt” means, as of any given date, all Consolidated Funded Debt that is secured in any manner by any Lien.

     “Consolidated Total Fixed Charges” means for any period, the sum of (a) the cash portion of Consolidated Interest Expense paid during such period plus (b) regularly scheduled principal payments on Consolidated Funded Debt during such period (excluding any balloon, bullet or similar principal payment payable on any Consolidated

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Funded Debt which repays such Consolidated Funded Debt in full) plus (c) all cash dividends and distributions on Preferred Equity Interests of members of the Consolidated Group paid during such period, all on a consolidated basis determined in accordance with GAAP.

     “Consolidated Unsecured Debt” means, as of a given date, all Consolidated Funded Debt that is not Consolidated Secured Debt.

     “Debt” of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (d) all Capitalized Lease Obligations of such Person; (e) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property; (f) all obligations of such Person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn); (g) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person; (h) all obligations of others Guaranteed by such Person; (i) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person or which arise in connection with forward equity transactions; and (j) all obligations of such Person owning under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but is classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata share of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person). All Loans and Letter of Credit Liabilities shall constitute Debt of the Borrower.

     “Development Property” means (i) a Property currently under development (or in the pre-development phase) as a Multifamily Property and/or (ii) a Condominium Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following clauses (b) or (c) owned by any member of the Consolidated Group for such period, multiplied by (ii) 2 and divided by (iii) 7.50%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during the period of six consecutive fiscal quarters most recently ended (less any amounts paid as a

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purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c)(i) the Condominium Property Value of all Condominium Properties owned by any member of the Consolidated Group, (ii) the current book value of any other Development Property (or Multifamily Property that was a Development Property at any time during the period of six consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group and (iii) the Renovation Property Value of all Renovation Properties owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; (h) the value (based on the lower of cost market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such note where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Marketable Multifamily REIT Preferred Interests); and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not already included. Notwithstanding the foregoing, any determination of Gross Asset Value shall exclude any Investments held by the Borrower or any Subsidiary.

     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of the Unencumbered Pool Assets owned by Subsidiaries are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; and (c) the amount by which the value of Unencumbered Pool Assets that are Investments and other assets would, in the aggregate, account for more than 20.0% of the Gross Asset Value of the Unencumbered Pool; provided, the limitations contained in the immediately preceding clauses (a) and (b) shall not apply to 1031 Properties and the limitations contained in the immediately preceding clause (c) shall not apply to promissory notes secured by first Mortgages. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties, must exceed 80.0%.

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses,

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trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any equity interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Marketable Multifamily REIT Preferred Interest” means a Multifamily REIT Preferred Equity Interest: (a) having trading privileges on a national securities exchange or that is subject to price quotations in the over-the-counter market and (b) not subject to restrictions on the sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would exceed 90 days from the time of purchase, that would (whether contractual or under Applicable Law) otherwise prevent such Preferred Equity Interest from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to Preferred Equity Interests that could be sold pursuant to an available exemption under the Securities Act.

     “Multifamily REIT Preferred Interest” means any Preferred Equity Interest: (a) owned by a member of the Consolidated Group and (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily apartment communities.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of

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the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Renovation Property” mean a Property on which the existing building or other improvements or a portion thereof are undergoing renovation and redevelopment that will either (a) disrupt the occupancy of at least 30% of the square footage of such Property or (b) temporarily reduce the Consolidated Net Operating Income attributable to such Property by more that 30% as compared to the immediately preceding comparable prior period. A Property shall cease to be a Renovation Property upon the earliest to occur of (i) all improvements (other than tenant improvements on unoccupied space) related to the redevelopment of such Property having been substantially completed and (ii) once such Property has achieved an Occupancy Rate of 80.0% or more.

     “Renovation Property Value” means for a Renovation Property, the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for the two quarter period annualized ending immediately prior to the commencement of such renovation and redevelopment divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such renovation and redevelopment not to exceed 35% of the amount determined in accordance with the preceding clause (a); provided, however, (i) the value of (a) plus (b) above does not exceed 80% of the Borrower’s good faith determination of the pro forma Consolidated Net Operating Income of such Renovation Property (assuming the completion of all applicable renovation and redevelopment) divided by 7.50% and (ii) 18 months following the commencement of such renovation and redevelopment such property will cease to be a Renovation Property.

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property or a Renovation Property, (iv) raw land, (v) promissory notes (vi) marketable securities (including Marketable Multifamily REIT Preferred Interests) and (vii) Multifamily REIT Preferred Interests; (b) neither such asset, nor any interest of any member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such

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Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain the consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 51.0% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt), provided however, 1031 Properties will not be subject to the limitations contained in subclauses (i) and (ii) of this clause (d); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually or collectively, materially impair the value of such Property.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

     Section 2. Consolidated Adjusted Tangible Net Worth. Section 15.05 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth will not at any time be less than $1,200,000,000.”

     Section 3. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.06 Consolidated Funded Debt Ratio. The ratio of (i) Consolidated Funded Debt to (ii) Gross Asset Value, will not exceed 0.625 to 1.0 at any time; provided, however, that if such ratio is greater than 0.625 to 1.0 but less than 0.675 to 1.0, then such failure to comply with the foregoing covenant shall not constitute a Default or Event of Default so long as such ratio ceases to exceed 0.625 to 1.00 within 180 days following the date such ratio first exceeded 0.625 to 1.00.”

     Section 4. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. The ratio of (i) Gross Asset Value of the Unencumbered Pool to (ii) Consolidated Unsecured Debt, will not be less than 1.50 to 1.00 at the end of any fiscal quarter.”

     Section 5. Consolidated Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

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“[INTENTIONALLY DELETED]”

     Section 6. 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 7. 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 8. 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.

     Section 9. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President — Finance & Treasurer
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
			Title:	Senior Vice President — Finance & Treasurer

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer
HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By: Name:	/s/ Rodney A. Neuheardt Rodney A. Neuheardt
		Title:	Senior Vice President — Finance & Treasurer
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

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UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Rodney A. Neuheardt
	Name:	Rodney A. Neuheardt
	Title:	Senior Vice President — Finance & Treasurer

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive V.P. / COO

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TENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS TENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is effective as of the 3^rd day of July, 2006 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), and (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas and UDR Tennessee, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

     D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo

Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

     E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

     F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

     G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

     H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

     I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

     J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

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     K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of December 8, 2004, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

     L. Borrower entered into that certain Seventh Amendment to Master Credit Facility Agreement dated as of December 8, 2004 to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth therein.

     M. Borrower entered into that certain Eighth Amendment to Master Credit Facility Agreement dated as of July 1, 2005 to reflect (i) the addition of the Mortgaged Property commonly known as Sierra Canyon, owned by UDR, to the Collateral Pool, and (ii) the release of the Mortgaged Property known as The Summit, owned by Heritage Communities, from the Collateral Pool.

     N. Borrower entered into that certain Ninth Amendment to Master Credit Facility Agreement dated as of September 30, 2005 to reflect the modification of certain terms of the Master Agreement as set forth therein.

     O. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     P. The parties are executing this Amendment to the Master Agreement to reflect a conversion of a portion of the Revolving Facility Commitment to the Base Facility Commitment.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this Amendment and the Master Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 16. Conversion. The Revolving Facility Commitment shall be reduced by, and the Base Facility Commitment shall be increased by, $35,487,000, and the definitions of Base Facility Commitment and Revolving Facility Commitment are hereby replaced in their entirety with the following new definitions:

     “Base Facility Commitment” means $260,487,000 plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Article III or VIII.

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     “Revolving Facility Commitment” means an aggregate amount of $39,513,000, evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     Section 17. Base Facility Fee. The definition of “Base Facility Fee” is hereby replaced in its entirety with the following new definition:

     “Base Facility Fee” means (i) 50 basis points per annum (0.50%) with respect to the Base Facility Advances evidenced by (a) that certain Base Facility Note dated as of May 14, 2002 in the original principal amount of $100,000,000, and (b) that certain Base Facility Note dated as of May 14, 2002 in the original principal amount of $50,000,000, (ii) 35 basis points per annum (0.35%) with respect to the Base Facility Advances evidenced by (a) that certain Base Facility Note (titled “Multifamily Revolving Facility Note”) effective as of December 1, 2005 in the original principal amount of $75,000,000 and (b) that certain Base Facility Note dated as of July 3, 2006 in the original principal amount of $35,487,000, and (iii) for any Base Facility Advance drawn from any portion of the Base Facility Commitment increased under Article VIII or converted from any portion of the Revolving Facility Commitment after July 3, 2006, the number of basis points determined at the time of such increase by the Lender as the Base Facility Fee for such Base Facility Advances, provided that in no event shall the Base Facility Fee for Base Facility Advances converted from the Revolving Facility Commitment (expressed as a number of basis points) exceed the Revolving Facility Fee.

     Section 18. 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 19. 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 20. 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.

     Section 21. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware
	limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST,
		INC., a Maryland corporation, its General Partner
		By:	/s/ Justin R. Sato
		Name:	Justin R. Sato
		Title:	Vice President
AAC/FSC CROWN POINTE INVESTORS, LLC, a
Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation,
	its Administrative Member
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President

[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC,
a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware
	corporation, its Administrative Member
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President
UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Maryland corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President
UDR OF NC, LIMITED PARTNERSHIP, a North
Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited
	liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited
		partnership, its Sole Member
		By:	UNITED DOMINION REALTY
			TRUST, INC., a Maryland corporation, its General Partner
			By:	/s/ Justin R. Sato
			Name:	Justin R. Sato
			Title:	Vice President

[Signatures Continue]

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President
HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability
	company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland
		corporation, its Sole Member
		By:	/s/ Justin R. Sato
		Name:	Justin R. Sato
		Title:	Vice President
UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia
	corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President

[Signatures Continue]

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UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC.,
	a Maryland corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President

[Signatures Continue]

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President

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ELEVENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT

     THIS ELEVENTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is effective as of the 11^th day of August, 2006 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), and (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas and UDR Tennessee, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

     D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”), Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo

Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

     E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

     F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

     G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

     H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

     I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

     J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

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     K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of December 8, 2004, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

     L. Borrower entered into that certain Seventh Amendment to Master Credit Facility Agreement dated as of December 8, 2004 to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth therein.

     M. Borrower entered into that certain Eighth Amendment to Master Credit Facility Agreement dated as of July 1, 2005 to reflect (i) the addition of the Mortgaged Property commonly known as Sierra Canyon, owned by UDR, to the Collateral Pool, and (ii) the release of the Mortgaged Property known as The Summit, owned by Heritage Communities, from the Collateral Pool.

     N. Borrower entered into that certain Ninth Amendment to Master Credit Facility Agreement dated as of September 30, 2005 to reflect the modification of certain terms of the Master Agreement as set forth therein.

     O. Borrower entered into that certain Tenth Amendment to Master Credit Facility Agreement dated as of July 3, 2006 to reflect a conversion of a portion of the Revolving Facility Commitment to the Base Facility Commitment.

     P. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     Q. The parties are executing this Amendment to the Master Agreement to reflect (i) the release from the Collateral Pool of the Mortgaged Property commonly known as The Village at Cliffdale, located in Fayetteville County, North Carolina, and (ii) the addition to the Collateral Pool of the Mortgaged Property commonly known as Green Tree Place, located in Duval County, Florida (the “Green Tree Property”).

     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 22. Release of Mortgaged Property. The Mortgaged Property commonly known as The Village at Cliffdale, located in Fayetteville County, North Carolina, is hereby released from the Collateral Pool under the Master Agreement.

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     Section 23. Addition of Mortgaged Property. The Green Tree Property is hereby added to the Collateral Pool under the Master Agreement.

     Section 24. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 25. Special Representations with Respect to Green Tree Property. Borrower shall indemnify, hold harmless and defend Lender and its successors or assigns from and against all proceedings, claims, damages, fees, and costs, including reasonable attorneys fees and expenses, arising directly or indirectly under that certain declaration entitled “Residential Protective Covenants and Restrictions” (the “Declaration”) dated October 23, 1983 which Declaration is recorded in Book 5715, Page 983, of the Real Estate Registry of Duval County, Florida. Such indemnification shall survive any transfer of title to Lender or its successors and assigns, whether by foreclosure or deed-in-lieu of foreclosure, provided that such indemnification shall automatically terminate upon Lender’s release of the Green Tree Property from the Collateral Pool and by recordation of the release of the lien of the Security Instrument securing the Green Tree Property.

     Section 26. 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 27. 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 28. 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.

     Section 29. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By: Name:	/s/ Justin R. Sato Justin R. Sato
Title:	Vice President

WOODLAKE VILLAGE, L.P., a California limited partnership
By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By: Name:	/s/ Justin R. Sato Justin R. Sato
		Title:	Vice President

AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President
[Signatures Continue]

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AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President

UNITED DOMINION REALTY, L.P., a Delaware limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President

UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By: Name:	/s/ Justin R. Sato Justin R. Sato
			Title:	Vice President
[Signatures Continue]

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AAC FUNDING PARTNERSHIP II, a Delaware general partnership
By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President

HERITAGE COMMUNITIES L.P., a Delaware limited partnership
By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
	By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By: Name:	/s/ Justin R. Sato Justin R. Sato
		Title:	Vice President

UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President
[Signatures Continue]

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UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By: Name:	/s/ Justin R. Sato Justin R. Sato
	Title:	Vice President
[Signatures Continue]

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LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President

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EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle	$	44,800,000
	Sacramento, CA 95826
Aspen Court	2305 Ashcroft	$	5,700,000
	Arlington, TX 76006
Braesridge	11100 Braesridge	$	14,650,00
	Houston, TX 77071
Crown Pointe	3788 NE 4th Street	$	11,900,000
	Renton, WA 98056
Derby Park	606 W. Safari Parkway	$	15,900,000
	Grand Prairie, TX 75050
Hilltop	500 Monroe Avenue NE	$	11,000,000
	Renton, WA 98056
Riverwood	1045 Holcomb Bridge Road	$	16,750,000
	Roswell, GA 30076
Summit Ridge	1604 Ridge Haven Drive	$	11,000,000
	Arlington, TX 76011
Beaumont	8504 82nd Street, S.W.	$	15,200,000
	Lakewood, WA 98498
Chelsea Park	11000 Crescent Moon	$	7,700,000
	Houston, TX 77064
Country Club Place	1111 Golfview	$	7,000,000
	Richmond, TX 77469
Dunwoody Pointe	7901 Roswell Road	$	14,100,000
	Atlanta, GA 30350
Trinity Park	5301 Creek Ridge Lane	$	22,540,000
	Raleigh, NC 27607
Arbor Terrace I	1800 Sidney Avenue	$	7,913,043
	Port Orchard, WA 98366
Arbor Terrace II	1790 Sidney Avenue	$	6,086,957
	Port Orchard, WA 98366
Foothills Tennis Village	5 Marcia Way	$	22,600,000
	Roseville, CA 95747
Jamestown of Toledo	3215 Milstead Drive	$	7,300,000
	Toledo, OH 43606
Lancaster Commons	2489 Coral Avenue NE	$	11,300,000
	Salem, OR 97305
Sugar Mill Creek	8500 Belcher Road	$	10,600,000
	Pinellas Park, FL 33781

A-1

Property Name	Property Address	Initial Valuation
Tualatin Heights	9301 SW Sagert Road	$	14,575,000
	Tualatin, OR 97062
Alexander Court	135 Reynoldsburg-New Albany Road	$	18,520,550
	Reynoldsburg, OH 43068
Meadows at Kildaire	2600 Harvest Creek Place	$	20,109,220
	Apex, NC 27539
Carrington Hills	4268 South Carothers Road	$	24,900,000
	Franklin, TN 37067
Colonnade	4100 Central Pike	$	20,250,000
	Nashville, TN
Sierra Canyon	17500 North 67th Avenue	$	17,402,983
	Glendale, Arizona 85308
Green Tree Place	9480 Princeton Square Boulevard	$	25,927,733
	Jacksonville, Florida 32256

A-2

REAFFIRMATION, JOINDER AND TWELFTH AMENDMENT TO
MASTER CREDIT FACILITY AGREEMENT

     THIS REAFFIRMATION, JOINDER AND TWELFTH AMENDMENT TO MASTER CREDIT FACILITY AGREEMENT (this “Amendment”) is effective as of the 29^th day of September, 2006 by and among (i) (a) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (b) WOODLAKE VILLAGE, L.P., a California limited partnership (“Woodlake”) (individually and collectively, UDRT and Woodlake, “Original Borrower”), (c) AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company (“Crown Pointe”), (d) AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company (“Hilltop”), (e) UNITED DOMINION REALTY, L.P., a Delaware limited partnership (“UDR”), (f) UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership (“UDR NC”), (g) AAC FUNDING PARTNERSHIP II, a Delaware general partnership (“AAC”), (h) HERITAGE COMMUNITIES L.P., a Delaware limited partnership (“Heritage Communities”), (i) UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership (“UDR Texas”), (j) UDR of TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”), and (k) UDR CALIFORNIA PROPERTIES, LLC, a Virginia limited liability company (“UDR California” or the “Additional Borrower”) (individually and collectively, Original Borrower, Crown Pointe, Hilltop, UDR, UDR NC, AAC, Heritage Communities, UDR Texas, UDR Tennessee and UDR California, “Borrower”) and (ii) ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership (“Lender”).

RECITALS

     A. Pursuant to that certain Master Credit Facility Agreement dated as of December 12, 2001, (as amended from time to time, the “Master Agreement”) Original Borrower and Lender agreed to the terms and conditions under which Lender would establish a credit facility in the original amount of $300,000,000 and make Base and Revolving Advances to Original Borrower.

     B. Pursuant to that certain First Reaffirmation and Joinder Agreement dated as of January 14, 2002, Heritage – Aspen Court L.P., an Arizona limited partnership (“Aspen”), South West Properties, L.P., a Delaware limited partnership (“South West”), Crown Pointe, Heritage – Gentry Place L.P., an Arizona limited partnership (“Gentry Place”), Hilltop, UDR, Heritage – Smith Summit L.P., an Arizona limited partnership (“Smith Summit”), UDR Summit Ridge L.P., a Delaware limited partnership (“Summit Ridge”) and UDR NC joined into the Master Agreement as if each were an Original Borrower.

     C. Pursuant to that certain First Amendment to Master Credit Facility Agreement dated as of January 14, 2002, Borrower added nine (9) Mortgaged Properties commonly known as Aspen Court owned by Aspen, Braesridge owned by South West, Crown Pointe owned by Crown Pointe, Derby Park owned by Gentry Place, Hilltop owned by Hilltop, Riverwood owned by UDR, The Summit owned by Smith Summit, Summit Ridge owned by Summit Ridge, and Village at Cliffdale owned by UDR NC, to the Collateral Pool.

     D. Pursuant to that certain Second Reaffirmation and Joinder Agreement dated as of January 24, 2002, UDR Beaumont, LLC, a Virginia limited liability company (“Beaumont”),

Heritage – Chelsea Park L.P., an Arizona limited partnership (“Chelsea Park”), Heritage – Country Club Place L.P., an Arizona limited partnership (“Country Club”), and Contempo Heights L.L.C., an Arizona limited liability company (“Contempo Heights”) joined into the Master Agreement as if each were an Original Borrower.

     E. Pursuant to that certain Second Amendment to Master Credit Facility Agreement dated as of January 24, 2002, Borrower added six (6) Mortgaged Properties commonly known as Beaumont owned by Beaumont, Chelsea Park owned by Chelsea, Country Club Place owned by Country Club, Dunwoody Pointe owned by UDRT, Stonegate owned by Contempo Heights, and Trinity Park owned by UDR NC, to the Collateral Pool.

     F. Pursuant to that certain Third Reaffirmation and Joinder Agreement dated as of March 21, 2002, Heritage – Arbor Terrace I, L.L.C., an Arizona limited liability company (“Arbor I”), Heritage – Arbor Terrace II, L.L.C., an Arizona limited liability company (“Arbor II”), AAC and Jamestown of St. Matthews Limited Partnership, an Ohio limited partnership (“Jamestown of St. Matthews LP”), joined into the Master Agreement as if each were an Original Borrower.

     G. Pursuant to that certain Third Amendment to Master Credit Facility Agreement dated as of March 21, 2002, Borrower added fourteen (14) Mortgaged Properties commonly known American Heritage owned by AAC, Arbor Terrace I owned by Arbor I, Arbor Terrace II owned by Arbor II, Brandywine owned by AAC, Foothills owned by AAC, Jamestown of St. Matthews owned by Jamestown of St. Matthews LP, Jamestown of Toledo owned by AAC, Kings Gate owned by AAC, Lakewood owned by AAC, Lancaster Commons owned by AAC, Lancaster Lakes owned by AAC, Nemoke owned by AAC, Sugar Mill Creek owned by AAC, and Tualatin Heights owned by UDR, to the Collateral Pool.

     H. Pursuant to that certain Fourth Amendment to Master Credit Facility Agreement dated as of May 14, 2002, the Revolving Facility was reduced by, and the Base Facility Commitment was increased by, $150,000,000.00.

     I. Borrower entered into that certain Fifth Amendment to Master Credit Facility Agreement dated as of October 8, 2004 to reflect (i) the succession by merger of (a) Heritage Communities to the rights and obligations under the Master Agreement of Arbor I, Arbor II, Aspen, Gentry Place, Smith Summit, Chelsea Park, Country Club and Beaumont and (b) UDR Texas to the rights and obligations of South West, Summit Ridge and Contempo Heights under the Master Agreement and (ii) the addition of the Mortgaged Properties commonly known as (a) Alexander Court, owned by UDR, and (b) Meadows at Kildaire, owned by UDR NC, to the Collateral Pool, (iii) the release of the Mortgaged Properties known as (a) American Heritage, owned by AAC, (b) Jamestown of St. Matthews, owned by Jamestown of St. Matthews LP, (c) Kings Gate, owned by AAC, and (d) Lakewood, owned by AAC, from the Collateral Pool, and (iv) the release of Jamestown of St. Matthews LP from each of the Loan Documents as a Borrower.

     J. Borrower entered into that certain Sixth Amendment to Master Credit Facility Agreement dated as of December 1, 2004 to reflect the release of the Mortgaged Properties

2

known as Brandywine Creek, owned by AAC, and Stonegate, owned by UDR Texas, from the Collateral Pool.

     K. Pursuant to that certain Fourth Reaffirmation and Joinder Agreement dated as of December 8, 2004, UDR Tennessee joined into the Master Agreement as if it were an Original Borrower.

     L. Borrower entered into that certain Seventh Amendment to Master Credit Facility Agreement dated as of December 8, 2004 to reflect (i) the addition of the Mortgaged Properties commonly known as Carrington Hills, owned by UDR, and Colonnade, owned by UDR Tennessee to the Collateral Pool, and (ii) the release of the Mortgaged Properties known as Lancaster Lakes, owned by AAC, and Nemoke Trail, owned by AAC, from the Collateral Pool, and (iii) the modification of other terms of the Master Agreement as set forth therein.

     M. Borrower entered into that certain Eighth Amendment to Master Credit Facility Agreement dated as of July 1, 2005 to reflect (i) the addition of the Mortgaged Property commonly known as Sierra Canyon, owned by UDR, to the Collateral Pool, and (ii) the release of the Mortgaged Property known as The Summit, owned by Heritage Communities, from the Collateral Pool.

     N. Borrower entered into that certain Ninth Amendment to Master Credit Facility Agreement dated as of September 30, 2005 to reflect the modification of certain terms of the Master Agreement as set forth therein.

     O. Borrower entered into that certain Tenth Amendment to Master Credit Facility Agreement dated as of July 3, 2006 to reflect a conversion of a portion of the Revolving Facility Commitment to the Base Facility Commitment.

     P. Borrower entered into that certain Twelfth Amendment to Master Credit Facility Agreement dated as of August 29, 2006 to reflect (i) the addition of the Mortgaged Property commonly known as Green Tree Place, owned by UDRT, to the Collateral Pool, and (ii) the release of the Mortgaged Property known as The Village at Cliffdale, owned by UDR NC, from the Collateral Pool.

     Q. 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 Agreement and Other Loan Documents, dated as of December 12, 2001 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     R. The parties are executing this Amendment to the Master Agreement to reflect a substitution under the Master Agreement as evidenced by (i) the release from the Collateral Pool of the Mortgaged Property commonly known as Beaumont, located in Lakewood, Washington (“Beaumont”), (ii) the addition to the Collateral Pool of the Mortgaged Property commonly known as Rancho Vallecitos, located in San Diego County, California (“Rancho Vallecitos”),

3

and (iii) the joinder of Additional Borrower to the Master Agreement as if it were an original Borrower.

     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 30. Release of Mortgaged Property. Beaumont is hereby released from the Collateral Pool under the Master Agreement.

     Section 31. Addition of Mortgaged Property. Rancho Vallecitos is hereby added to the Collateral Pool under the Master Agreement.

     Section 32. Reaffirmation. Each Borrower hereby reaffirms its obligations pursuant to the Master Agreement.

     Section 33. Joinder. Additional Borrower hereby joins in the Master Agreement as if it were Original Borrower thereunder and hereby agrees that all references in the Loan Documents to any Borrower shall include Additional Borrower including but not limited to the Master Agreement and the Note.

     Section 34. Amendment to Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached hereto.

     Section 35. Special Representations with Respect to Rancho Vallecitos. Borrower shall indemnify, hold harmless and defend Lender and its successors or assigns from and against all proceedings, claims, damages, fees, and costs, including reasonable attorneys fees and expenses, arising directly or indirectly under that certain unrecorded agreement referenced in that certain “Memorandum of Agreement for Easements, Licenses, and Maintenance of Facilities” (the “Memorandum”) dated June 24, 1986, executed by and between San Marcos 46, LSI-82-1, Alanda, and Alanda II and Successors, which Memorandum is recorded June 30, 1986 as Instrument No. 86-269853 of Official Records of San Diego County, California. Such indemnification shall survive any transfer of title to Lender or its successors and assigns, whether by foreclosure or deed-in-lieu of foreclosure, provided that such indemnification shall automatically terminate upon Lender’s release of Rancho Vallecitos from the Collateral Pool and by recordation of the release of the lien of the Security Instrument securing Rancho Vallecitos.

     Section 36. 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 37. 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 38. 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.

4

     Section 39. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

5

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

	BORROWER
	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
	By:	/s/ Michael A. Ernst
	Name:	Michael A. Ernst
	Title:	Executive Vice President, Treasurer & Chief Financial Officer
	WOODLAKE VILLAGE, L.P., a California limited partnership
	By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its General Partner
		By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
			By:	/s/ Michael A. Ernst
			Name:	Michael A. Ernst
			Title:	Executive Vice President, Treasurer & Chief Financial Officer
	AAC/FSC CROWN POINTE INVESTORS, LLC, a Washington limited liability company
	By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
[Signatures Continue]

6

	AAC/FSC HILLTOP INVESTORS, LLC, a Washington limited liability company
	By:	AAC SEATTLE I, INC., a Delaware corporation, its Administrative Member
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
	UNITED DOMINION REALTY, L.P., a Delaware limited partnership
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
	UDR OF NC, LIMITED PARTNERSHIP, a North Carolina limited partnership
	By:	UDRT OF DELAWARE 4 LLC, a Delaware limited liability company, its General Partner
		By:	UNITED DOMINION REALTY, L.P., a Delaware limited partnership, its Sole Member
			By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
				By:	/s/ Michael A. Ernst
				Name:	Michael A. Ernst
				Title:	Executive Vice President, Treasurer & Chief Financial Officer
[Signatures Continue]

7

	AAC FUNDING PARTNERSHIP II, a Delaware general partnership
	By:	AAC FUNDING II, INC., a Delaware corporation, its Managing Partner
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
	HERITAGE COMMUNITIES L.P., a Delaware limited partnership
	By:	ASR OF DELAWARE LLC, a Delaware limited liability company, its General Partner
		By:	ASR INVESTMENTS CORPORATION, a Maryland corporation, its Sole Member
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
	UDR TEXAS PROPERTIES, L.P., a Delaware limited partnership
	By:	UDR WESTERN RESIDENTIAL, INC., a Virginia corporation, its General Partner
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
[Signatures Continue]

8

	UDR OF TENNESSEE, L.P., a Virginia limited partnership
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
	UDR CALIFORNIA PROPERTIES, LLC, a Virginia limited liability company
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, Manager
		By:	/s/ Michael A. Ernst
		Name:	Michael A. Ernst
		Title:	Executive Vice President, Treasurer & Chief Financial Officer
[Signatures Continue]

9

LENDER
ARCS COMMERCIAL MORTGAGE CO., L.P., a California limited partnership
By:	ACMC Realty, Inc., a California Corporation, its General Partner
	By:	/s/ Timothy L. White
	Name:	Timothy L. White
	Title:	Executive Vice President

10

EXHIBIT A

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Woodlake Village	200 Bicentennial Circle	$	44,800,000
	Sacramento, CA 95826
Aspen Court	2305 Ashcroft	$	5,700,000
	Arlington, TX 76006
Braesridge	11100 Braesridge	$	14,650,00
	Houston, TX 77071
Crown Pointe	3788 NE 4th Street	$	11,900,000
	Renton, WA 98056
Derby Park	606 W. Safari Parkway	$	15,900,000
	Grand Prairie, TX 75050
Hilltop	500 Monroe Avenue NE	$	11,000,000
	Renton, WA 98056
Riverwood	1045 Holcomb Bridge Road	$	16,750,000
	Roswell, GA 30076
Summit Ridge	1604 Ridge Haven Drive	$	11,000,000
	Arlington, TX 76011
Chelsea Park	11000 Crescent Moon	$	7,700,000
	Houston, TX 77064
Country Club Place	1111 Golfview	$	7,000,000
	Richmond, TX 77469
Dunwoody Pointe	7901 Roswell Road	$	14,100,000
	Atlanta, GA 30350
Trinity Park	5301 Creek Ridge Lane	$	22,540,000
	Raleigh, NC 27607
Arbor Terrace I	1800 Sidney Avenue	$	7,913,043
	Port Orchard, WA 98366
Arbor Terrace II	1790 Sidney Avenue	$	6,086,957
	Port Orchard, WA 98366
Foothills Tennis Village	5 Marcia Way	$	22,600,000
	Roseville, CA 95747
Jamestown of Toledo	3215 Milstead Drive	$	7,300,000
	Toledo, OH 43606
Lancaster Commons	2489 Coral Avenue NE	$	11,300,000
	Salem, OR 97305
Sugar Mill Creek	8500 Belcher Road	$	10,600,000
	Pinellas Park, FL 33781
Tualatin Heights	9301 SW Sagert Road	$	14,575,000
	Tualatin, OR 97062

A-1

Property Name	Property Address	Initial Valuation
Alexander Court	135 Reynoldsburg-New Albany Road	$	18,520,550
	Reynoldsburg, OH 43068
Meadows at Kildaire	2600 Harvest Creek Place	$	20,109,220
	Apex, NC 27539
Carrington Hills	4268 South Carothers Road	$	24,900,000
	Franklin, TN 37067
Colonnade	4100 Central Pike	$	20,250,000
	Nashville, TN
Sierra Canyon	17500 North 67th Avenue	$	17,402,983
	Glendale, Arizona 85308
Green Tree Place	9480 Princeton Square Boulevard	$	25,927,733
	Jacksonville, Florida 32256
Rancho Vallecitos	823 N. Nordahl Road	$	26,332,932
	San Marcos, California 92069

A-2

EX-10.41

EXHIBIT 10.41

AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

by and between

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

and

GREEN PARK FINANCIAL LIMITED PARTNERSHIP,
a District of Columbia limited partnership,

dated as of

June 24, 2002

TABLE OF CONTENTS

	Page
RECITALS		1
ARTICLE I		2
ARTICLE II		20
SECTION 2.01 Revolving Facility Commitment		20
SECTION 2.02 Requests for Revolving Advances		20
SECTION 2.03 Maturity Date of Revolving Advances		20
SECTION 2.04 Interest on Revolving Facility Advances		20
SECTION 2.05 Coupon Rates for Revolving Advances		21
SECTION 2.06 Revolving Facility Note		21
SECTION 2.07 Extension of Revolving Facility Termination Date		22
ARTICLE III		22
SECTION 3.01 Base Facility Commitment		22
SECTION 3.02 Requests for Base Facility Advances		22
SECTION 3.03 Maturity Date of Base Facility Advances		23
SECTION 3.04 Interest on Base Facility Advances		23
SECTION 3.05 Coupon Rates for Base Facility Advances		23
SECTION 3.06 Base Facility Note		23
SECTION 3.07 Conversion of Commitment from Revolving Facility Commitment to Base Facility Commitment		23
SECTION 3.08 Limitations on Right to Convert		24
SECTION 3.09 Conditions Precedent to Conversion		24
SECTION 3.10 Defeasance		25
ARTICLE IV		32
SECTION 4.01 Rate Setting for an Advance		32
SECTION 4.02 Advance Confirmation Instrument for Revolving Advances		33
SECTION 4.03 Breakage and other Costs		34
ARTICLE V		34
SECTION 5.01 Initial Advance		34
SECTION 5.02 Future Advances		35
SECTION 5.03 Conditions Precedent to Future Advances		35
SECTION 5.04 Determination of Allocable Facility Amount and Valuations		36
ARTICLE VI		36
SECTION 6.01 Right to Add Collateral		36
SECTION 6.02 Procedure for Adding Collateral		36
SECTION 6.03 Conditions Precedent to Addition of an Additional Mortgaged Property to the Collateral Pool		38
ARTICLE VII		39
SECTION 7.01 Right to Obtain Releases of Collateral		39
SECTION 7.02 Procedure for Obtaining Releases of Collateral		39
SECTION 7.03 Conditions Precedent to Release of Collateral Release Property from the Collateral		40
SECTION 7.04 Substitutions		42
ARTICLE VIII		42
SECTION 8.01 Right to Increase Commitment		42
SECTION 8.02 Procedure for Obtaining Increases in Commitment		42
SECTION 8.03 Conditions Precedent to Increase in Commitment		43
i

	Page
ARTICLE IX		44
SECTION 9.01 Right to Complete or Partial Termination of Facilities		44
SECTION 9.02 Procedure for Complete or Partial Termination of Facilities		44
SECTION 9.03 Conditions Precedent to Complete or Partial Termination of Facilities		44
ARTICLE X		45
SECTION 10.01 Right to Terminate Credit Facility		45
SECTION 10.02 Procedure for Terminating Credit Facility		45
SECTION 10.03 Conditions Precedent to Termination of Credit Facility		46
ARTICLE XI		46
SECTION 11.01 Conditions Applicable to All Requests		46
SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request		47
SECTION 11.03 Delivery of Property-Related Documents		48
ARTICLE XII		49
SECTION 12.01 Representations and Warranties of the Borrower		49
SECTION 12.02 Representations and Warranties of the Borrower		53
SECTION 12.03 Representations and Warranties of the Lender		56
ARTICLE XIII		56
SECTION 13.01 Compliance with Agreements; No Amendments		56
SECTION 13.02 Maintenance of Existence		56
SECTION 13.03 Maintenance of Borrower Status		56
SECTION 13.04 Financial Statements; Accountants’ Reports; Other Information		56
SECTION 13.05 Certificate of Compliance		59
SECTION 13.06 Maintain Licenses		59
SECTION 13.07 Access to Records; Discussions With Officers and Accountants		59
SECTION 13.08 Inform the Lender of Material Events		60
SECTION 13.09 Intentionally Omitted		61
SECTION 13.10 Inspection		61
SECTION 13.11 Compliance with Applicable Laws		61
SECTION 13.12 Warranty of Title		61
SECTION 13.13 Defense of Actions		61
SECTION 13.14 Alterations to the Mortgaged Properties		62
SECTION 13.15 ERISA		62
SECTION 13.16 Loan Document Taxes		63
SECTION 13.17 Further Assurances		63
SECTION 13.18 Monitoring Compliance		63
SECTION 13.19 Leases		63
SECTION 13.20 Appraisals		63
SECTION 13.21 Transfer of Ownership Interests of the Borrower		63
SECTION 13.22 Change in Senior Management		65
SECTION 13.23 Date-Down Endorsements		65
SECTION 13.24 Geographical Diversification		65
SECTION 13.25 Ownership of Mortgaged Properties		66
SECTION 13.26 Facility Balancing		66
ARTICLE XIV		66
SECTION 14.01 Other Activities		66
SECTION 14.02 Value of Security		67
SECTION 14.03 Zoning		67
SECTION 14.04 Liens		67
SECTION 14.05 Sale		67
ii

	Page
SECTION 14.06 Intentionally Omitted		67
SECTION 14.07 Principal Place of Business		67
SECTION 14.08 Intentionally Omitted		67
SECTION 14.09 Change in Property Management		67
SECTION 14.10 Condominiums		67
SECTION 14.11 Restrictions on Distributions		67
SECTION 14.12 Conduct of Business		67
SECTION 14.13 Limitation on Unimproved Real Property and New Construction		67
SECTION 14.14 No Encumbrance of Collateral Release Property		68
ARTICLE XV		68
SECTION 15.01 Financial Definitions		68
SECTION 15.02 Compliance with Debt Service Coverage Ratios		73
SECTION 15.03 Compliance with Loan to Value Ratios		73
SECTION 15.04 Compliance with Concentration Test		73
SECTION 15.05 Consolidated Adjusted Tangible Net Worth		73
SECTION 15.06 Consolidated Funded Debt Ratio		73
SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio		73
SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio		73
SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio		73
ARTICLE XVI		74
SECTION 16.01 Standby Fee		74
SECTION 16.02 Termination and Origination Fees		74
SECTION 16.03 Due Diligence Fees		74
SECTION 16.04 Legal Fees and Expenses		74
SECTION 16.05 MBS-Related Costs		75
SECTION 16.06 Failure to Close any Request		75
SECTION 16.07 Other Fees		75
ARTICLE XVII		76
SECTION 17.01 Events of Default		76
ARTICLE XVIII		78
SECTION 18.01 Remedies; Waivers		78
SECTION 18.02 Waivers; Rescission of Declaration		78
SECTION 18.03 The Lender’s Right to Protect Collateral and Perform Covenants and Other Obligations		78
SECTION 18.04 No Remedy Exclusive		79
SECTION 18.05 No Waiver		79
SECTION 18.06 No Notice		79
SECTION 18.07 Application of Payments		79
ARTICLE XIX		79
SECTION 19.01 Special Pool Purchase Contract		79
SECTION 19.02 Assignment of Rights		80
SECTION 19.03 Release of Collateral		80
SECTION 19.04 Replacement of Lender		80
SECTION 19.05 Fannie Mae and Lender Fees and Expenses		80
SECTION 19.06 Third-Party Beneficiary		80
ARTICLE XX		81
SECTION 20.01 Insurance and Real Estate Taxes		81
SECTION 20.02 Replacement Reserves		81
ARTICLE XXI		81
iii

	Page
ARTICLE XXII		81
SECTION 22.01 Personal Liability of the Borrower		81
ARTICLE XXIII		82
SECTION 23.01 Counterparts		82
SECTION 23.02 Amendments, Changes and Modifications		82
SECTION 23.03 Payment of Costs, Fees and Expenses		82
SECTION 23.04 Payment Procedure		83
SECTION 23.05 Payments on Business Days		83
SECTION 23.06 Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial		83
SECTION 23.07 Severability		84
SECTION 23.08 Notices		84
SECTION 23.09 Further Assurances and Corrective Instruments		86
SECTION 23.10 Term of this Agreement		87
SECTION 23.11 Assignments; Third-Party Rights		87
SECTION 23.12 Headings		87
SECTION 23.13 General Interpretive Principles		87
SECTION 23.14 Interpretation		88
SECTION 23.15 Decisions in Writing		88
SECTION 23.16 Requests		88
iv

EXHIBIT A		Schedule of Initial Mortgaged Properties and Initial Valuations
EXHIBIT B		Base 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		Revolving Facility Note
EXHIBIT J		Tie-In Endorsement
EXHIBIT K	-	Conversion Request
EXHIBIT L	-	Conversion Amendment
EXHIBIT M		Rate Setting Form
EXHIBIT N		Rate Confirmation Instrument
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		Revolving Facility Termination Request
EXHIBIT X		Revolving Facility Termination Document
EXHIBIT Y		Credit Facility Termination Request
EXHIBIT Z		Intentionally Omitted
EXHIBIT AA		Independent Unit Encumbrances

v

AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT is made as of the 24th day of June, 2002, by (i) UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and Lender entered into that certain Master Credit Facility Agreement dated as of March 16, 1999, as amended by that certain First Amendment to Master Credit Facility Agreement dated as of June 29, 2001 (together, the “Original Agreement”), pursuant to which the Lender agreed to make credit available to the Borrower under the terms and conditions set forth in the Original Agreement.

     B. Pursuant to the Original Agreement, the Borrower expanded to the maximum amount of credit available to it from the Lender and the Borrower desires to further expand the amount of credit available to it under the Original Agreement and extend the term of the Original Agreement. In connection with such further expansion and extension, the Borrower has requested, and the Lender has agreed, that certain 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.

     C. The Borrower owns one or more Multifamily Residential Properties (capitalized terms used but not defined shall have the meanings ascribed to such terms in Article I of this Agreement) as more particularly described in Exhibit A to this Agreement.

     D. The Borrower has requested that the Lender establish a $200,000,000 Credit Facility in favor of the Borrower, comprised initially of a $200,000,000 Revolving Facility, all or part of which can be converted to a Base Facility in accordance with, and subject to, the terms and conditions of this Agreement and a $0 Base Facility.

     E. To secure the obligations of the Borrower under this Agreement and the other Loan Documents issued in connection with the Credit Facility, the Borrower shall create a Collateral Pool in favor of the Lender. The Collateral Pool shall be comprised of (i) Security Instruments on all of the Multifamily Residential Properties owned by the Borrower listed on Exhibit A to this Agreement and (ii) any other Security Documents executed by the Borrower pursuant to this Agreement or any other Loan Documents.

     F. Each of the Security Documents shall be cross-defaulted (i.e., a default under any Security Document, or under this Agreement, shall constitute a default under each Security Document, and this Agreement) and cross-collateralized (i.e., each Security Instrument shall secure all of the Borrower’s obligations under this Agreement and the other Loan Documents issued in connection with the Credit Facility) and it is the intent of the parties to this Agreement that the Lender may accelerate any Note without the necessity to accelerate any other Note and that in the exercise of its rights and remedies under the Loan Documents, Lender may 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.

     G. 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 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 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 Revolving Advance or a Base Facility Advance.

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

     “Affiliate” means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “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

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to

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

     “Aggregate Loan to Value Ratio for the Trailing 12 Month Period” 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. Lender shall determine the Allocable Facility Amount for each Mortgaged Property on the Initial Closing Date and on or before July 1 of each year (commencing July 1, 2003 during the term of this Agreement and at such other times as provided by this Agreement (the “Determination Date”). Once determined by Lender as aforesaid, the Allocable Facility Amount for each Mortgaged Property shall be promptly disclosed to Borrower by Lender and shall remain in effect until the next Determination Date. The Allocable Facility Amount for any Additional Mortgaged Property shall be 65% of the Valuation of such Mortgaged Property on the date such Mortgaged Property is added to the Collateral Pool.

     “Amortization Period” means, with respect to each Base Facility Advance, the period of 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

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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.

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

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

     “Base Facility Availability Period” means the period beginning on the Initial Closing Date and ending on the date five (5) years after the Initial Closing Date.

     “Base Facility Commitment” means $0, plus such amount as the Borrower may elect to add to the Base Facility Commitment in accordance with Articles III or VIII.

     “Base Facility Fee” means (i) 45 basis points for a Base Facility Advance drawn from the Base Facility Commitment initially available (whether drawn or undrawn) under this Agreement or converted from the Revolving Facility Commitment during the period ending on the date 12 months after the Initial Closing Date, and (ii) for any Base Facility Advance drawn from any portion of the Base Facility Commitment increased under Article VIII or converted from any portion of the Revolving Facility Commitment after the period ending on the date 12 months after the Initial Closing Date, the number of basis points determined at the time of such increase by the Lender as the Base Facility Fee for such Base Facility Advances, provided that in no event shall the Base Facility Fee for Base Facility Advances converted from the Revolving Facility Commitment (expressed as a number of basis points) exceed the Revolving Facility Fee.

     “Base 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 Base Facility Advance, to evidence the Borrower’s obligation to repay the Base Facility Advance.

     “Borrower” means United Dominion Realty Trust, Inc., a Virginia corporation.

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

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

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     “Cap 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 an Acquiring Person becomes (by acquisition, consolidation, merger or otherwise), directly or indirectly, the beneficial owner of more than 30% of the total Voting Equity Capital (or of any other Securities or ownership interest) of the Borrower then outstanding, or (b) 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 Borrower 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 Borrower 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 (b) 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 any of the Borrower’s obligations under the Loan Documents.

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

     (i) 67.5 basis points, multiplied by

     (ii) 65% of the Initial Valuation of the Multifamily Residential Property, as determined by the Lender.

     “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.

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

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

     “Collateral Substitution Request” shall have the meaning set forth in Section 7.04.

     “Commitment” means, at any time, the sum of the Base Facility Commitment and the Revolving Facility Commitment.

     “Complete Revolving 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) hereof.

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

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

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

     (a) The Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period is not less than 135%.

     (b) The Aggregate Loan to Value Ratio for the Trailing 12 Month Period does not exceed 65%.

     “Credit Facility” means the Base Facility and the Revolving 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 Revolving Facility Note or the Base 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.

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

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

     “Debt Service Coverage Ratio for the Trailing 12 Month Period” 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 Trailing 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 Revolving Advance, an amount equal to the excess of —

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

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

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

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

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

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

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“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)	each Revolving Advance shall be deemed to require level monthly payments of principal and interest (at the Coupon Rate for the Revolving Advance) in an amount necessary to fully amortize the original principal amount of the Revolving Advance over a 30-year period, with such amortization deemed to commence on the first day of the 12 month period; and
(ii)	each Base Facility Advance shall require level monthly payments of principal and interest (at the Coupon Rate for the Base Facility Advance) in an amount necessary to fully amortize the original principal amount of the Base 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 Fees 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 the Revolving Facility Commitment pursuant to Articles IX or X, an amount equal to the product obtained by multiplying

     (1) the reduction in the Revolving Facility Commitment, by

     (2) the Revolving Facility Fee in effect at such time, by

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

     1 (1 + r) n

      r

     r — Yield Rate

     n — the number of years, and any fraction thereof, remaining between the Closing Date for the reduction in the Revolving Facility Commitment and the Revolving Facility Termination Date.

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     The “Yield Rate” means the rate on the Three Month LIBOR on the second Business Day preceding, as applicable, (x) the date of the reduction in the Revolving Commitment, (y) the date of the Complete Revolving Facility Termination or (z) the date of Lender’s acceleration of the unpaid principal balance of the Revolving Facility Note.

     “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.

     “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, prior to the occurrence of an increase in the Commitment pursuant to Article VIII, a requirement that the Collateral Pool consist of at least seven (7) Mortgaged Properties located in at least four (4) states and five (5) SMSA’s and, upon the occurrence of any increase in the Commitment pursuant to Article VIII, such requirements as to the geographical diversity of the Collateral Pool as the Lender may reasonably determine and notify Borrower of prior to the time of the increase.

     “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 determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide, except that for these purposes the financial statements to be used need not be audited and paragraph (b) of such paragraph 3 shall be taken into account in the Lender’s discretion.

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

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     “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.

     “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 current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices);

          (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 Commonwealth of Virginia) 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

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          (f) as to any Person (“guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including any bank under any letter of credit) to induce the creation of a primary obligation (as defined below) with respect to which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing, or in effect guaranteeing, any indebtedness, lease, dividend or other obligation (“primary obligations”) of any third person (“primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, to (1) purchase any such primary obligation or any property constituting direct or indirect security therefor, (2) advance or supply funds for the purchase or payment of any such primary obligation or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (3) purchase property, securities or services 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 Revolving Advance made pursuant to the Original Agreement outstanding on the Initial Closing Date in the amount of $200,000,000.

     “Initial Advance Request” shall have the meaning set forth in Section 5.01.

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

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

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

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

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

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

     “Lease” means any lease, any sublease or subsublease, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Mortgaged Property, and every 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, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).

     “Loan Documents” means this Agreement, the Notes, the Advance Confirmation Instruments for the Revolving 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 for the Trailing 12 Month Period” 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.

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

     “Material Adverse Effect” means, with respect to any circumstance, act, condition or event of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or events, act or acts, condition or conditions, or circumstance or circumstances, whether or not related, a material adverse change in or a materially adverse effect upon any of (a) the business, operations, property or condition (financial or otherwise) of the Borrower, (b) the present or future ability of the Borrower to perform the Obligations for which it is liable, (c) the validity, priority, perfection or enforceability of this Agreement or any other Loan Document or the rights or remedies of the Lender under any Loan Document, or (d) the value of, or the Lender’s ability to have recourse against, any Mortgaged Property.

     “MBS” means a mortgage-backed security which is “backed” by an Advance which is secured 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 Base 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 Base Facility Advance as determined in accordance with Section 4.01.

     “Mortgaged Properties” means, collectively, the Additional 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 Sections 201 and 203 of Part III of the DUS Guide.

     “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

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period. If a Mortgaged Property is not owned by 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 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.

     “Note” means a Base Facility Note or the Revolving Facility Note.

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

     “Operating Expenses” means, for any period, with respect to any Multifamily Residential Property, all expenses in respect of the Multifamily Residential Property, as determined by the Lender in accordance with the method described in paragraph 3 of Section 403.02 of Part III of the DUS Guide (Estimated Expenses), including replacement reserves, if any, under the Replacement Reserve Agreements for the Mortgaged Properties.

     “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.

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

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

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

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

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     “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, and (iii) any other Liens approved by the Lender.

     “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 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).

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

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

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

     “Request” means a Collateral Addition Request, a Collateral Release Request, a Conversion Request, a Credit Facility Expansion Request, a Credit Facility Termination Request, a Future Advance Request, an Initial Advance Request or a Revolving Facility Termination Request.

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

     “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.

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

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

     “Revolving Facility Commitment” means an aggregate amount of $200,000,000 which shall be evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     “Revolving Facility Fee” means (i) 55 basis points per annum (0.55%) for a Revolving Advance drawn from the Revolving Facility Commitment initially available (whether drawn or undrawn) under this Agreement during the period ending on the date 12 months after the Initial Closing Date, (ii) for any extended term of the Revolving Facility, the number of basis points per annum determined by the Lender as the Revolving Facility Fee for such period, which fee shall be set by Lender not less than 30 days prior to the commencement of such period, and (iii) for any Revolving Advance drawn from any portion of the Revolving Facility Commitment increased under Article VIII after the date 12 months after the Initial Closing Date, the number of basis points per annum determined at the time of such increase by the Lender as the Revolving Facility Fee for such Revolving Advances.

     “Revolving 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 Revolving Advances.

     “Revolving Facility Termination Date” means the day ten (10) years, six (6) months and one (1) day after the Initial Closing Date, as such date may be extended pursuant to Section 2.07 of 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 Replacement Reserve Agreements and any other documents executed by a Borrower from time to time to secure any of 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

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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 Borrower, and (ii) any other individuals with responsibility for any of the functions typically performed in a corporation by the officers described in clause (i).

     “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 product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by (iii) the Unused Capacity for such month.

     “Subsidiary” means, as to any Person, any corporation, partnership, limited liability company or other entity of which securities or other ownership interest having an ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. Unless otherwise provided, references to a “Subsidiary” or “Subsidiaries” shall mean a Subsidiary or Subsidiaries of the Borrower.

     “Substitution Fee” means, with respect to a Multifamily Residential Property added to the Collateral Pool in accordance with Section 7.04

     (a) if the Additional Mortgaged Property is being added to the Collateral Pool in connection with a substitution prior to the second anniversary of the Initial Closing Date:

          (i) 50 basis points, multiplied by

          (ii) 65% of the Initial Valuation of the Multifamily Residential Property, as determined by the Lender.

     (b) if the Additional Mortgaged Property is being added to the Collateral Pool in connection with a substitution subsequent to the second anniversary of the Initial Closing Date:

          (i) 75 basis points, multiplied by

          (ii) 65% of the Initial Valuation of the Multifamily Residential Property, as determined by the Lender.

     “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.

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     “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 Base Facility Advances are Outstanding, the latest maturity date for any Base Facility Advance Outstanding, and, at any time during which Base Facility Advances are not Outstanding, the Revolving Facility Termination Date.

     “Three-Month LIBOR” 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 the 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 source reasonably selected by Lender which reasonably correlates (as to rate and volatility) historically to Three-Month LIBOR.

     “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 Lawyers Title/LandAmerica.

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

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

     “Transfer” means 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

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Property, or any portion thereof. “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 the undrawn amount of the Commitment available under this Agreement, without regard to any unclosed Requests or to the fact that a Request must satisfy conditions precedent.

     “Valuation” means, for any specified date, with respect to a Multifamily Residential Property, (a) if an Appraisal of the Multifamily Residential Property was more recently obtained than a Cap Rate for the Multifamily Residential Property, the Appraised Value of such Multifamily Residential Property, or (b) if a Cap Rate for the Multifamily Residential Property was more recently obtained than an Appraisal of the Multifamily Residential Property, the value derived by dividing—

(i)	the Net Operating Income of such Multifamily Residential Property for the Trailing 12 Month Period, by
(ii)	the most recent Cap Rate determined by the Lender.

Notwithstanding the foregoing, any Valuation for a Multifamily Residential Property calculated for a date occurring before the first anniversary of the date on which the Multifamily Residential Property becomes a part of the Collateral Pool shall equal the Appraised Value of such Multifamily Residential Property, unless the Lender determines that changed market or property conditions warrant that the value be determined as set forth in the preceding sentence. Any special risk factors taken into account in connection with the Initial Valuation of a Multifamily Residential Property shall apply to any subsequent Valuation of such Multifamily Residential Property unless Lender shall determine that such special risk factor no longer applies to such Multifamily Residential Property. If the Borrower does not accept Lender’s Valuation, the Borrower may require that the Lender obtain an additional Appraisal, if an Appraisal was the basis of the Valuation, or two Appraisals, if a Cap Rate was the basis of the Valuation. If the two appraisers do not agree on the valuation of the Mortgaged Property, the Lender shall appoint a third appraiser. If a third appraiser is appointed, such appraiser shall, within 30 days after appointment, decide which one of the valuations determined by the other two appraisers is closer to the valuation of the Mortgaged Property and the valuation so selected by the third appraiser shall be binding on the parties as the Valuation. The Borrower shall pay all of the Lender’s costs of obtaining any Appraisal or engaging any appraiser pursuant to this Section.

     “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).

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ARTICLE II
THE REVOLVING FACILITY COMMITMENT

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

SECTION 2.02 Requests for Revolving Advances. The Borrower shall request a Revolving Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

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

     (a) no earlier than the date which completes one full month after the Closing Date for the Revolving Advance; and

     (b) no later than the date which completes nine full months after the Closing Date for the Revolving 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 or February 29 in 2004 and any leap year thereafter.

SECTION 2.04 Interest on Revolving Facility Advances.

          (a) Discount. Each Revolving Advance shall be a discount loan. The original stated principal amount of a Revolving Advance shall be the sum of the Price of the Revolving Advance and the Discount of the Revolving Advance. The Price and Discount of each Revolving Advance shall be determined in accordance with the procedures set out in Section 4.01. The proceeds of the Revolving Advance made available by the Lender to the Borrower will equal the Price of the Revolving Advance. The entire unpaid principal of each Revolving Advance shall be due and payable by the Borrower to the Lender on the maturity date of the Revolving Advance. However, if the Borrower has requested that the maturing Revolving Advance (in whole or in part) be renewed with a new Revolving Advance or converted to a Base Facility Advance, to take effect on the maturity date of the maturing Revolving Advance, then the amount the Borrower is required to pay on account of the maturing Revolving Advance will be reduced by, as the case may, that amount of the Price of the new Revolving Advance allocable to the principal of the maturing Revolving Advance being

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renewed, or that amount of the net proceeds of the MBS related to the Base Facility Advance then converted from the maturing Revolving Advance.

          (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Borrower shall pay interest on the original stated principal amount of the Revolving Advance for the partial month period commencing on the Closing Date for the Revolving 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 Revolving Advance as determined in accordance with Section 2.05(b) and (ii) a rate reasonably determined by the Lender, based on the Lender’s cost of funds and approved in advance, in writing, by the Borrower, pursuant to the procedures mutually agreed upon by the Borrower and the Lender.

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

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

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

          (b) Notwithstanding anything to the contrary in this Section, if a Revolving Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Revolving Advance is the first day of the month following the month in which the Revolving Advance is made, the Coupon Rate for such Revolving Advance for such period shall be the greater of (i) the rate for the Revolving 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 Revolving Facility Note. The obligation of the Borrower to repay the Revolving Advances will be evidenced by the Revolving Facility Note. The Revolving Facility

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Note shall be payable to the order of the Lender and shall be made in the aggregate amount of the Revolving Facility Commitment.

SECTION 2.07 Extension of Revolving Facility Termination Date. The Borrower shall have the right to extend the Revolving Facility Termination Date for one (1) five (5) year period upon satisfaction of each of the following conditions:

          (a) The Borrower provides written notice to the Lender not less than thirty (30) nor more than ninety (90) days prior to the then effective Revolving Facility Termination Date requesting that the Revolving Facility Termination Date be extended.

          (b) No Event of Default or Potential Event of Default exists on either the date the notice required by paragraph (a) of this Section is given or on the then effective Revolving Facility Termination Date.

          (c) 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

          (d) 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 (a) of this Section is given and on the then effective Revolving Facility Termination Date.

Upon receipt of the notice required in paragraph (a) of this Section and upon compliance with the other conditions set forth above, the Revolving 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 Revolving Facility during the period after the then effective Revolving Facility Termination Date shall be acceptable to Lender in its discretion.

ARTICLE III
THE BASE FACILITY COMMITMENT

SECTION 3.01 Base Facility Commitment. Subject to the terms, conditions and limitations set forth in this Article, the Lender agrees to make Base Facility Advances to the Borrower from time to time during the Base Facility Availability Period. The aggregate original principal of the Base Facility Advances shall not exceed the Base Facility Commitment. The borrowing of a Base Facility Advance shall permanently reduce the Base Facility Commitment by the original principal amount of the Base Facility Advance. The Borrower may not re-borrow any part of the Base Facility Advance which it has previously borrowed and repaid. The Borrower shall be entitled to Base Facility Advances based on increased Valuations of the Mortgaged Properties.

SECTION 3.02 Requests for Base Facility Advances. The Borrower shall request a Base Facility Advance by giving the Lender an Initial Advance Request in accordance with Section 5.01 or a Future Advance Request in accordance with Section 5.02, as applicable.

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SECTION 3.03 Maturity Date of Base Facility Advances. The maturity date of each Base Facility Advance shall be the maturity date selected by the Borrower at the time of the making of each such Base Facility Advance, provided that such maturity date shall not be earlier than the 5th anniversary of such Base Facility Advance nor later than the 15th anniversary of the Initial Closing Date.

SECTION 3.04 Interest on Base Facility Advances.

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

          (b) Partial Month Interest. Notwithstanding anything to the contrary in this Section, if a Base Facility Advance is not made on the first day of a calendar month, and the MBS Issue Date for the MBS backed by the Base Facility Advance is the first day of the month following the month in which the Base Facility Advance is made, the Borrower shall pay interest on the original stated principal amount of the Base Facility Advance for the partial month period commencing on the Closing Date for the Base 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 Base Facility Advance described in the first sentence of this Section and (ii) a rate reasonably 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 Base Facility Advances. The Coupon Rate for a Base Facility Advance shall be the rate of interest applicable to such Base Facility Advance pursuant to Section 3.04.

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

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

          (a) Request. In order to convert all or a portion of the Revolving Facility Commitment to the Base 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 Revolving Advances Outstanding which will be prepaid on or before the Closing Date for the conversion as required by Section 3.08(c).

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

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

          (b) Minimum Request. Each Request for a conversion shall be in the minimum amount of $10,000,000.

          (c) Obligation to Prepay Revolving Advances. If, after the conversion, the aggregate unpaid principal balance of all Revolving Advances Outstanding will exceed the Revolving Facility Commitment, the Borrower shall be obligated to prepay, as a condition precedent to the conversion, an amount of Revolving 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 Revolving Facility Commitment to the Base 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 Revolving 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 Revolving 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

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

SECTION 3.10 Defeasance. If at any time the Borrower elects to convert all or a portion of the Revolving Facility Commitment to a Base Facility Commitment pursuant to Section 3.07 of this Agreement, or elects that any portion of any expansion of the Commitment shall be a Base Facility Commitment, the Conversion Request or the Credit Facility Expansion Request for the first Base Facility Commitment shall select defeasance or yield maintenance with respect to prepayments of Base Facility Advances. 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 Base Facility Commitment shall apply to all Base Facility Advances during the term of this Agreement. Base Facility Advances are not prepayable at any time, provided that, notwithstanding the foregoing, Borrower may prepay any Base Facility Advance during the last one hundred eighty (180) days of the term of such Base Facility Advance and provided that Base Facility Advances may be defeased pursuant to the terms and conditions of this Section. This Section 3.10 shall not apply to Mortgaged Properties released from a Security Instrument in connection with a substitution of Collateral pursuant to Section 7.04 of this Agreement.

     (a) Conditions. Subject to Section 3.10(d), 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 Borrower’s assets [except the Substitute Collateral] shall be released) upon the satisfaction of all of the following conditions:

     (1) Defeasance Notice. 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 Borrower desires to consummate the Defeasance. The Defeasance Closing Date specified by 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. Borrower shall also specify in the Defeasance Notice the name, address and telephone number of Borrower for notices pursuant to Section 3.10(g)(4). The form Defeasance Notice provided by Lender specifies: (i) which Mortgaged Properties Borrower proposes 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 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.

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Any applicable Defeasance Commitment fee must be paid by Borrower and received by Lender no later than the date and time when Lender receives the Defeasance Notice from 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 acceptable to Lender, Lender shall, with reasonable promptness, notify Borrower of such confirmation by signing the Defeasance Notice, attaching the Annual Yields for the Mortgage Payments beginning on the first day of the second calendar month after the Defeasance Closing Date and ending on the Stated Maturity Date (if a Fannie Mae Investment Security is offered as Substitute Collateral) and transmitting the signed Defeasance Notice to Borrower pursuant to Section 3.10(g)(4). If, after Lender has notified 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 Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.

     (3) Substitute Collateral. On or before the Defeasance Closing Date, 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 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 Base Facility Note subject to Defeasance. If the Substitute Collateral is issued in a certificated form and Borrower has possession of the certificate, the certificate shall be endorsed (either on the certificate or on a separate writing attached thereto) by 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 Borrower does not have possession of the certificate, 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. Borrower shall deliver to Lender on or before the Defeasance Closing Date the documents described in Section 3.10(b).

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

(A) the Next Scheduled P&I Payment;

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(B)	all other sums then due and payable under the Base Facility Note subject to Defeasance, the Security Instruments related to the Mortgaged Properties to be released; and
(C)	all costs and expenses incurred by Lender or Servicer in connection with the Defeasance, including the reasonable 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., Washington, D.C. time, on the Defeasance Closing Date, 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 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 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 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 Borrower, in form and substance satisfactory to Lender, that the Defeasance, including both Borrower’s 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

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

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

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

     (c) Release. Upon Borrower’s compliance with the requirements of Sections 3.10(a)(1) through (7), 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 Borrower’s assets [except the Substitute Collateral] shall be released). Lender shall, with reasonable promptness, execute and deliver to Borrower, at Borrower’s cost and expense, any additional documents reasonably requested by 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. 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 Base 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 Borrower’s compliance with the requirements of Section 3.10(a), Borrower shall assign all its obligations and rights under the relevant Base 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 Borrower and acceptable to Lender in its sole discretion. 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 Borrower to Successor Borrower of the Substitute Collateral, subject to the lien and security interest in favor of Lender, (ii) the

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assumption by Successor Borrower of all liabilities and obligations of Borrower under the relevant Base Facility Note, and (iii) the release by Lender of Borrower from all liabilities and obligations under the relevant Base Facility Note. Lender shall, at Borrower’s request and expense, execute and deliver releases, reconveyances and security interest terminations with respect to the released Mortgage Properties and all other collateral held by Lender (except the Defeasance Deposit). The Assignment and Assumption Agreement shall be executed by Lender with a counterpart to be returned by Lender to 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 Borrower for use as the Substitute Collateral, 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 Borrower timely pays the Defeasance Commitment Fee, and Lender and Borrower timely transmit a signed facsimile copy of the Defeasance Notice pursuant to Section 3.10(a)(2), but 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 Borrower’s default, as Lender’s sole and exclusive remedy, and, except as provided in Section 3.10(g)(2), Borrower shall be released from all further obligations under this Section 3.10. Borrower acknowledges that, from and after the date on which Lender has executed the Defeasance Notice under Section 3.10(a)(2) and 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. 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 Borrower’s default.

     (2) Third Party Costs. In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender and Servicer for all third party costs and expenses (other than financing costs covered by Section 3.10(g)(1) above), including attorneys’ fees and expenses, incurred by Lender in reliance on the executed Defeasance Notice, within 10 Business Days after 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.

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

     (4) Notice. The Defeasance Notice delivered pursuant to this Section 3.10(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, 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. Washington, D.C. 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. Washington, D.C. 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 Borrower’s good faith deposit to ensure performance of its obligations under this Section, which shall equal two percent

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(2%) of the aggregate unpaid principal balance of the Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date, if the Successor Borrower is designated by Borrower under Section 3.10(e), or one percent (1%) of the aggregate unpaid principal balance of the Base Facility Note subject to Defeasance as of the Defeasance Notice Effective Date if the Successor Borrower is designated by Lender under Section 3.10(e). No Defeasance Commitment Fee will be applicable if U.S. Treasury Securities are specified in the Defeasance Notice as the applicable Investment Security.

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

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

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 Base 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 180th 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.

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

     (13) The term “Stated Maturity Date” means the Maturity Date specified in the Base Facility Note subject to Defeasance determined without regard to Lender’s exercise of any right of acceleration of the Base 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 Base Facility Advance) or MBS Imputed Interest Rate (for a proposed Revolving Advance) for a Fannie Mae MBS backed by a proposed Advance. The Lender’s quote shall be based on (i) a solicitation of at least three (3) 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

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propose a MBS Pass-Through Rate (for a Base Facility Advance) or MBS Imputed Interest Rate (for a Revolving 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. Washington, D.C. time on any Business Day (“Rate Setting Date”). The Rate Setting Form contains various factual certifications required by the Lender and specifies:

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

          (ii) for a Base Facility Advance, the amount, term, MBS Issue Date, Base Facility Fee, Maximum Annual Coupon Rate, Price (which will be in a range between 99-1/2 and 100-1/2), Yield Maintenance Period, if applicable, Yield Rate Security, if applicable, Amortization Period 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 Revolving Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving Facility Fee, Coupon Rate, Discount, Price, and Closing Date for the Advance; and

          (ii) for a Base Facility Advance, the amount, term, MBS Issue Date, MBS Delivery Date, MBS Pass-Through Rate, Base 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 Revolving Advances. On or before the Closing Date for a Revolving Advance, the Borrower shall execute and deliver to the Lender an instrument (“Advance Confirmation Instrument”), in the form attached as Exhibit O to this Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed Interest Rate, Revolving 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 Revolving 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 Revolving Advances in accordance with the Advance Confirmation Instrument, the Revolving Facility

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Note or the other Loan Documents, but is merely meant to facilitate evidencing the date of funding and to confirm that the Advance Confirmation Instrument is not effective until the date of funding.

SECTION 4.03 Breakage and other Costs. In the event that the Lender obtains an MBS Commitment and the Lender fails to fulfill the MBS Commitment because the Advance is not made (for a reason other than the default of the Lender to make the Advance or the failure of the purchaser of the MBS to purchase such MBS), the Borrower shall pay all breakage and other 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.

ARTICLE V
MAKING THE ADVANCES

SECTION 5.01 Initial Advance. The Borrower may make a request (“Initial Advance Request”) for the Lender to make the Initial Advance. If all conditions contained in this Section are satisfied on or before the Closing Date for the Initial Advance, the Lender shall make the Initial Advance on the Initial Closing Date or on another date selected by the Borrower and approved by the Lender. The obligation of the Lender to make the Initial Advance is subject to the following conditions precedent:

          (a) Receipt by the Lender of the Initial Advance Request;

          (b) [Intentionally Deleted];

          (c) The delivery to the Title Company, for filing and/or recording in all applicable jurisdictions, of all applicable Loan Documents required by the Lender, including duly executed and delivered original copies of the Revolving Facility Note, a Base Facility Note, the Initial Security Instruments covering the Initial Mortgaged Properties and UCC-1 Financing Statements covering the portion of the Collateral comprised of personal property, and other appropriate instruments, in form and substance satisfactory to the Lender and in form proper for recordation, as may be necessary in the opinion of the Lender to perfect the Liens created by the applicable Security Instruments and any other Loan Documents 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 the Advance is a Revolving Advance, the receipt by the Lender of the first installment of Revolving Facility Fee for the Revolving Advance and the entire Discount for the Revolving Advance payable by the Borrower pursuant to Section 2.04;

          (e) The receipt by the Lender of the Commitment Termination Fee pursuant to Section 16.02(a), the Initial Due Diligence Fee pursuant to Section 16.03(a) to the extent calculated by Lender at such time (any portion of the Initial Due Diligence Fee not paid by the Borrower on the Initial Closing Date shall be paid promptly upon demand by Lender), all legal

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fees and expenses payable pursuant to Section 16.04(a) and all legal fees and expenses payable in connection with the Initial Advance pursuant to Section 16.04(b); and

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

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 Lender’s receipt of the Future Advance Request and 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.

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 Base Facility Advance, delivery of a Base Facility Note, duly executed by the Borrower, in the amount of the Advance, reflecting all of the terms of the Base Facility Advance;

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

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

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

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

SECTION 5.04 Determination of Allocable Facility Amount and Valuations.

          (a) Initial Determinations. On the Initial Closing Date, Lender shall determine (i) the Allocable Facility Amount and Valuation for each Mortgaged Property and (ii) the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period. The determinations made as of the Initial Closing Date shall remain unchanged until the first anniversary of the Initial Closing Date.

          (b) Future Determinations. (i) Once each Calendar Quarter or, if the Commitment consists only of a Base Facility Commitment, once each Calendar Year, within twenty (20) Business Days after Borrower has delivered to Lender the reports required in Section 13.04, Lender shall determine the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period with the other covenants set forth in the Loan Documents, and whether the Borrower is in compliance, (ii) after the first anniversary of the Initial Closing Date, on an annual basis, and if Lender reasonably decides that changed market or property conditions warrant, Lender shall determine Allocable Facility Amounts and Valuations, and (iii) Lender shall also redetermine Allocable Facility Amounts to take account of any addition, release or substitution of Collateral or other event which invalidates the outstanding determinations.

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 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 Multifamily Residential 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

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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) to the extent calculated by Lender at such time (any portion of any Additional Collateral Due Diligence Fee not paid by Borrower with the Collateral Additional Request shall be paid promptly upon demand by Lender).

          (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 (A) the Aggregate Debt Service Coverage Ratios for the Trailing 12 Month Period and the Aggregate Loan to Value Ratio for the Trailing 12 Month Period applicable to the Collateral Pool, and (B) the Debt Service Coverage Ratio for the Trailing 12 Month Period and the Loan to Value Ratio for the Trailing 12 Month Period applicable to the proposed Additional Property on the basis of the lesser of (i) 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. Within 30 days after receipt of (i) the Collateral Addition Request for the 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 for the Trailing 12 Month Period which it estimates shall result from the addition of the proposed Additional Mortgaged Property to the Collateral Pool. If the Lender declines to consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Lender shall include, in its notice, a brief statement of the reasons for doing so. Within five Business Days after receipt of the Lender’s notice that it shall consent to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower shall notify the Lender whether or not it elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool. If the Borrower fails to respond within the period of five Business Days, it shall be conclusively deemed to have elected not to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool.

          (d) Closing. If, pursuant to subsection (c), the Lender consents to the addition of the proposed Additional Mortgaged Property to the Collateral Pool, the Borrower timely elects to cause the proposed Additional Mortgaged Property to be added to the Collateral Pool and all conditions contained in Section 6.03 are satisfied, the Lender shall permit the proposed Additional Mortgaged Property to be added to the Collateral Pool, at a closing to be 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), provided that in any Calendar Quarter, the Closing Date for any addition of an Additional Mortgaged Property to the

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Collateral Pool shall be on the same day as the Closing Date of any release or substitution pursuant to Article VII of this Agreement and any increase in the Credit Facility pursuant to Article VIII of this Agreement..

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) If the Additional Mortgaged Property is being added to the Collateral Pool prior to the first anniversary of the Initial Closing Date, the Coverage and LTV Tests will be satisfied;

          (b) If the Additional Mortgaged Property is being added to the Collateral Pool after the first anniversary of the Initial Closing Date, the proposed Additional Mortgaged Property has a Debt Service Coverage Ratio for the Trailing 12 Month Period of not less than 135% and a Loan to Value Ratio for the Trailing 12 Month Period 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;

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

          (d) 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;

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

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          (f) 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

          (g) 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 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 Revolving 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, provided that in any Calendar Quarter, the Closing Date for any release shall be on the same day as the Closing Date of any addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement or any increase in the Credit Facility pursuant to Article VIII of this Agreement), 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 and reasonably satisfactory to the Title Company for releases in the jurisdiction governing the perfection of the security interest being released, releasing the applicable Security Instrument as a Lien on the Collateral Release Property, and UCC-3 Termination Statements terminating the UCC-1 Financing Statements perfecting a Lien on the portion of the Collateral Release Property comprised of personal property and such other documents and instruments as the Borrower may reasonably request evidencing the release of the applicable Collateral from any lien securing the Obligations (including a termination of any restriction on the use of any accounts relating to the Collateral Release Property) and the release and return to the Borrower of any and all escrowed amounts relating thereto. The instruments referred to in the preceding sentence are referred to in this Article as the “Collateral Release Documents.”

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          (c) Release Price. The “Release Price” for each Mortgaged Property other than Mortgaged Properties released from a Security Instrument in connection with a Substitution of Collateral pursuant to Section 7.04 of this Agreement means 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. 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 Revolving Advances Outstanding until there are no further Revolving 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 Base Facility Advances, so long as the prepayment is permitted under the Base Facility Note for the Base 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, Revolving 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 Revolving Advances are due and payable, at which time the Lender shall apply the amounts held by it to the amounts of the Revolving Advances due and payable.

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

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

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

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

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

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

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

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

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

          (k) Notwithstanding the other provisions of this Section 7.03, no release of any of the Mortgaged Properties shall be made unless the Borrower has provided title insurance, taking into account tie-in endorsements, to Lender in respect of each of the remaining Mortgage

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Properties in the Collateral Pool in an amount equal to 150% of the Initial Value of each such Mortgaged Property.

SECTION 7.04 Substitutions. Subject to the terms, conditions and limitations of Articles VI and VII and provided that (i) the Valuation of the Multifamily Residential Property sought to be added to the Collateral Pool equals or exceeds the Valuation of the Mortgaged Property sought to be released from the Collateral Pool and (ii) Lender’s receipt of the Substitution Fee and all legal fees and expenses payable by the Borrower in connection with the substitution pursuant to Section 16.04(b), the Borrower may simultaneously add a Multifamily Residential Property to the Collateral Pool and release a Mortgaged Property from the Collateral Pool, thereby effecting a substitution of Collateral, provided that Sections 6.03(c), 7.02(c), 7.02(d) and 7.03(b) shall not apply to a substitution of Collateral. In order to effect a substitution of Collateral in the Collateral Pool, the Borrower may deliver a written request for such substitution (“Collateral Substitution Request”) to the Lender in the forms of the Collateral Addition Request and Collateral Release Request.

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, to increase the Base Facility Commitment, the Revolving Facility Commitment, or both. The Borrower’s right to increase the Commitment is subject to the following limitations:

          (a) Commitment. After giving effect to the proposed increase, the Commitment (without regard to the actual amount of Revolving Advances Outstanding, but taking into account the aggregate original principal amount of all Base Facility Advances made under this Agreement to the Closing Date) shall not exceed $250,000,000.

          (b) Minimum Request. Each Request for an increase in the Commitment shall be in the minimum amount of $10,000,000.

          (c) Terms and Conditions. The terms and conditions of this Agreement shall apply to any increase in the Commitment.

SECTION 8.02 Procedure for Obtaining Increases in Commitment.

          (a) Request. In order to obtain an increase in the Commitment, the Borrower shall deliver a written request for an increase (a “Credit Facility Expansion Request”) to the Lender, in the form attached as Exhibit V to this Agreement. Each Credit Facility Expansion Request shall be accompanied by the following:

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

          (ii) A designation of the increase in the Base Facility Credit Commitment and the Revolving Facility Credit Commitment;

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          (iii) A request that the Lender inform the Borrower of any change in the Geographical Diversification Requirements; and

          (iv) A request that the Lender inform the Borrower of the Base Facility Fee and the Revolving 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), provided that in any Calendar Quarter the Closing Date for addition of an Additional Mortgaged Property to the Collateral Pool pursuant to Article VI of this Agreement and any increase of the Credit Facility shall be on the same day as the Closing Date for any release or substitution pursuant to Article VII of this Agreement.

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) 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
COMPLETE OR 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 Revolving Facility Commitment and the Base 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 Revolving Facility Commitment (other than in connection with a conversion of all or a portion of the Revolving Loan Commitment to a Base Facility Commitment, which reduction shall be automatic) or the Base 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 Revolving Facility Commitment to $0 shall be referred to as a “Complete Revolving Facility Termination.” A permanent reduction of the Base Facility Commitment to $0 shall be referred to as a “Complete Base Facility Termination.” The Facility Termination Request shall be accompanied by the following:

          (i) A designation of the proposed amount of the reduction in the Commitment; and

          (ii) Unless there is a Complete Revolving Facility Termination or a Complete Base Facility Termination, a designation by the Borrower of any Revolving Advances which will be prepaid or Fixed Advances which will be prepaid, 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 Revolving Facility Commitment or Base 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 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 Commitments 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 Revolving Advances Outstanding required to be paid in order that the aggregate unpaid principal balance of all

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Revolving Advances Outstanding is not greater than the Revolving Facility Commitment, including any associated prepayment premiums or other amounts due under the Notes (but if the Borrower is not required to prepay all of the Revolving Advances, the Borrower shall have the right to select which of the Revolving Advances shall be repaid);

          (b) If applicable, 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 Base Facility Notes Outstanding on the Closing Date;

          (c) If applicable, 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 for which the Lender has presented an invoice on or before the Closing Date for the Request.

          (b) No Material Adverse Change. 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 (or, with respect to the conditions precedent to the Initial Advance, from the condition, business or prospects reflected in the financial statements, reports and other information obtained by the Lender during its review of the Borrower and the Initial Mortgaged Properties).

          (c) No Default. 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. The Borrower is not insolvent (within the meaning of any applicable federal or state laws relating to bankruptcy or fraudulent transfers) nor will it be rendered insolvent by the transactions contemplated by the Loan Documents, including the

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making of a Future Advance, or, after giving effect to such transactions, will be left with an unreasonably small capital with which to engage in its business or undertakings, or will have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature or will have intended to hinder, delay or defraud any existing or future creditor.

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

          (f) Representations and Warranties. 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. 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.

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

          (i) A Compliance Certificate;

          (ii) An Organizational Certificate; and

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

          (i) Covenants. The Borrower is in full compliance with each of the covenants set forth in Articles XIII, XIV and XV of this Agreement, without giving effect to any notice and cure rights of the Borrower.

SECTION 11.02 Delivery of Closing Documents Relating to Initial Advance Request, Collateral Addition Request, Credit Facility Expansion Request or Future Advance Request. With respect to the closing of the Initial Advance Request, a Collateral Addition Request, a Credit Facility Expansion Request, or a Future Advance 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

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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 for the Initial Advance Request or a Collateral Addition Request, it shall be a condition precedent that the Lender receive each of the following, each dated as of the Closing Date for the Initial Advance Request or Collateral Addition 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, on the standard form required by the DUS Guide.

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

          (j) An Assignment of Leases and Rents, if the Lender determines one to be necessary or desirable, provided that the provisions of any such assignment shall be substantively identical to those in the Security Instrument covering the Collateral, with such modifications as may be necessitated by applicable state or local law.

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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 Borrower is a duly formed and existing corporation. The Borrower is qualified to transact business and is in good standing in the Commonwealth of Virginia 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 its address set out in Section 23.08.

          (3) The Borrower has observed all customary formalities regarding its corporate existence.

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

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

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

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

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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 are subject;

          (2) does or will conflict with or result in any material breach or violation of, or constitute a default under, any of the terms, conditions or provisions of the Borrower’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 are subject;

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

          (4) does or will require the consent or approval of any creditor of the Borrower, 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 have incurred, have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature. The Borrower 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 permit the non-defaulting party to terminate the contract and 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, which would have a Material Adverse Effect.

          (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. The Borrower is in compliance in all material respects with all applicable provisions of ERISA and has not incurred any liability to the PBGC on a Plan under Title IV of ERISA. None of the assets of the Borrower constitute plan assets (within the meaning of Department of Labor Regulation § 2510.3-101) of any employee benefit plan subject to Title I of ERISA.

          (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

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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) Intentionally Omitted.

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

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

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

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

          (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).

          (s) Lines of Business. Not less than sixty percent (60%) of the Consolidated Total Assets of Borrower consist of Multifamily Residential Properties.

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

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

          (a) Title. The Borrower has good, valid, marketable and indefeasible title to each Mortgaged Property (either in fee simple or as tenant under a ground lease meeting all of the requirements of the DUS Guide), free and clear of all Liens whatsoever except the Permitted Liens. Each Security Instrument, if and when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create a valid, perfected first lien on the Mortgaged Property intended to be encumbered thereby (including the Leases related to such Mortgaged Property and the rents and all rights to collect rents under such Leases), subject only to Permitted Liens. Except for any Permitted Liens, there are no Liens or claims for work, labor or materials affecting any Mortgaged Property which are or may be prior to, subordinate to, or of equal priority with, the Liens created by the Loan Documents. The Permitted Liens do not have, and may not reasonably be expected to have, a Material Adverse Effect.

          (b) Impositions. The Borrower has filed all property and similar tax returns required to have been filed by it with respect to each Mortgaged Property and has paid and discharged, or caused to be paid and discharged, all installments for the payment of all Taxes due to date, and all other material Impositions imposed against, affecting or relating to each Mortgaged Property other than those which have not become due, together with any fine, penalty, interest or cost for nonpayment pursuant to such returns or pursuant to any assessment received by it. Except for any Tax, levy or other assessment or charge resulting from a reassessment of the value of a Mortgaged Property in the ordinary course of business, 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, 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 its 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

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the Lender. Except as set forth in a Rent Roll, no Lease for any unit in any Mortgaged Property (i) is for a term in excess of one year, including any renewal or extension period unless such renewal or extension period is subject to termination by the Borrower upon not more than 30 days’ written notice, (ii) provides for prepayment of more than one month’s rent, or (iii) was entered into in other than the ordinary course of business.

          (e) Rent Roll. The Borrower has executed and delivered to the Lender a Rent Roll for each Mortgaged Property, each dated as of and delivered within 30 days prior to the Closing Date. Each Rent Roll sets forth each and every unit subject to a Lease which is in full force and effect as of the date of such Rent Roll. The information set forth on each Rent Roll is true, correct and complete in all material respects as of its date and there has occurred no material adverse change in the information shown on any Rent Roll from the date of each such Rent Roll to the Closing Date. Except as disclosed in the Rent Roll with respect to each Mortgaged Property or otherwise previously disclosed in writing to the Lender, no Lease is in effect as of the date of the Rent Roll with respect to such Mortgaged Property. Notwithstanding the foregoing, any representation in this subsection (e) made with respect to a time period occurring prior to the date on which the Borrower owned the Mortgaged Property is made to the best of the Borrower’s knowledge.

          (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.

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

          (m) Condition of the Mortgaged Properties. Except as disclosed in any third party report delivered to the Lender prior to the date on which the Borrower’s Mortgaged Property is added to the Collateral Pool, or otherwise disclosed in writing by the Borrower to the 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

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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 limited partnership duly organized, validly existing and in good standing under the laws of the District of Columbia.

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

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

ARTICLE XIII
AFFIRMATIVE COVENANTS OF THE BORROWER

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

SECTION 13.01 Compliance with Agreements; No Amendments. 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 corporation, 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 Borrower Status. During the Term of this Agreement, the Borrower 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

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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 Borrower and its Subsidiaries as of the end of such fiscal year, the audited statement of income, the Borrower’s equity and retained earnings of the Borrower and its Subsidiaries for such fiscal year and the audited statement of cash flows of the Borrower 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 Borrower’s independent certified public accountants to the effect that such financial statements have been prepared in accordance with GAAP, consistently applied, and that such financial statements fairly present the results of its operations and financial condition for the periods and dates indicated, with such certification to be free of exceptions and qualifications as to the scope of the audit or as to the going concern nature of the business.

          (b) Quarterly Financial Statements. As soon as available, and in any event within 45 days after each of the first three fiscal quarters of each fiscal year during the Term of this Agreement, the unaudited balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal quarter, the unaudited statement of income and retained earnings of the Borrower and its Subsidiaries and the unaudited statement of cash flows of the Borrower 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 or the Vice President of Finance of the Borrower 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 forty-five (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 Borrower 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 ninety (90) days of the end of its fiscal year, an annual statement of income and expenses of each Mortgaged Property accompanied by a certificate of the Chief Financial Officer of the Borrower 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. As soon as available, and in any event within forty-five (45) days after each Calendar Quarter, a current Rent Roll for each Mortgaged Property, showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable, the rent paid and any other information requested by the Lender and

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accompanied by a certificate of the Chief Financial Officer of the Borrower 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 Borrower 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 its respective security holders, (b) all regular and periodic reports and all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or a similar form) and prospectuses, if any, filed by the Borrower, or any of its Affiliates, with the Securities and Exchange Commission or other Governmental Authorities, and (c) all press releases and other statements made available generally by the Borrower, or any of its Affiliates, to the public concerning material developments in the business of the Borrower 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 any 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) Borrower Plans and Projections. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, copies of (1) the Borrower’s business plan for the current and the succeeding two fiscal years, (2) the Borrower’s annual budget (including capital expenditure budgets) and projections for each Mortgaged Property; and (3) the Borrower’s financial projections for the current and the succeeding two fiscal years.

          (k) Strategic Plan. To the extent prepared in the ordinary course of business of the Borrower and in the form prepared by the Borrower in the ordinary course of business, within 30 days after its preparation, a written narrative discussing the Borrower’s short and long range plans, including its plans for operations, mergers, acquisitions and management, and accompanied by supporting financial projections and schedules, certified by a member of Senior Management as true, correct and complete (“Strategic Plan”) If the Borrower’s Strategic Plan

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materially changes, then such person shall deliver to the Lender the Strategic Plan as so changed.

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

          (m) 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.

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

SECTION 13.05 Certificate of Compliance. The Borrower shall deliver to the Lender concurrently with the delivery of the financial statements and/or reports required to be delivered pursuant to Section 13.04 (a) and (b) above a certificate signed by the Chief Financial Officer or Vice President of Finance of the Borrower 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 15.09 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, upon reasonable notice to the Borrower and provided Lender observes reasonable security and confidentiality procedures of the Borrower:

          (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 any of the Borrower’s Chief Operating Officer, Chief Financial Officer, Vice President of Finance, Treasurer, Assistant Treasurer, Comptroller and any other person performing the functions of said officers;

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

          (d) to receive any other information that the Lender deems 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, all inspections shall be conducted at reasonable times during normal business hours.

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

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

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

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

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

          (e) Regulatory Supervision or Penalty. The receipt of notice from any Governmental Authority having jurisdiction over the Borrower that (A) the Borrower is being placed under regulatory supervision, (B) any license, Permit, charter, membership or registration material to the conduct of the Borrower’s business or the Mortgaged Properties is to be suspended or revoked or (C) the Borrower is to cease and desist any practice, procedure or 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

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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; and

          (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.

SECTION 13.09 Intentionally Omitted.

SECTION 13.10 Inspection. Subject to the rights of tenants and upon reasonable notice, 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, all such entries, examinations and inspections shall be conducted at reasonable times during normal business hours.

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 (whether or not such defense is provided by Borrower’s insurance) 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 claim is insured and Borrower’s insurance company provides a defense, Borrower may rely on such defense. 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

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under any Applicable Law, whether now existing or hereafter enacted or amended, then the Lender may, but without obligation to do so and without notice to or demand upon the Borrower and without releasing the Borrower from any Obligation, make such appearances, disburse such sums and take such action as the Lender deems necessary or appropriate to protect the Lender’s interest, including disbursement of attorney’s fees, entry upon such Mortgaged Property to make repairs or take other action to protect the security of said Mortgaged Property, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of the Lender appears to be prior or superior to the Loan Documents. In the event (i) that any Security Instrument is foreclosed in whole or in part or that any Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, or (ii) of the foreclosure of any mortgage, deed to secure debt, deed of trust or other security instrument prior to or subsequent to any Security Instrument or any Loan Document in which proceeding the Lender is made a party or (iii) of the bankruptcy of the Borrower or an assignment by the Borrower for the benefit of their respective creditors, the Borrower shall be chargeable with and agrees to pay all 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 the lesser of (i) five percent (5%) of the Allocable Facility Amount of such Mortgaged Property and (ii) $250,000 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 $100,000; 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 shall at all times remain in compliance in all material respects with all applicable provisions of ERISA and similar requirements of the PBGC.

SECTION 13.16 Loan Document Taxes. If any tax, assessment or Imposition (other than a franchise 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

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

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

SECTION 13.18 Monitoring Compliance. Upon the request of the Lender, from time to time, the Borrower shall promptly provide to the Lender such documents, certificates and other information as may 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 Appraisals. At any time and from time to time (but not to exceed once per calendar year), the Lender shall be entitled to obtain an Appraisal of any Mortgaged Property. At the time of the addition of a Mortgaged Property to the Collateral Pool, the Lender shall be entitled to obtain an Appraisal of such Mortgaged Property. The Borrower shall pay all of the Lender’s costs of obtaining the Appraisal.

SECTION 13.21 Transfer of Ownership Interests of the Borrower.

          (a) Prohibition on Transfers and Changes of Control. The Borrower shall not cause or permit a Transfer or a Change of Control.

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

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

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          (ii) A sale or other disposition of obsolete or worn out personal property located in any Mortgaged 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.

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

          (iv) 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 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.

          (v) The transfer of shares of common stock or other beneficial or ownership interest or other forms of securities in the Borrower, and the issuance of all varieties of convertible debt, equity and other similar securities of the Borrower, 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.

          (vi) 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.

          (vii) 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.

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

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

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          (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 transaction to the approval of borrowers 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 out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Borrower’s request.

SECTION 13.22 Change in Senior Management. The Borrower shall give the Lender notice of any change in the identity of the Chief Executive Officer or the Chief Financial Officer of the Borrower.

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 consists of at least seven (7) Mortgaged Properties located in at least four (4) states and at least five (5) SMSA’s, provided, however, that, upon the occurrence of any increase in the Commitment pursuant to Article VIII, the Borrower shall at all times thereafter cause the Collateral Pool to satisfy such other

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Geographical Diversification Requirements as the Lender may determine and notify Borrower of at the time of the increase.

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

SECTION 13.26 Facility Balancing. If the Borrower fails to meet the Coverage and LTV Tests then, within 45 days of Lender’s notice to Borrower of such failure, the Borrower shall (i) add Additional Mortgaged Properties to the Collateral Pool in accordance with Article VI so that after such addition the Coverage and LTV Tests are met, or (ii) prepay Advances Outstanding in an amount sufficient to cause the Borrower to be in compliance with the Coverage and LTV Tests. Any prepayments made pursuant to the preceding sentence shall be applied first against the Revolving Advances Outstanding in the sequence specified by Borrower until there are no further Revolving Advances Outstanding then against the prepayment of Base Facility Advances Outstanding so long as the prepayment is permitted under the applicable Base Facility Note. If no prepayment is permitted under the applicable Base Facility Note, such prepayment amount shall be held by Lender (or its appointed collateral agent) as substitute cash collateral in accordance with a security agreement and other documents in form and substance acceptable to Lender. Any substitute cash collateral remaining will be returned to the Borrower on the earlier of the date when the Coverage and LTV Tests are again met or the Termination Date. If on the date the Borrower pays any amounts required by this Section, Revolving Advances are Outstanding but are not then due and payable, Lender shall hold such amounts (which amounts shall bear interest at a rate determined by Lender) as additional collateral until the next date on the Revolving Advances are due and payable at which time Lender shall apply the appropriate portion of such prepayment to such Revolving Advances.

ARTICLE XIV
NEGATIVE COVENANTS OF THE BORROWER

The Borrower 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) either directly or indirectly sell, transfer, exchange or otherwise dispose of any of its assets if such sale, transfer, exchange or disposal would result in an Event of Default or Potential Event of Default;

          (b) amend its Organizational Documents in any material respect without the prior written consent of the Lender except in connection with a stock split or the issuance of stock of the Borrower, provided such stock split or issuance does not result in an Event of Default or Potential Event of Default;

          (c) dissolve or liquidate in whole or in part, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents;

          (d) merge or consolidate with any Person, unless the surviving entity is in compliance with the terms and conditions of this Agreement and the Other Loan Documents; or

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

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

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

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

SECTION 14.05 Sale. 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.

SECTION 14.06 Intentionally Omitted.

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 Intentionally Omitted.

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

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

SECTION 14.11 Restrictions on 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 Conduct of Business. The conduct of the Borrower’s 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:

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          (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 No Encumbrance of Collateral Release Property. Unless the Borrower sells a Collateral Release Property to a Person who is not an Affiliate of the Borrower substantially simultaneously with the release of the Collateral Release Property from the Collateral Pool, the Borrower shall not encumber the Collateral Release Property for a period of 120 days following the release of the Collateral Release Property from the Collateral Pool.

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:

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at least A-2 (and not lower than A-3) or the equivalent thereof or from Moody’s is at least P-2 (and not lower than P-3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A-2 (and not lower than A-3) or the equivalent thereof by S&P or at least P-2 (and not lower than P-3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to

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no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A- (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Borrower Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state, or other income taxes plus depreciation, amortization and other non cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

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     “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Operating Income from Realty” means for any period for any Realty of the Consolidated Group, an amount equal to the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Net Operating Income from Unencumbered Realty” (i) the aggregate rental and other income from the operation of such Realty during such period; minus all expenses and other proper charges incurred in connection with the operation of such Realty (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

     “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon and further excluding amortization on Insurance Company Debt which shall not exceed $7.5 million annually) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

     “Consolidated Unencumbered Realty” means for the Consolidated Group on a consolidated basis, all Realty which is not encumbered by a Lien securing Debt. For purposes of the covenant, Consolidated Unencumbered Realty as of any date, for the Consolidated Group, shall be valued at the sum (without duplication) of (a) with respect to any consolidated Unencumbered Realty purchased or developed prior to January 1 of the year preceding such date, (i) Consolidated Net Operating Income from Unencumbered Realty for the fiscal quarter most recently ended prior to such date multiplied by four, divided by (ii) 9.25%; plus (b) with respect to any

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Consolidated Unencumbered Realty purchased or developed on or after January 1 of the year preceding such date, the actual costs of such Realty; plus (c) with respect to any Consolidated Unencumbered Realty that also constitutes consolidated Unimproved Realty, the sum of (i) fifty percent (50%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to fifty percent (50%) of the actual expenditures for improvements on such Realty; plus (d) fifty percent (50%) of the Consolidated Group’s pro rata share of the GAAP value of any Realty contributed to or otherwise invested in joint ventures which is not encumbered by a Lien securing Debt.

     “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such Person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person, (x) the Attributed Principal Amount under any Securitization Transaction and (xi) all obligations of such Person owing under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person).

     “Insurance Company Debt” means Debt owed by the Borrower with respect to the 7.98% Notes due March 2000-2003 as more fully described in note 4 of the consolidated financial statements contained in the Borrower’s report on form 10 — K filed with the Securities and Exchange commission for fiscal year 1999.

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such

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preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale or financing by a member of the Consolidated Group or merchandise or services, and monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

     “Tangible Fair Market Value of Assets” means, as of any date for the Consolidated Group, the sum (without duplication) of (a) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed prior to January 1 of the year preceding such date, (i) the sum of (A) Consolidated Net Operating Income for Realty for the fiscal quarter most recently ended prior to such date multiplied by four, minus (B) a reserve of $250 per apartment unit, divided by (ii) 9.25%, plus (b) with respect to any Realty owned by a member of the Consolidated Group and purchased or developed on or after January 1 of the year preceding such date, the actual cost of such Realty, plus (c) with respect to any Consolidated Unimproved Realty, the sum of (i) one hundred percent (100%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to 100% (100%) of the actual expenditures for improvements on such Realty, plus (d) cash and Cash Equivalents, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, plus (e) one hundred (100%) of the Consolidated Group’s pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

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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 1.35.

SECTION 15.03 Compliance with Loan to Value Ratios. The Borrower shall at all times maintain the Aggregate Loan to Value Ratio for the Trailing 12 Month Period so that it is not greater than 65%.

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 20% 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.

          (c) The Borrower shall at all times maintain the Collateral so that the Valuation of all Mortgaged Properties subject to review and underwriting under Section 305.09 of the DUS Guide (Projection Dependent on Military Bases) shall not exceed 20% of the aggregate Valuations of all Mortgaged Properties. Notwithstanding the preceding sentence, Lender may reject, in its sole discretion, any proposed Mortgaged Property subject to review and underwriting under Section 305.09 of the DUS Guide.

SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth of UDRT will not at any time be less than the sum of (i) $1,500,000,000 plus (ii) 90% of the net proceeds (after customary underwriting discounts and commissions and reasonable offering expenses) from Equity Transactions occurring after December 31, 1999.

SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter Consolidated Funded Debt of the Borrower shall not exceed 60% of Tangible Fair Market Value of Assets.

SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Adjusted EBITDA of the Borrower to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

SECTION 15.08 Consolidated Unencumbered Realty to Consolidated Unsecured Debt Ratio. As of the last day of each fiscal quarter, the ratio of Consolidated Unsecured Debt of the Borrower to Consolidated Unencumbered Realty of the Borrower shall not exceed 60%.

SECTION 15.09 Consolidated Unencumbered Interest Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Net Operating Income of the Borrower from Unencumbered Realty of the Borrower to Consolidated Interest Expense relating to Consolidated Unsecured Debt of the Borrower for the fiscal quarter then ended shall not be less than 1.75 :1.0.

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ARTICLE XVI
FEES

SECTION 16.01 Standby 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. The Standby Fee shall be payable monthly, in arrears, on the first Business Day following the end of the month, except that the Standby Fee for the last month during the Term of this Agreement shall be paid on the last day of the Term of this Agreement.

SECTION 16.02 Termination and Origination Fees.

          (a) Commitment Termination Fee. The Borrower shall pay to the Lender a commitment termination fee (the “Commitment Termination Fee”) equal to $1,000,000 (which is equal to the product obtained by multiplying (i) the amount of the Borrower’s existing credit facility under the Original Agreement ($200,000,000) and (ii) 50 basis points (.50%)). The Borrower shall pay the Commitment Termination Fee on the Initial Closing Date.

          (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) 67.5 basis points (.675%). 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 shall pay to the Lender due diligence fees (“Initial Due Diligence Fees”) with respect to the Initial Mortgaged Properties in an amount equal to Lender’s reasonable actual out-of-pocket due diligence costs and expenses plus $5,000. The Borrower has previously paid to the Lender a portion of the Initial Due Diligence Fees and shall pay the remainder of the Initial Due Diligence Fees to the Lender on the Initial Closing Date.

          (b) Additional Due Diligence Fees for Additional Collateral. The Borrower shall pay to the Lender additional due diligence fees (the “Additional Collateral Due Diligence Fees”) with respect to each Additional Mortgaged Property in an amount equal to Lender’s actual out-of-pocket due diligence costs and expenses plus $1,000. The Borrower shall make a $10,000 deposit for each proposed Additional Mortgaged Property to cover a portion of the Additional Collateral Due Diligence Fees for such Additional Mortgaged Property to the Lender on the date on which it submits the Collateral Addition Request for the addition of such Additional 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 reasonable out-of-pocket legal fees and expenses incurred by the Lender and by Fannie Mae

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in connection with the preparation, review and negotiation of this Agreement and any other Loan Documents executed on the date of this Agreement. 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 costs and expenses incurred by the Lender, including the reasonable 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 costs and expenses in connection with a Request. The obligations of the Borrower under this subsection shall be absolute and unconditional, regardless of whether the transaction requested in the Request actually occurs. The Borrower shall pay such costs and expenses to the Lender on the Closing Date for the Request, or, as the case may be, after demand by the Lender when the Lender determines that such Request will not close.

SECTION 16.05 MBS-Related Costs. The Borrower shall pay to the Lender, within 30 days after demand, all 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 or, if applicable, the failure of the purchaser of an MBS to purchase such MBS, 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 Release Price, pursuant to Section 7.02(c), in connection with the release of a Mortgaged Property from the Collateral Pool pursuant to Article VII;

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

          (d) The Facility Termination Fee, pursuant to Section 10.03(b), in connection with the termination of the Credit Facility pursuant to Article X; and

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          (e) The Substitution Fee, pursuant to Section 7.04 in connection with the substitution of a Mortgaged Property from the Collateral Pool pursuant to Article VII.

ARTICLE XVII
EVENTS OF DEFAULT

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

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

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

          (c) the failure by the Borrower to perform or observe any covenant set forth in Sections 13.01 through 13.25 or Sections 14.01 through 14.14 within thirty (30) days after receipt of notice from Lender identifying such failure, provided that such period shall be extended for up to forty-five (45) additional days if the Borrower, in the discretion of the Lender, is diligently pursuing a cure of such default; 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 in an aggregate amount in excess of $5,000,000 of the Borrower or assumed by the 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,

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(F) make a general assignment for the benefit of creditors, (G) assert that the Borrower has no liability or obligations under this Agreement or any other Loan Document to which it is a party; or (H) take any action for the purpose of effecting any of the foregoing; or (ii) a case or other proceeding shall be commenced against the Borrower in any court of competent jurisdiction seeking (A) relief under the Federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding upon or composition or adjustment of debts, or (B) the appointment of a trustee, receiver, custodian, liquidator or the like of the Borrower, or of all or a substantial part of the property, domestic or foreign, of the Borrower and any such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive calendar days, or any order granting the relief requested in any such case or proceeding against the Borrower (including an order for relief under such Federal bankruptcy laws) shall be entered; or

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

          (h) (i) the execution by the Borrower without the prior written consent of the Lender 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, without the prior written consent of the Lender, 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 45 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 the Borrower, any attachment or other levy against any portion of the Borrower’s assets with respect to a claim or claims in an amount in excess of $2,500,000 in the aggregate remains unpaid, unstayed on appeal undischarged, unbonded, not fully insured or undismissed for a period of 60 days; or

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          (l) Intentionally Deleted; or

          (m) 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

          (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 (m) above, or in any other Loan Document, within 30 days after receipt of notice from the Lender identifying such failure.

ARTICLE XVIII
REMEDIES

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

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

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

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

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 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,

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exercise of any option to renew or extend the ground lease on behalf of the Borrower and the curing of any default of the Borrower in the terms and conditions of the ground lease. Any amounts disbursed by the Lender pursuant to this Section, with interest thereon, shall become additional indebtedness of the Borrower secured by the Loan Documents. Unless the Borrower and the Lender agree to other terms of payment, such amounts shall be immediately due and payable and shall bear interest from the date of disbursement at the weighted average, as determined by Lender, of the interest rates in effect from time to time for each Advance unless collection from the Borrower of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from the Borrower under applicable law. Nothing contained in this Section shall require the Lender to incur any expense or take any action hereunder.

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

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

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

SECTION 18.07 Application of Payments. Except as otherwise expressly provided in the Loan Documents, and unless applicable law provides otherwise, (i) all payments received by the Lender from the Borrower under the Loan Documents shall be applied by the Lender against 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 Base Facility Note or the Revolving Facility Note, as the case may be, and the Collateral Pool securing the Notes, (iv) the Lender shall agree to assign

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to Fannie Mae all of the Lender’s interest in the Notes and Collateral Pool securing the Notes, and (v) the Lender shall agree to service the loans evidenced by the Notes.

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

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

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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. Notwithstanding the foregoing, as long as no Event of Default occurs and Borrower timely pays all taxes required for the Mortgaged Property when due, the Borrower may provide a letter of credit for taxes in lieu of deposits required by the preceding sentence. Any letter of credit provided by the Borrower shall be (i) issued by a financial institution reasonably acceptable to the Lender, (ii) be an amount reasonably deferred, from time to time by the Lender and, (iii) in a form reasonably satisfactory to Lender. Deposits required under this section for insurance premiums shall be waived as long as the Borrower timely pays all insurance premiums required for the Mortgaged Properties and no Event of Default occurs.

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

ARTICLE XXI
INTENTIONALLY OMITTED

ARTICLE XXII
PERSONAL LIABILITY OF THE BORROWER

SECTION 22.01 Personal Liability of the Borrower.

          (a) Full Recourse. The Borrower is and shall remain personally liable to the Lender for the payment and performance of all Obligations throughout the term of this Agreement.

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

          (c) Miscellaneous. 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.

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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 (to the extent of actual out-of-pocket fees, costs, charges or expenses) or enforcement of, or preservation of rights or remedies under, this Agreement or any other Loan Documents or in connection with the foreclosure upon, sale of or other disposition of any Collateral granted pursuant to the Loan Documents.

          (d) The Borrower’s Registration Statement, or similar disclosure documents, including fees payable to any rating agencies, including the 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, 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

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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. (Washington, D.C. 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 VIRGINIA (EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION, PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS LOCATED UNLESS SPECIFICALLY SET FORTH OTHERWISE IN THE RELEVANT SECURITY INSTRUMENT, (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 VIRGINIA 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 VIRGINIA. THE LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN VIRGINIA SHALL,

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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 VIRGINIA 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 VIRGINIA. 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 THE BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY THE BORROWER UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY THE BORROWER’S FREE WILL.

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

SECTION 23.08 Notices.

          (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:

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          (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 United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received on the Business Day it is delivered); or

          (4) 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), (2) or (3) 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:

United Dominion Realty Trust, Inc.
1745 Shea Center Drive
Fourth Floor
Highlands Ranch, Colorado 80126
Attention: Ella S. Neyland
Telecopy No.: 720-344-5110

          with a copy to:

Morrison & Forrester
5200 Republic Plaza
370 Seventeenth Street
Denver, Colorado 80202-5638
Attention: Warren Troupe, Esq.
Telecopy No.: 303-592-1510

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          As to the Lender:

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention: Merrill A. Yavinsky
Telecopy No.: 301-215-5579

          with a copy to:

Thomas A. Stegeman, Esq.
4905 Hampden Lane
Bethesda, Maryland 20815
Telecopy No.: 301-913-0273

          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:

Arter & Hadden LLP
1801 K Street, N.W.
Third Floor, L Street Entrance
Washington, D.C. 200006
Attention: Lawrence H. Gesner, Esq.
Telecopy No.: (202) 857-0172

          (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

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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 its 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 required by the Lender.

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

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

SECTION 23.11 Assignments; Third-Party Rights. The Borrower shall not assign this Agreement, or delegate any of its obligations hereunder, without the prior written consent of the Lender. The Lender may assign its rights and obligations under this Agreement separately or together, without the Borrower’s consent, only to Fannie Mae, but may not delegate its obligations under this Agreement unless required to do so pursuant to Section 19.04.

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

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

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

SECTION 23.16 Requests. The Borrower may make up to a total of four (4) Collateral Addition Requests, Collateral Release Requests and Collateral Substitution Requests in each Loan Year. In addition, the Borrower may make up to four (4) additional Collateral Addition Requests, Collateral Release Requests and Collateral Substitution Requests in each Loan Year upon payment of a fee, in addition to any fee due in connection with the subject Request, equal to the greater of (i) $10,000 and (ii) 25 basis points multiplied by the Allocable Facility Amount of the Mortgaged Property that is the subject of the Request.

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

BORROWER
UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

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LENDER
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Michael Palmer
	Name:	Michael Palmer
	Title:	Vice President

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EXHIBIT A TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

EXHIBIT A
SCHEDULE OF INITIAL MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Arbors at Lee Vista	5900 Bent Pine Drive Orlando, Florida 32822	$	22,100,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Cedar Chase	1700 North Dupont Highway Dover, Delaware 19901	$	6,916,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
River Place	4501 Sheraton Drive Macon, Georgia 31210	$	8,300,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Westland Park	6710 Collins Rd. Jacksonville, Florida 32244	$	19,700,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000

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EXHIBIT B TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

BASE FACILITY NOTE

BASE FACILITY NOTE

US $                    

     FOR VALUE RECEIVED, the undersigned (“Borrower”) promises to pay to the order of GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership      (“Lender”)      the      principal      sum      of                               DOLLARS      (US $                    ), with interest on the unpaid principal balance at the annual rate of       percent (      %).

     This Note is executed and delivered by Borrower pursuant to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among Borrower and Lender (as amended from time to time, the “Master Agreement”), to evidence the obligation of Borrower to repay a Base Facility Advance made by Lender to Borrower in accordance with the terms of the Master Agreement. This Note is entitled to the benefit and security of the Loan Documents provided for in the Master Agreement, to which reference is hereby made for a statement of all of the terms and conditions under which the Base Facility Advance evidenced hereby is made.

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

     2. Address for Payment. All payments due under this Note shall be payable at 7500 Old Georgetown Road, Suite 800, Bethesda, Maryland 20814-8133, or such other place as may be designated by written notice to Borrower from or on behalf of Lender.

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

     (a) Unless disbursement of principal is made by Lender to Borrower on the first day of the month, interest for the period beginning on the date of disbursement and ending on and including the last day of the month in which such disbursement is made shall be payable simultaneously with the execution of this Note. Interest under this Note shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

     (b) Consecutive monthly installments of principal and interest, each in the amount of       Dollars (US $      ), shall be payable on the first day of each month beginning on                     , until the entire unpaid principal balance evidenced by this Note is fully paid. Any accrued interest remaining past due for 30 days or more shall be

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added to and become part of the unpaid principal balance and shall bear interest at the rate or rates specified in this Note, and any reference below to “accrued interest” shall refer to accrued interest which has not become part of the unpaid principal balance. Any remaining principal and interest shall be due and payable on                     , unless such date shall be extended pursuant to the Master Agreement, or on any earlier date on which the unpaid principal balance of this Note becomes due and payable, by acceleration or otherwise (the “Maturity Date”). The unpaid principal balance shall continue to bear interest after the Maturity Date at the Default Rate set forth in this Note until and including the date on which it is paid in full.

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

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

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

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

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

     8. Default Rate. So long as any monthly installment or any other payment due under this Note remains past due for 30 days or more, interest under this Note shall accrue on the

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

9. Voluntary and Involuntary Prepayments.

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

     (1) Borrower may voluntarily prepay all (but not less than all) of the unpaid principal balance of this Note on the last Business Day of a calendar month if Borrower has given Lender at least 30 days prior notice of its intention to make such prepayment. Such prepayment shall be made by paying (A) the amount of principal being prepaid, (B) all accrued interest, (C) all other sums due Lender at the time of such prepayment, and (D) the prepayment premium calculated pursuant to Schedule A. For all purposes, including the accrual of interest, any prepayment received by Lender on any day other than the last calendar day of the month shall be deemed to have been received on the last calendar day of such month. For purposes of this Note, a “Business Day” means any day other than a Saturday, Sunday or any other day on which Lender is not open for business.

     (2) Upon Lender’s exercise of any right of acceleration under this Note, Borrower shall pay to Lender, in addition to the entire unpaid principal balance of this Note outstanding at the time of the acceleration, (A) all accrued interest and all other sums due Lender under this Note and the other Loan Documents, and (B) the prepayment premium calculated pursuant to Schedule A.

     (3) Any application by Lender of any collateral or other security to the repayment of any portion of the unpaid principal balance of this Note prior to the Maturity Date and in the absence of acceleration shall be deemed to be a partial

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prepayment by Borrower, requiring the payment to Lender by Borrower of a prepayment premium. The amount of any such partial prepayment shall be computed so as to provide to Lender a prepayment premium computed pursuant to Schedule A without Borrower having to pay out-of-pocket any additional amounts.

     (b) Notwithstanding the provisions of Paragraph 9(a), no prepayment premium shall be payable with respect to (A) any prepayment made no more than 180 days before the Maturity Date, or (B) any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under any Security Instrument.

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

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

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

     (f) Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the loan evidenced by this Note, and acknowledges that the terms of this Note are in other respects more favorable to Borrower as a result of Borrower’s voluntary agreement to the prepayment premium provisions.

     10. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and costs, including reasonable fees and out-of-pocket expenses of attorneys and expert witnesses and costs of investigation, incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding.

     11. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Security Instruments, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s

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obligations under this Note shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

     12. Waivers. Presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness are waived by Borrower and all endorsers and guarantors of this Note and all other third party obligors.

     13. Loan Charges. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. Borrower agrees to an effective rate of interest that is the stated rate of interest plus any additional rate of interest resulting from any other charges or fees that are to be paid by Borrower to Lender that may be found by a court of competent jurisdiction to be interest. The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, shall be deemed to be allocated and spread ratably over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

     14. Commercial Purpose. Borrower represents that the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family or household purposes.

     15. Counting of Days. Except where otherwise specifically provided, any reference in this Note to a period of “days” means calendar days, not Business Days.

     16. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Note by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

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

     18. Notices. All notices, demands and other communications required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 23.08 of the Master Agreement.

     19. Security for this Note. The indebtedness evidenced by this Note is secured by other Security Documents executed by Borrower or its Affiliates. Reference is made hereby to the Master Agreement and the Security Documents for additional rights and remedies of Lender

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relating to the indebtedness evidenced by this Note. Each Security Document shall be released in accordance with the provisions of the Master Agreement and the Security Documents.

     20. Base Facility. This Note is issued as part of the Base Facility established in accordance with the terms of the Master Agreement. Borrower may not re-borrow any amounts under this Note which it has previously borrowed and repaid under this Note.

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

     þ Schedule A            Prepayment Premium (required)

     þ Schedule B            Modifications to Multifamily Note

     IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note shall be deemed to be signed and delivered as a sealed instrument.

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer
Borrower’s Employer ID Number

B-7

     Pay to the order of                                         , without recourse.

GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:
	Name:
	Title:

B-8

USE IF DEFEASANCE IS SELECTED

SCHEDULE A

PREPAYMENT PREMIUM

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

B-9

USE IF YIELD MAINTENANCE IS SELECTED

SCHEDULE A

PREPAYMENT PREMIUM

Any prepayment premium payable under Paragraph 9 of this Note shall be computed as follows:

If the prepayment is made during the period ending on the first day of the last six months of the term of the Note (the “Fixed Loan Yield Maintenance Period”), the prepayment premium shall be the greater of (i) 1% of the unpaid principal balance of this Note; or (ii) the product obtained by multiplying:

(A)	the amount of principal being prepaid,
	by
(B)	the difference obtained by subtracting from the interest rate on this Note the yield rate on the ___% U.S. Treasury Security due                     (the “Yield Rate”), as the Yield Rate is reported in The Wall Street Journal on the thirtieth (30th) day (or, if such day is not a day on which The Wall Street Journal is published, then on the next succeeding day on which The Wall Street Journal is published) preceding (x) the date notice of prepayment is given to Lender where prepayment is voluntary, or (y) the date Lender accelerates the Loan,
	by
(C)	the present value factor calculated using the following formula:

1 - (1 + r)^-n

r

[r	=	Yield Rate
n	=	the number of years, and any fraction thereof, remaining between the Prepayment Date and the expiration of the Yield Maintenance Period]

For purposes of subparagraph (ii)(C), the “Prepayment Date” shall be (x) in the case of a voluntary prepayment, the date on which the prepayment is made, and (y) in any other case, the date on which Lender accelerates the unpaid principal balance of this Note.

INITIAL(S)

INITIAL(S)

B-10

USE IF DEFEASANCE IS SELECTED

SCHEDULE B

MODIFICATIONS TO MULTIFAMILY NOTE

     The Multifamily Note dated                      in the original principal amount of $                     (the “Note”) issued by UNITED DOMINION REALTY TRUST, INC. (“Borrower”) and payable to the order of GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (“Lender”) is hereby amended as follows:

     1. Notwithstanding Paragraph 9 of this Note, Borrower shall not have the right voluntarily to prepay any of the principal of this Note during the period beginning on the date of this Note and ending on the 180th day before the Maturity Date (determined without regard to Lender’s exercise of any right of acceleration of this Note) (the “Lockout Period”). The preceding sentence shall not apply to a prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Security Instrument. If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 3.10 of the Master Agreement, Borrower shall not have the right voluntarily to prepay any of the principal of this Note at any time.

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

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

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

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

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

     “If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 3.10 of the Master Agreement, the Indebtedness

B-11

shall be secured by the Pledge Agreement, and reference shall be made to the Pledge Agreement for other rights of Lender concerning the collateral for the Indebtedness.”

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

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

—————————————
INITIALS
 

B-12

EXHIBIT C TO AMENDED AND RESTATED MASTER CREDIT FACILITY
AGREEMENT

[INTENTIONALLY OMITTED]

EXHIBIT D TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

COMPLIANCE CERTIFICATE

COMPLIANCE CERTIFICATE

     The undersigned (the “Borrower”) hereby certifies to Green Park Financial Limited Partnership, a District of Columbia limited partnership (the “Lender”) and Fannie Mae as follows:

     Section 1. Master Agreement. The Borrower is a party to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the Borrower and the Lender (as amended from time to time, the “Master Agreement”). The rights of the Lender under the Master Agreement have been assigned to Fannie Mae. This Certificate is issued pursuant to the terms of the Master Agreement.

     Section 2. Satisfaction of Conditions. The Borrower hereby represents, warrants and covenants to the Lender that all conditions to the [Credit Facility Expansion] [Collateral Addition] [Future Advance] [Collateral Release] [Collateral Substitution] Request with respect to which this Certificate is issued have been satisfied.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Certificate shall have the meanings ascribed to such terms in the Master Agreement.

     Section 4. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Certificate by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

Dated as of:                                         , _______

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

D-1

EXHIBIT E TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

SAMPLE FACILITY DEBT SERVICE

SAMPLE FACILITY DEBT SERVICE

For this example:
- Total Credit Facility Commitment amount is	$	100,000,000
- Revolving Facility Commitment amount is	$	100,000,000
- Base Facility Commitment amount is		0
- Total Revolving Facility Advances outstanding is	$	80,000,000
- Total Base Facility Advances outstanding is		0
- Unused Capacity is	$	20,000,000
- Revolving Facility Coupon Rate is		TBD	%
- Base Facility Coupon Rate is		N/A	%
- Base Facility Amortization Period is		30 years
- Standby Fee is		12.5 bp/yr.
Then:
Facility Debt Service allocable to Revolving Facility Advances:
$100,000,000 @ TBD%, 30 year amortization =	$	TBD
Facility Debt Service allocable to Base Facility Advances:
$0 @ 0%, 30 year amortization =	$	0
Standby Fee: $20,000,0000 X 12.5 bp =	$	25,000
Facility Debt Service =	$	TBD - sum of above

EXHIBIT F TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

ORGANIZATIONAL CERTIFICATE

ORGANIZATIONAL CERTIFICATE

     I, the undersigned, Ella S. Neyland, hereby certify as follows:

          Section 1. Position. I am the Executive Vice President and Treasurer of UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the “Borrower”), and I am authorized to deliver this Certificate on behalf of the Borrower.

          Section 2. Master Agreement. The Borrower entered into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the Borrower and GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”) (as amended from time to time, the “Master Agreement”). The rights of the Lender under the Master Agreement have been assigned to Fannie Mae. This Certificate is issued pursuant to the terms of the Master Agreement.

          Section 3. Due Authorization of Request. I hereby certify that no action by the shareholders of the Borrower is necessary to duly authorize the execution and delivery of, and the consummation of the transaction contemplated by, the [Credit Facility Expansion] [Collateral Addition] [Future Advance] [Collateral Release] [Collateral Substitution] Request with respect to which this Certificate is delivered (the “Request”), or, if necessary, that attached as Exhibit A to this Certificate is a true copy of resolutions duly adopted at a meeting of the board of directors, partners or members, as the case may be, that authorize the action. Any such resolutions are in full force and effect and are unmodified as of the date of this Certificate.

          Section 4. No Changes. Since the date of the most recent Organizational Certificate delivered to the Lender, or, if there are none, since the date of the Master Agreement, there have been no changes in any of the Organizational Documents of the Borrower, except as set forth in Exhibit B to this Certificate, and the Borrower remains in good standing or are duly qualified in each of the jurisdictions in which they are required to be in good standing or duly qualified under the terms of the Master Agreement.

          Section 5. Incumbency Certificate. One or more of the persons authorized to execute and deliver any documents required to be delivered in connection with the Request are set forth on the attached Schedule.

          Section 6. Capitalized Terms. All capitalized terms used but not defined in this Certificate shall have the meanings ascribed to such terms in the Master Agreement.

          Section 7. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Amended and Restated Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Certificate by this reference to the fullest extent as if the extent of such Section were set forth in its entirety herein.

Dated as of: _______________, _____

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

F-1

EXHIBIT A

Resolutions

F-2

EXHIBIT B

Changes to Organizational Documents (if any)

F-3

SCHEDULE

Incumbency Certificate

F-4

EXHIBIT G TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

INTENTIONALLY OMITTED

EXHIBIT H TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

REVOLVING CREDIT ENDORSEMENT

FUTURE ADVANCE AND REVOLVING CREDIT LINE ENDORSEMENT

Attached to and made a part of                      Policy No.

Said policy is amended by adding the following:

1. The Company acknowledges that the insured mortgage identified in Schedule A of this Policy secures future advances of principal or a revolving credit line and provides for changes in the rate of interest calculated pursuant to a formula contained in the insured mortgage. By this endorsement, the Company insures against loss or damage which the insured sustains as a result of:

a.	The invalidity or unenforceability of the lien of the insured mortgage resulting from the provision in the insured mortgage providing for changes in the rate of interest.
b.	The loss of priority of the lien of the insured mortgage as security for the unpaid principal balance of the loan, together with interest as changed in accordance with the provisions of the insured mortgage, which loss of priority is caused by changes in the rate of interest as provided in the insured mortgage.
c.	The invalidity or unenforceability of the lien of the insured mortgage as security for future advances of principal indebtedness.
d.	The invalidity or unenforceability of the lien of the insured mortgage as a result of fluctuations of the unpaid balance of the principal indebtedness.
e.	The priority of any lien or encumbrance over the lien of the insured mortgage as security for the principal indebtedness and any future advances of principal indebtedness made after the date of the policy.

2. This endorsement is made a part of the Policy and the insurance affected by it is subject to: (i) the Exclusions from Coverage except Paragraph 3(d), (ii) the provisions of the Conditions and Stipulations except Paragraph 8(d) and (iii) the Exceptions contained in Schedule B of the Policy. In addition, it does not insure against loss or damage resulting from:

          i. Future advances of principal indebtedness made after Petition for Relief under the Bankruptcy Code (11 U.S.C.) by or on behalf of the mortgagor.

          ii. The loss of priority of future advances of principal indebtedness as a result of taxes, assessments, or notice of a federal tax lien filed against the mortgagor.

          iii. The loss of priority of future advances of principal indebtedness made after the vestee shown in Schedule A is divested as owner of the estate or interest covered by this Policy.

H-1

          iv. The loss of priority of future advances of principal indebtedness made during any period in which a declared default exists under the terms of the insured mortgage.

          v. The loss of priority of a future advance of principal indebtedness made after the insured has actual knowledge of the existence of liens, encumbrances or other matters affecting the insured premises described in Schedule A intervening between the date of the Policy and that future advance, as to such intervening lien, encumbrance or other matters.

          vi. The fact that the outstanding balance of the indebtedness secured by the mortgage is reduced to a zero balance at any time, unless the recorded mortgage provides that the reduction of the indebtedness to a zero balance shall not cause the mortgage to become extinguished by operation of law.

The total liability of the Company under said policy, binder or commitment and under this and any prior endorsements thereto shall not exceed, in the aggregate, the amount of liability stated on the face of said policy, binder or commitment, as the same may be specifically amended in dollar amount by this or any prior endorsements, and the costs which the Company is obligated to pay under the Conditions and Stipulations of the policy.

This endorsement is made a part of said policy, binder or commitment and is subject to all the terms and provisions thereof, except as modified by the provisions hereof.

Nothing herein contained shall be construed as extending or changing the effective date of the aforesaid policy, binder or commitment unless otherwise expressly stated.

[The rest of this page has been left blank intentionally.]

H-2

     IN WITNESS WHEREOF, the Company has caused this Endorsement to be signed and sealed as of the ___ day of ___, 20___, to be valid when countersigned by an authorized officer or agent of the Company, all in accordance with its By-Laws.

Issued at
COUNTERSIGNED:	, President
	Attest:
	, Secretary
Authorized Officer or Agent

H-3

EXHIBIT I TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

MULTIFAMILY REVOLVING FACILITY NOTE

MULTIFAMILY REVOLVING FACILITY NOTE

US $                    

     FOR VALUE RECEIVED, the undersigned (“Borrower”) promises to pay to the order of GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership, the principal sum of ___ Dollars (US $___), with interest on each Revolving Facility Advance at an annual rate as calculated in Section 3 hereof.

     This Note is executed and delivered by Borrower pursuant to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and between Borrower and Lender (as amended from time to time, the “Master Agreement”), to evidence the obligation of Borrower to repay Revolving Facility Advances made by Lender to Borrower in accordance with the terms of the Master Agreement. This Note is entitled to the benefit and security of the Loan Documents provided for in the Master Agreement, to which reference is hereby made for a statement of all of the terms and conditions under which the Revolving Facility Advances evidenced hereby is made. The Master Agreement requires certain of the terms of each Revolving Facility Advance to be evidenced by an Advance Confirmation Instrument, and reference is hereby made to each such Advance Confirmation Instrument for such terms.

     This Note is issued as part of a Revolving Facility established in accordance with the terms of the Master Agreement. Subject to the terms, conditions and limitations of Article II of the Master Agreement, Borrower may re-borrow any amounts under this Note which they have previously borrowed and repaid under this Note.

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

     2. Address for Payment. All payments due under this Note shall be payable at 7500 Old Georgetown Road, Suite 800, Bethesda, Maryland 20814-8133, or such other place as may be designated by written notice to Borrower from or on behalf of Lender.

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

     (a) This Note shall evidence Revolving Facility Advances made from time to time under the Master Agreement. Each Revolving Facility Advance shall bear interest at a rate determined in accordance with Section 4.01 of the Master Agreement.

I-1

     (b) Borrower shall pay imputed interest on each Revolving Facility Advance in advance in the form of a Discount in accordance with Section 2.04(a) of the Master Agreement (except that Borrower shall pay actual interest on the Revolving Facility Advance for the partial month period, if any, described in Section 2.04(b) of the Master Agreement, in accordance with the terms of such Section). If not sooner paid, the entire principal amount of each Revolving Facility Advance shall be due and payable on the maturity date of the applicable Revolving Facility Advance (the “Maturity Date”) in accordance with Section 2.03 of the Master Agreement. In addition to payment of principal and the Discount, the Borrower shall pay the Revolving Facility Fee due on each Revolving Facility Advance in accordance with Section 2.04(c) of the Master Agreement. No Revolving Facility Advance may have a Maturity Date later than, and any then outstanding Revolving Facility Advance shall be due and payable in full on, the related Revolving Facility Termination Date.

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

     5. Security. The Indebtedness is secured, among other things, by the Security Instruments described in the Master Agreement and reference is made to the Security Instruments for other rights of Lender concerning the collateral for the Indebtedness.

     6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, the prepayment premium payable under Paragraph 9, if any, and all other amounts payable under this Note and any other Loan Document shall at once become due and payable, at the option of Lender, without any prior notice to Borrower. Lender may exercise this option to accelerate regardless of any prior forbearance.

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

     8. Default Rate. So long as any monthly installment or any other payment due under this Note remains past due for 30 days or more, interest under this Note shall accrue on the unpaid principal balance from the earlier of the due date of the first unpaid monthly installment or other payment due, as applicable, at a rate (the “Default Rate”) equal to the lesser of 4

I-2

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

     9. Voluntary and Involuntary Prepayments.

     Pursuant to the terms of the Master Agreement, the Borrower shall pay the entire amount of the Discount on any Revolving Facility Advance in advance. Accordingly, any Revolving Facility Advance may be prepaid in whole or in part and at any time without penalty. Borrower shall give Lender five Business Days’ advance notice of any prepayment.

     10. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and costs, including reasonable fees and out-of-pocket expenses of attorneys and expert witnesses and costs of investigation, incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding.

     11. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Security Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

     12. Waivers. Presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for

I-3

payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness are waived by Borrower and all endorsers and guarantors of this Note and all other third party obligors.

     13. Loan Charges. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. Borrower agrees to an effective rate of interest that is the stated rate of interest plus any additional rate of interest resulting from any other charges or fees that are to be paid by Borrower to Lender that may be found by a court of competent jurisdiction to be interest. The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, shall be deemed to be allocated and spread ratably over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

     14. Commercial Purpose. Borrower represents that the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family or household purposes.

     15. Counting of Days. Except where otherwise specifically provided, any reference in this Note to a period of “days” means calendar days, not Business Days.

     16. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Note by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

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

     18. Notices. All notices, demands and other communications required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 23.08 of the Master Agreement.

     19. Cross-Default with Master Agreement. The occurrence of an Event of Default under the Master Agreement shall constitute an “Event of Default” under this Note, and, accordingly, upon the occurrence of an Event of Default under the Master Agreement, the entire principal amount outstanding hereunder and accrued interest thereon shall at once become due and payable, at the option of the holder hereof.

     20. Advance Confirmation Instruments; Accounting for Revolving Facility Advances. The terms of the Master Agreement and this Note govern the repayment, and all

I-4

other terms relating to each Revolving Facility Advance. However, Borrower shall execute an Advance Confirmation Instrument to create a physical instrument evidencing the Revolving Facility Advance. The Advance Confirmation Instrument for a Revolving Facility Advance executed by Borrower in accordance with Section 4.02 of the Master Agreement shall set forth the amount, term, Discount, Closing Date and certain other terms of the Revolving Facility Advance. The Advance Confirmation Instrument shall conclusively establish each of the terms described in the preceding sentence, absent manifest error. The Revolving Facility Advance evidenced by the Advance Confirmation Instrument does not represent a separate indebtedness from that evidenced by this Note. In making proof of this Note, no other documents other than this Note shall be required. In making proof of the amount and terms of the outstanding Revolving Facility Advances under this Note, this Note, the Advance Confirmation Instruments for the Revolving Facility Advances, and Lender’s records concerning payments made by Borrower under this Note, shall be conclusive evidence of the terms and outstanding amounts of each Revolving Facility Advance, absent manifest error.

     21. Priority of Advances. Each Revolving Facility Advance under this Note shall be evidenced by an Advance Confirmation Instrument, and the lien of each Security Document executed by Borrower from time to time to secure this Note, shall secure each separate Advance (and the lien of each Security Instrument and other Security Document executed by the Borrower to secure its obligations under the Loan Documents) to the same extent and with the same effect as if the Advance had been made (and any guaranty obligation had been incurred) on the date on which (i) with respect to each other Security Instrument, the Security Instrument is recorded in the land records of the jurisdiction in which the real property covered by the Security Instrument is located, or (ii) with respect to each other Security Document, the date on which the Security Document is executed and delivered to Lender.

[Remainder of page left intentionally blank.]

I-5

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

     o Schedule A Prepayment Premium

     o Schedule B Modifications to Multifamily Note

     IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note shall be deemed to be signed and delivered as a sealed instrument.

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

I-6

     Pay to the order of ___, without recourse.

GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:
	Name:
	Title:

I-7

EXHIBIT J TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

TIE-IN ENDORSEMENT

TIE-IN ENDORSEMENT

To be annexed to and form a part of Policy No. ________________.

The said policy is hereby amended in the following manner:

The Company acknowledges that the land described in Schedule A of this policy is part of the security for an indebtedness in the amount of $___ which indebtedness is also secured by mortgages or deeds of trust which are insured concurrently by the following policies:

Policy No. County State Amount

J-1

Anything to the contrary notwithstanding in Paragraph 6(a)(ii) of the Conditions and Stipulations of the Policy, the insurance coverage afforded in this Policy is aggregated with the insurance coverage in all of the other policies identified in this endorsement so the effective insurance coverage is $___. The total liability of the Company under this and all policies identified in this endorsement shall not exceed such amount, but its liability in this Policy for the land described in Schedule A remains limited by the provisions of Paragraph 6(a)(i) and 6(a)(iii) of the Conditions and Stipulations of this Policy. Any payment by the Company on this or any of the Policies listed in this Endorsement shall reduce pro tanto the liability of the Company under all policies, and the amount so paid shall be deemed a payment under all policies.

The total liability of the Company under said Policy and any prior endorsements attached thereto shall not exceed, in the aggregate, the face amount of said Policy, as the same may be specifically amended in dollar amount by this or any prior endorsements, and the costs which the Company is obligated under the provisions of said Policy to pay.

Nothing herein contained shall be construed as extending or changing the effective date of said commitment or policy unless otherwise expressly stated.

This endorsement is made a part of said Policy and is subject to the exclusions, schedules, endorsements, conditions, stipulations and terms thereof, except as modified by the provisions hereof.

Executed this ____ day of _________________, 20____.

COUNTERSIGNED:	,
President
	Attest:                    , Secretary
Authorized Signatory

J-2

EXHIBIT K TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

CONVERSION REQUEST

CONVERSION REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THERE TO OCCUR A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF THE CONVERSION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE), AS LONG AS NONE OF THE LIMITATIONS CONTAINED IN SECTION 3.08 OF THE MASTER AGREEMENT IS VIOLATED, AND ALL CONDITIONS CONTAINED IN SECTION 3.09 OF THE MASTER AGREEMENT ARE SATISFIED.

                    ,                     
VIA:                                         

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Suite 800
Bethesda, Maryland 20814
Attention:                     
[Note: Subject to change in the event Lender or its address changes]

Re: CONVERSION REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”).

Ladies and Gentlemen:

This constitutes a Conversion Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests that there occur a conversion of all or a portion of the Revolving Facility to the Base Facility Commitment in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

     (a) Designation of Amount of Conversion. The amount of the conversion shall be $                    .

     (b) Prepayment of Revolving Facility Advances. (If necessary) The Revolving Facility Advances Outstanding which will be prepaid on the Closing Date for the conversion are as follows:

Closing Date of Revolving Facility Advance:                                         

Maturity Date of Revolving Facility Advance:                                         

K-1

Amount of Advance:                                         

(Note: Any Base Facility Advances made in conjunction with a conversion of all or a portion of the Revolving Facility to the Base Facility Commitment must be accompanied by a Future Advance Request and shall be reviewed in accordance with the terms of the Master Agreement.)

     (c) Accompanying Documents. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 3.09 of the Master Agreement, including (i) the Conversion Documents, as well as (ii) a Compliance Certificate and (iii) an Organizational Certificate will be delivered on or before the Closing Date.

USE (d) ONLY IF THIS REQUEST RELATES TO THE FIRST BASE FACILITY COMMITMENT UNDER THE MASTER CREDIT FACILITY.

     (d) Selection of Prepayment Provisions. Indicated below is the Borrower’s selection of prepayment provisions:

                               Defeasance

                               Yield Maintenance

The Borrower understands and agrees that the above selection shall apply to all Base Facility Advances under the Master Agreement.

NOTE: MORTGAGES MAY NEED MODIFICATION IF DEFEASANCE IS SELECTED.

     Section 2. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

K-2

EXHIBIT L TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT CONVERSION AMENDMENT

AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS ___ AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the ___ day of ___, ___, by and among (i) United Dominion Realty Trust, Inc., a Virginia corporation (“Borrower”) and (ii) Green Park Financial Limited Partnership, a District of Columbia limited partnership (“Lender”); and (iii) Fannie Mae, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. (“Fannie Mae”).

RECITALS

     A. The Borrower and the Lender are parties to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Amended and Restated Master Credit Facility Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this ___ Amendment pursuant to the Master Agreement to reflect a conversion of all or a portion of the Revolving Facility to the Base Facility Commitment.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this ___ Amendment and the Master Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Conversion. The Revolving Facility shall be reduced by, and the Base Facility Commitment shall be increased by, $___, and the definitions of “Revolving Facility Commitment” and “Base Facility Commitment” are hereby replaced in their entirety by the following new definitions:

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

     “Revolving Facility Commitment” means an aggregate amount of $___, evidenced by the Revolving Facility Note in the form attached hereto as Exhibit I, plus such amount as the Borrower may elect to add to the Revolving

L-1

Facility Commitment in accordance with Article VIII, and less such amount as the Borrower may elect to convert from the Revolving Facility Commitment to the Base Facility Commitment in accordance with Article III and less such amount by which the Borrower may elect to reduce the Revolving Facility Commitment in accordance with Article IX.

     Section 2. Capitalized Terms. All capitalized terms used in this ___ Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 3. Full Force and Effect. Except as expressly modified by this ___ Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 4. Counterparts. This ___ Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

     Section 5. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this ___ Amendment by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

[The rest of this page has been intentionally left blank.]

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

UNITED DOMINION REALTY TRUST, INC., a
Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

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GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:
	Name:
	Title:

L-4

FANNIE MAE, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, § 12 U.S.C. 1716, et seq.

By:

Name:

Title:

L-5

EXHIBIT M TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

RATE SETTING FORM

RATE SETTING FORM

     Pursuant to Section 4.01(b) of that certain Amended and Restated Master Credit Facility Agreement dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”) by and among Green Park Financial Limited Partnership, a District of Columbia limited partnership (the “Lender”) and the undersigned (the “Borrower”), the Borrower hereby requests that the Lender issue to it an advance with the following terms:

Designation of Advance	Base Facility Advance
(Check One)	Revolving Facility Advance

FOR REVOLVING FACILITY ADVANCE ONLY:
Proposed MBS Imputed Interest Rate	%
Advance Amount	$
Term	months
MBS Issue Date
Revolving Facility Fee
Maximum Annual Coupon Rate	%
Discount	%
Price
Closing Date no later than
Discount Amount

M-1

FOR BASE FACILITY ADVANCE ONLY:
Proposed Pass-Through Rate	%
Advance Amount	$
Term	months
MBS Issue Date	,
Base Facility Fee
Maximum Annual Coupon Rate	%
Amortization Period
Closing Date no later than	,

     The Lender will provide the Borrower with written confirmation when and if it has obtained a commitment for the purchase of a Fannie Mae MBS having the characteristics described above at a price between 99-¹/2 and 100-¹/2 or better. In the event that the lowest available Coupon Rate is greater than that specified above, the Lender will not proceed without the prior written authorization of the Borrower.

     The Borrower certifies that all conditions contained in Article V of the Master Agreement that are required to be satisfied will be satisfied on or before the Closing Date.

     Defined terms used herein shall have the same meaning as set forth in the Master Agreement.

[Signatures on the following page]

M-2

Dated:                     

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:

Title: Ella S. Neyland

Name: Executive Vice President and Treasurer

M-3

EXHIBIT N TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

RATE CONFIRMATION FORM

RATE CONFIRMATION FORM

     Pursuant to Section 4.01(c) of that certain Amended and Restated Master Credit Facility Agreement dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”) by and among Green Park Financial Limited Partnership, a District of Columbia limited partnership (the “Lender”) and United Dominion Realty Trust, Inc., a Virginia corporation (the “Borrower”), and the Rate Setting Form dated ___, from the Borrower to the Lender, the Lender hereby confirms that it has obtained a commitment for the purchase of a Fannie Mae MBS with the following terms:

Designation of Advance	Base Facility Advance
(Check One)	Revolving Facility Advance

FOR REVOLVING FACILITY ADVANCE ONLY:
Advance Amount	$
Term	months
MBS Issue Date	,
MBS Imputed Interest Rate	%
Revolving Facility Fee
Maximum Annual Coupon Rate	%
Discount	%
Price
Closing Date no later than	,

N-1

FOR BASE FACILITY ADVANCE ONLY:
Advance Amount	$
Term	months
MBS Issue Date	,
MBS Pass-Through Rate	%
Base Facility Fee
Maximum Annual Coupon Rate	%
Price
Yield Maintenance Period
Yield Rate Security
Amortization Period
Closing Date no later than	,

Dated:                     

GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership

By: Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner

By:

Name:

Title:

N-2

EXHIBIT O TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

ADVANCE CONFIRMATION INSTRUMENT

ADVANCE CONFIRMATION INSTRUMENT

     THIS ADVANCE CONFIRMATION INSTRUMENT (the “Advance Confirmation Instrument”) is made as of the ___ day of                     , 20___, by United Dominion Realty Trust, a Virginia corporation (the “Borrower”) for the benefit of Green Park Financial Limited Partnership, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and the Lender are parties to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Amended and Restated Master Credit Facility Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. In accordance with this Advance Confirmation Instrument and the Master Agreement, the Lender is making a Revolving Facility Advance to the Borrower.

     D. The Borrower is executing this Advance Confirmation Instrument pursuant to the Master Agreement to confirm certain terms of the Master Agreement and that certain Multifamily Revolving Facility Note dated the same date as the Master Agreement in the original principal amount of $                     (as amended from time to time, the “Revolving Facility Note”) relating to the Revolving Facility Advance, and the Borrower’s obligation to repay the Advance in accordance with the terms of the Revolving Facility Note and this Advance Confirmation Instrument.

     NOW, THEREFORE, the Borrower, in consideration of the Lender’s making of the Revolving Facility Advance, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Confirmation of Advance and Terms of Advance. The Borrower hereby confirms the following terms of the Revolving Facility Advance, and confirms and agrees that it shall repay the Advance to the Lender in accordance with the terms of the Revolving Facility Note and the Master Agreement:

Advance Amount	$
Term		days
MBS Issue Date

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MBS Imputed Interest Rate		%
Revolving Facility Fee	$
Coupon Rate		%
Discount		%
Price	$
Closing Date

     Section 2. Beneficiaries. This Advance Confirmation Instrument is made for the express benefit of the Lender.

     Section 3. Purpose. The terms of the Master Agreement and the Revolving Facility Note govern the repayment, and all other terms relating to the Revolving Facility Advance. However, this Advance Confirmation Instrument has been executed to create a physical instrument evidencing the above-described Advance under the Revolving Facility Note. The Revolving Facility Advance evidenced by this Advance Confirmation Instrument does not represent a separate indebtedness from that evidenced by the Revolving Facility Note.

     Section 4. Effectiveness of Advance Confirmation Instrument. This Advance Confirmation Instrument will not be effective until the Lender funds the Revolving Facility Advance, at which time the Lender shall note the date of such funding by completing the date block at the foot of this Advance Confirmation Instrument, and executing this Advance Confirmation Instrument below such date block, and such completion shall be binding on the Borrower, absent manifest error.

     Section 5. Capitalized Terms. All capitalized terms used in this Advance Confirmation Instrument which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 6. Counterparts. This Advance Confirmation Instrument may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

     Section 7. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Advance Confirmation Instrument by this reference to the fullest extent as if the test of such Section were set forth in its entirety herein.

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     IN WITNESS WHEREOF, the Borrower has executed this Advance Confirmation Instrument as of the day and year first above written.

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation
By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

Date of Funding:                                         ,                     

GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:
	Name:
	Title:

O-3

EXHIBIT P TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

FUTURE ADVANCE REQUEST

FUTURE ADVANCE REQUEST

THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO MAKE THE REQUESTED FUTURE ADVANCE, IF ALL CONDITIONS CONTAINED IN SECTION 5.03 OF THE MASTER AGREEMENT ARE SATISFIED, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING ON A DATE SELECTED BY US, WHICH DATE SHALL BE NOT MORE THAN THREE (3) BUSINESS DAYS AFTER YOUR RECEIPT OF THE FUTURE ADVANCE REQUEST AND OUR RECEIPT OF THE RATE CONFIRMATION FORM (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE). THE LENDER RESERVES THE RIGHT TO REQUIRE THAT WE POST A DEPOSIT AT THE TIME THE MBS COMMITMENT IS OBTAINED AS AN ADDITIONAL CONDITION TO YOUR OBLIGATION TO MAKE THE FUTURE ADVANCE.

                                        ,                     

VIA:

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:                                        
[Note: Subject to change in the event Lender or its address changes]

Re: FUTURE ADVANCE REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Future Advance Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests that the Lender make an Advance in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

(a)	Amount. The amount of the Future Advance shall be $                    .
(b)	Designation of Facility. The Future Advance is a: [Check one]                     Base Facility Advance                     Revolving Facility Advance
(c)	Maturity Date. The Maturity Date of the Future Advance is as follows:                                         ,                     .

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(d)	Amortization Period. [For Base Facility Advance only] The principal of this Base Facility Advance shall be amortized over a period of (between 20 years and 30 years):                     .
(e)	Accompanying Documents. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 5.03 of the Master Agreement, including (i) a Rate Setting Form, (ii) an Advance Confirmation Instrument (for Revolving Facility Advances only), (iii) a Base Facility Note (for Base Facility Advances only) as well as (iv) a Compliance Certificate, and (v) an Organizational Certificate, will be delivered on or before the Closing Date.
(e)	Wiring Information. Please wire the Future Advance on or before the Closing Date into our account in accordance with the following wiring information:

     Section 2. Available Commitment. The information contained in the following table is true, correct and complete, to the undersigned’s knowledge. The undersigned acknowledges and agrees that the final determination of the information shall be made by the Lender, in accordance with the terms of the Master Agreement.

Currently Available Base Facility Credit Commitment

Currently Available Revolving Facility Credit Commitment

Proposed Amount Drawn on Base Facility Credit Commitment

Remaining Base Facility Credit Commitment after Proposed Draw

Proposed Amount Drawn on Revolving Facility Credit Commitment

Remaining Revolving Facility Credit Commitment after the Proposed Draw

     For these purposes, the terms

(a) “Available Base Facility Credit Commitment” means, at any time, the maximum amount of Base Facility Advances which could be issued and outstanding without causing: (i) the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period to be less than 1.35:1.0; (ii) the Aggregate Loan to Value Ratio for the

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Trailing 12 Month Period to be greater than 65%; or (iii) a breach of any of the Financial Covenants set forth in Article XV of the Master Agreement; and

(b)

“Available Revolving Facility Credit Commitment” means, at any time, the maximum amount of Revolving Facility Advances which could be issued and outstanding without causing: (i) the Aggregate Debt Service Coverage Ratio for the Trailing 12 Month Period to be less than 1.35:1.0; (ii) the Aggregate Loan to Value Ratio for the Trailing 12 Month Period to be greater than 65% or (iii) a breach of any of the Financial Covenants set forth in Article XV of the Master Agreement.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

P-3

EXHIBIT Q TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

COLLATERAL ADDITION REQUEST

COLLATERAL ADDITION REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THAT (1) IF YOU CONSENT TO THE ADDITION OF THE PROPOSED ADDITIONAL MORTGAGED PROPERTY TO THE COLLATERAL POOL, (2) WE ELECT TO CAUSE THE PROPOSED ADDITIONAL MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL POOL AND (3) ALL CONDITIONS CONTAINED IN SECTION 6.03 OF THE MASTER AGREEMENT ARE SATISFIED, THEN YOU SHALL PERMIT THE PROPOSED ADDITIONAL MORTGAGED PROPERTY TO BE ADDED TO THE COLLATERAL POOL, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING WITHIN THIRTY (30) BUSINESS DAYS AFTER YOUR RECEIPT OF OUR ELECTION (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE).

                                        ,                     

VIA:

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:                    
[Note: Subject to change in the event Lender or its address changes]

Re: COLLATERAL ADDITION REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and others (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Collateral Addition Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests that the Multifamily Residential Property described in this Request be added to the Collateral Pool in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

     (a) Collateral Addition Description Package. Attached to this Request is the Collateral Addition Description Package and attached thereto are all information and documents relating to the Additional Collateral required by the Collateral Addition Description Package;

     (b) Due Diligence Fees. Enclosed with this Request is a check in payment of all Additional Collateral Due Diligence Fees required to be submitted with this Request pursuant to Section 16.03(b) of the Master Agreement; and

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     (c) Accompanying Documents. All reports, certificates and documents required to be delivered pursuant to the conditions contained in Section 6.03 of the Master Agreement will be delivered on or before the Closing Date.

     Section 2. Collateral Addition Fee. If the Lender consents to the addition of the Additional Collateral to the Collateral Pool, and the Borrower elects to add the Additional Collateral to the Collateral Pool, the Borrower shall pay the Collateral Addition Fee and all legal fees and expenses payable by the Borrower pursuant to Section 23.17 of the Master Agreement for the Additional Collateral to the Lender as one of the conditions to the closing of the addition of the Additional Collateral to the Collateral Pool.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

Q-2

EXHIBIT R TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

COLLATERAL ADDITION DESCRIPTION PACKAGE

COLLATERAL ADDITION DESCRIPTION PACKAGE

Property Name:

Address:

City/County/State:

General Description, including number of units and amenities:

Year Built:

Year Acquired:

Fee Owner:

Valuation:

Existing Third Party Reports:

Property Contact:

Other Pertinent Information:

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EXHIBIT S TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

COLLATERAL ADDITION REQUEST — SUPPORTING DOCUMENTS

[NOTE: SUBJECT TO LENDER REVIEW
AND POSSIBLE WAIVER]

ADDITIONS TO COLLATERAL

DUS APPLICATION CHECKLIST

PROPERTY DATA

REC’D	OUT
		*A.	Current month’s rent roll, dated and certified by Borrower; must include apartment number, unit
			type, tenant name, monthly rent, market rent, move-in date, lease expiration date, and whether furnished or unfurnished.
		*B.	Certification of Current Project Rent Roll (Schedule H).
		*C.	Borrower’s Concession Statement (Schedule H-1 and H-2).
		*D.	Commercial leases (if applicable).
		*E.	Current certified year-to-date operating statement and prior three years’ statements. YTD statement
			must end with the same month as the certified rent roll.
		F.	Monthly operating statements for the last six months.
		G.	Vacancy/turnover information for prior 24 months; month-by-month breakdown of collections
			including vacancy, bad debt and concessions (may be provided in operating statements).
		H.	Delinquency information for 30, 60, 90+ days. Lender will take this information in
			whatever form the Borrower has.
		I.	Operating Budget (Schedule I, provides instructions).
		J.	Copies of existing major service contracts (landscaping, trash, pool, laundry, pest and elevator).
		K.	Copy of most recent and prior year tax bills and most recent assessment.
		L.	Copy of complete insurance policies including all endorsements, declarations, and premiums.
			Required only if not on blanket policy; Certificate of Insurance required for all additions.
		M.	Major improvements during the last two years and projected for the next twelve months.

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REC’D	OUT
		N.	Existing title report including all easements, restrictions, judgments and liens. (Lender
			requirements enclosed). Will need to be updated prior to Closing.
		*O.	Two copies of the existing as-built survey or site plan (Lender requirements enclosed).
			Will need to be updated prior to Closing.
		*P.	Legal Description.
		Q.	Occupancy Certificates. If not available, please provide a letter from the City stating that
			they are not available, and why.
		*R.	Ground Lease; please advise if not applicable.
		*S.	Reciprocal Use Agreement; please advise if not applicable.
		T.	Operating Licenses.
		U.	Termite inspection.
		V.	Copy of one bill from each utility for the property.
		*W.	Existing reports, if available (e.g., appraisal, market study, engineering, environmental).
		X.	Plans, specifications and soil reports (recently completed properties only).
		Y.	Copies of any deed or rent restrictions in place; please advise if not applicable.

* STARRED ITEMS ARE REQUIRED AS SOON AS POSSIBLE SO THAT THIRD PARTY REPORTS CAN BE ORDERED.

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III. Management Company

REC'D	OUT
		A.	Copy of current or proposed Management Agreement, if applicable.
		B.	Sample tenant lease.
		C.	Management Resume, if other than REIT-related management company.
		D.	Accounts payable schedule for 30, 60 and 90+ days; list should include vendor name,
			invoice date, invoice number, description of item and amount.
		E.	Market survey done by resident manager; to be provided to Lender underwriter at
			site inspection.
		F.	Leasing brochure and floor plans.
		G.	Property Payroll and Benefits (Schedule L).
		Any other information deemed necessary by Lender to complete the underwriting of the addition to collateral.

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EXHIBIT T TO AMENDED AND RESTATED MASTER CREDIT FACILITY
AGREEMENT

COLLATERAL RELEASE REQUEST

COLLATERAL RELEASE REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES FOR THERE TO OCCUR A CLOSING WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS REQUEST, SUBJECT TO SATISFACTION OF ALL CONDITIONS CONTAINED IN SECTION 7.03 OF THE MASTER AGREEMENT. REFERENCE IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

                                        ,                     

VIA:

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:                    
[Note: Subject to change in the event Lender or its address changes]

Re: COLLATERAL RELEASE REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Collateral Release Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests that the Collateral Release Property described in this Request be released from the Collateral Pool in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

T-1

     (a) Description of Collateral Release Property. The name, address and location (county and state) of the Mortgaged Property, or other designation of the Collateral, to be released from the Collateral Pool is as follows:

Name:

Address:

Location:

     (b) Accompanying Documents. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 7.03 of the Master Agreement will be delivered on or before the Closing Date.

     Section 2. Release Price. The Borrower shall pay the Release Price as one of the conditions to the closing of the release of the Collateral Release Property from the Collateral Pool.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:
Name:	Ella S. Neyland
Title:	Executive Vice President and Treasurer

T-2

EXHIBIT U TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

BORROWER’S CONFIRMATION OF OBLIGATIONS

BORROWER’S CONFIRMATION OF OBLIGATIONS

     THIS BORROWER’S CONFIRMATION OF OBLIGATIONS (the “Confirmation of Obligations”) is made as of the                      day of                                         , 20                     , by and among United Dominion Realty Trust, Inc., a Virginia corporation (“Borrower”); Green Park Financial Limited Partnership, a District of Columbia limited partnership (“Lender”); and Fannie Mae, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. (“Fannie Mae”).

RECITALS

     A. The Borrower and the Lender are parties to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Amended and Restated Master Credit Facility Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The Borrower has delivered to the Lender a Collateral Release Request pursuant to the Master Agreement to release a Collateral Release Property from the Collateral Pool.

     D. The Lender has consented to the Collateral Release Request.

     E. The parties are executing this Confirmation of Obligations pursuant to the Master Agreement to confirm that each remains liable for all of its obligations under the Master Agreement and the other Loan Documents notwithstanding the release of the Collateral Release Property from the Collateral Pool.

     NOW, THEREFORE, the Borrower, in consideration of the Lender’s consent to the release of the Collateral Release Property from the Collateral Pool and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Confirmation of Obligations. The Borrower confirms that none of its obligations under the Master Agreement and the Loan Documents is affected by the release of the Collateral Release Property from the Collateral, and each of its obligations under the Master Agreement and the Loan Documents shall remain in full force and effect, and it shall be fully liable for the observance of all such obligations, notwithstanding the release of the Collateral Release Property from the Collateral Pool. The Borrower confirms that, except with respect to the Collateral Release Property, none of its obligations under the Master Agreement and the Loan Documents is affected by the release of the Collateral Release Property, and its obligations under the Master Agreement and the Loan Documents shall remain in full force and effect, and it

U-1

shall be fully liable for the observance of all such obligations, notwithstanding the release of the Collateral Release Property from the Collateral Pool.

     Section 2. Beneficiaries. This Confirmation of Obligations is made for the express benefit of both the Lender and Fannie Mae.

     Section 3. Capitalized Terms. All capitalized terms used in this Confirmation of Obligations which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 4. Counterparts. This Confirmation of Obligations may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

     Section 5. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Confirmation of Obligations by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

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

[Signatures on the following pages]

U-2

UNITED DOMINION REALTY TRUST, INC., a Virginia corporation

By:

Name: Ella S. Neyland

Title:   Executive Vice President and Treasurer

U-3

GREEN PARK FINANCIAL LIMITED
PARTNERSHIP, a District of Columbia limited
partnership

By:      Walker & Dunlop GP, LLC, a Delaware limited
liability company, its managing general partner

By:

Name:

Title:

U-4

FANNIE MAE, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, § 12 U.S.C. 1716, et seq.

By:

Name:

Title:

U-5

EXHIBIT V TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

CREDIT FACILITY EXPANSION REQUEST

CREDIT FACILITY EXPANSION REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO PERMIT THE REQUESTED INCREASE IN THE COMMITMENT, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, AND OCCURRING WITHIN FIFTEEN (15) BUSINESS DAYS AFTER YOUR RECEIPT OF THE CREDIT FACILITY EXPANSION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE), AS LONG AS ALL CONDITIONS CONTAINED IN SECTION 8.03 OF THE MASTER AGREEMENT ARE SATISFIED. REFERENCE IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

                                        ,                     

VIA:                                                                                  

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:                                        

[Note: Subject to change in the event Lender or its address changes]

Re: CREDIT FACILITY EXPANSION REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Credit Facility Expansion Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests an increase in the maximum credit commitment in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

     (a) Amount of Increase. The amount of the increase in the maximum credit commitment and the amount of the increases in the Base Facility Commitment or the Revolving Facility Commitment are as follows:

NAME	INCREASE	RESULTING AMOUNT OF
		COMMITMENT
MAXIMUM CREDIT COMMITMENT:

V-1

BASE FACILITY
COMMITMENT:

REVOLVING FACILITY
COMMITMENT:

[Note: Section 8.01 of the Master Agreement limits the maximum credit commitment to $250,000,000 and the increase in the Maximum Credit Commitment must be in the minimum amount of $5,000,000.]

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

     (c) Accompanying Documents. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 8.04 of the Master Agreement will be delivered on or before the Closing Date.

USE (d) ONLY IF THIS REQUEST RELATES TO THE FIRST BASE FACILITY COMMITMENT UNDER THE MASTER CREDIT FACILITY.

     (d) Selection of Prepayment Provisions. Indicated below is the Borrower’s selection of prepayment provisions:

                                             Defeasance

                                             Yield Maintenance

The Borrower understands and agrees that the above selection shall apply to all Base Facility Advances under the Master Agreement.

NOTE: MORTGAGES MAY NEED MODIFICATION IF DEFEASANCE IS SELECTED.

     Section 2. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

V-2

EXHIBIT W TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

REVOLVING FACILITY TERMINATION REQUEST

REVOLVING FACILITY TERMINATION REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES YOU TO PERMIT THE REVOLVING FACILITY COMMITMENT TO BE REDUCED TO THE AMOUNT DESIGNATED BY US, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, WITHIN FIFTEEN (15) BUSINESS DAYS AFTER YOUR RECEIPT OF THE REVOLVING FACILITY TERMINATION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE), IF ALL CONDITIONS CONTAINED IN SECTION 9.03 ARE SATISFIED. REFERENCE IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

                                        ,                     

VIA:                                                             

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:

[Note: Subject to change in the event Lender or its address changes]

Re: REVOLVING FACILITY TERMINATION REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Revolving Facility Termination Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests a permanent reduction in the amount of the Revolving Facility in accordance with the terms of the Master Agreement. Following is the information required by the Master Agreement with respect to this Request:

W-1

     (a) Amount of Reduction. The amount of the permanent reduction in the Revolving Facility is as follows:

Amount of Reduction:      $                                        

Resulting Amount of
Revolving Facility:                      $                                                             

     (b) Required Prepayments. Following are any Revolving Facility Advances that shall be prepaid in connection with the permanent reduction in the Revolving Facility:

    Closing Date of Advance:

    Maturity Date of Advance:

    Amount of Advance:

     (c) Accompanying Documents. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 9.03 of the Master Agreement will be delivered on or before the Closing Date.

     Section 2. Prepayments and Termination Fee. The Borrower shall pay the required amount of the prepayment for any Revolving Facility Advances required to be prepaid, and the required amount of the Termination Fee, pursuant to the terms of Section 9.03 of the Master Agreement, as two of the conditions to the permanent reduction in the Revolving Facility.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Sincerely,

UNITED DOMINION REALTY TRUST, INC. ,
a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

W-2

EXHIBIT X TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

REVOLVING FACILITY TERMINATION DOCUMENT

AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS ___ AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the ___ day of                                         ,         , by and among (i) United Dominion Realty Trust, Inc., a Virginia corporation (“Borrower”) and (ii) Green Park Financial Limited Partnership, a District of Columbia limited partnership (“Lender”) and (iii) Fannie Mae, a federally-chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. § 1716 et seq. (“Fannie Mae”).

RECITALS

     A. The Borrower and the Lender are parties to that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Amended and Restated Master Credit Facility Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this ___ Amendment pursuant to the Master Agreement to reflect a permanent reduction of all or a portion of the Revolving Facility.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and agreements contained in this ___ Amendment and the Master Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby agree as follows:

     Section 1. Reduction of Revolving Credit Commitment. The Revolving Facility Commitment shall be reduced by $                                        , and the definition of “Revolving Facility Commitment” is hereby replaced in its entirety by the following new definition:

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

X-1

     Section 2. Capitalized Terms. All capitalized terms used in this ___ Amendment which are not specifically defined herein shall have the respective meanings set forth in the Master Agreement.

     Section 3. Full Force and Effect. Except as expressly modified by this ___ Amendment, all terms and conditions of the Master Agreement shall continue in full force and effect.

     Section 4. Counterparts. This ___ Amendment may be executed in counterparts by the parties hereto, and each such counterpart shall be considered an original and all such counterparts shall constitute one and the same instrument.

     Section 5. Governing Law; Consent to Jurisdiction and Venue; WAIVER OF TRIAL BY JURY. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this ___ Amendment by this reference to the fullest extent as if the text of such Section were set forth in its entirety herein.

[Signatures on the following pages]

X-2

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

UNITED DOMINION REALTY TRUST, INC., a

Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

X-3

GREEN PARK FINANCIAL LIMITED
PARTNERSHIP, a District of Columbia limited
partnership
By:	Walker & Dunlop GP, LLC, a Delaware
limited liability company, its managing general
partner
By:
Name:
Title:

X-4

FANNIE MAE, a federally-chartered and

stockholder-owned corporation organized and

existing under the Federal National Mortgage

Association Charter Act, § 12 U.S.C. 1716, et seq.

By:

Name:

Title:

X-5

EXHIBIT Y TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

CREDIT FACILITY TERMINATION REQUEST

CREDIT FACILITY TERMINATION REQUEST

     THE MASTER AGREEMENT PURSUANT TO WHICH THIS REQUEST IS DELIVERED REQUIRES THAT THIS AGREEMENT SHALL TERMINATE, AND YOU SHALL CAUSE ALL OF THE COLLATERAL TO BE RELEASED FROM THE COLLATERAL POOL, AT A CLOSING TO BE HELD AT OFFICES DESIGNATED BY YOU ON A CLOSING DATE SELECTED BY YOU, WITHIN 30 BUSINESS DAYS AFTER YOUR RECEIPT OF THE CREDIT FACILITY TERMINATION REQUEST (OR ON SUCH OTHER DATE TO WHICH WE MAY AGREE), AS LONG AS ALL CONDITIONS CONTAINED IN SECTION 10.03 OF THE MASTER AGREEMENT ARE SATISFIED. REFERENCE IS MADE TO THE MASTER AGREEMENT FOR THE SCOPE OF THE LENDER’S OBLIGATIONS WITH RESPECT TO THIS REQUEST.

                                        , 20     

VIA:                                         

Green Park Financial Limited Partnership
7500 Old Georgetown Road
Bethesda, Maryland 20814
Attention:                                        
[Note: Subject to change in the event Lender or its address changes]

Re: CREDIT FACILITY TERMINATION REQUEST issued pursuant to Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002, by and among the undersigned (the “Borrower”) and the Lender (as amended from time to time, the “Master Agreement”)

Ladies and Gentlemen:

This constitutes a Credit Facility Termination Request pursuant to the terms of the above-referenced Master Agreement.

     Section 1. Request. The Borrower hereby requests a termination of the Master Agreement and the Credit Facility in accordance with the terms of the Master Agreement. All documents, instruments and certificates required to be delivered pursuant to the conditions contained in Section 10.03 of the Master Agreement will be delivered on or before the Closing Date.

     Section 2. Prepayments and Termination Fee. The Borrower shall pay in full all Notes Outstanding and the required Facility Termination Fee as a condition to the termination of the Master Agreement and the Credit Facility.

     Section 3. Capitalized Terms. All capitalized terms used but not defined in this Request shall have the meanings ascribed to such terms in the Master Agreement.

Y-1

Sincerely,

UNITED DOMINION REALTY TRUST, INC.,

a Virginia corporation

By:

Name: Ella S. Neyland

Title: Executive Vice President and Treasurer

Y-2

EXHIBIT Z TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

[INTENTIONALLY OMITTED]

EXHIBIT AA TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

INDEPENDENT UNIT ENCUMBRANCES

INDEPENDENT UNIT ENCUMBRANCES

None

AA-1

FIRST AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the 17th day of March, 2004, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”) and UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company (“UDR Ridgewood”) (individually and collectively, UDRT and UDR Ridgewood, the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. UDRT and Lender entered into that certain Amended and Restated Master Credit Facility Agreement dated as of June 24, 2002, as amended from time to time, (the “Master Agreement”), pursuant to which the Lender agreed to make credit available to the Borrower under the terms and conditions set forth in the Master Agreement.

     B. Pursuant to that certain Reaffirmation and Joinder Agreement dated as of even date herewith, UDR Ridgewood joined into the Master Agreement as if it were an original Borrower thereunder.

     C. 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 Agreement and Other Loan Documents, dated as of June 24, 2003 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     D. The parties are executing this Amendment pursuant to the Master Agreement to reflect (i) the release from the Collateral Pool of (3) Mortgaged Properties commonly known as (a) Westland Park, located in Florida, (b) River Place, located in Georgia, and (c) Greens at Cedar Chase located in Delaware, all owned, directly or indirectly, by UDRT, and (ii) the addition to the Collateral Pool of one (1) Mortgaged Property commonly known as Aspen Hill View (Ridgewood Townhomes) owned by UDR Ridgewood, located in Maryland and owned indirectly by UDRT.

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

     Section 1. Release of Mortgaged Properties. The Mortgaged Properties commonly known as Westland Park, River Place and Greens at Cedar Chase are hereby released from the Collateral Pool under the Master Agreement.

     Section 2. Addition of Mortgaged Property. The Mortgaged Property commonly known as Aspen Hill View (Ridgewood Townhomes) owned by UDR Ridgewood is hereby

added to the Collateral Pool under the Master Agreement.

     Section 3. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached to this Amendment.

     Section 4. 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 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.

     Section 7. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Its:	Executive Vice President and Treasurer
UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company
By:	UNITED DOMINION REALTY, L.P. a Delaware limited partnership, Manager
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By:	/s/ Ella S. Neyland
		Name:	Ella S. Neyland
		Its:	Executive Vice President and Treasurer

3

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Maurice D. Walker
	Name:	Maurice D. Walker
	Title:	Senior Vice President

4

EXHIBIT A
SCHEDULE OF MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Arbors at Lee Vista	5900 Bent Pine Drive Orlando, Florida 32822	$	22,100,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000
Ridgewood Townhomes	4101 Postgate Terrace Silver Spring, Maryland 20906	$	23,000,000

A-1

SECOND AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS SECOND AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the 29th day of December, 2004, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”) and UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company (“UDR Ridgewood”) (individually and collectively, UDRT and UDR Ridgewood, the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect the modification of certain terms of the Master Agreement as set forth herein.

     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. Definitions. The following is hereby added to Article I of the Master Agreement immediately preceding the definition of “Multifamily Residential Property:”

     “Multifamily REIT Preferred Interest” means a preferred equity interest: (a) owned by a member of the Consolidated Group; (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily residential apartment communities; (c) having trading privileges on a national securities exchange or that is the subject of price quotations in the over-the-counter market (including the NASDAQ National Market) as reported by the National Association of Securities Dealers Automated Quotation System; and (d) not subject to restrictions (whether contractual or under Applicable Law) on sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would exceed 90 days from the time of purchase, that would otherwise prevent such preferred equity interests from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to preferred equity interests

that could be sold pursuant to a registration or an available exemption under the Securities Act of 1933, as amended.

     Section 2. Financial Definitions. Section 15.01 of the Master Agreement is hereby deleted in its entirety and restated as follows:

     “Cash Equivalents” means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, or (ii) any domestic commercial bank of recognized standing (y) having capital and surplus in excess of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at least A-2 (and not lower than A-3) or the equivalent thereof or from Moody’s is at least P-2 (and not lower than P-3) or the equivalent thereof (any such bank being an “Approved Bank”), in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated at least A-2 (and not lower than A-3) or the equivalent thereof by S&P or at least P-2 (and not lower than P-3) or the equivalent by Moody’s and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by a Person with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (e) obligations of any State of the United States or any political subdivision thereof, the interest with respect to which is exempt from federal income taxation under Section 103 of the Code, having a long term rating of at least AA- or Aa-3 by S&P or Moody’s, respectively, and maturing within three years from the date of acquisition thereof, (f) Investments in municipal auction preferred stock (i) rated A- (or the equivalent thereof) or better by S&P or A3 (or the equivalent thereof) or better by Moody’s and (ii) with dividends that reset at least once every 365 days and (g) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $100,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (f).

     “Consolidated Adjusted EBITDA” means for any period for the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated EBITDA” means for any period for the Consolidated Group, the sum of Consolidated Net Income plus Consolidated Interest Expense plus all provisions

2

for any Federal, state, or other income taxes plus depreciation, amortization and other non cash charges, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding in any event gains and losses on Investments and extraordinary gains and losses, and taxes on such excluded gains and tax deductions or credit on account of such excluded losses. Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (i) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (ii) the Intangible Assets of the Consolidated Group.

     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and the implied interest component under Securitization Transactions in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Income” means for any period the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

     “Consolidated Net Operating Income” means, for any period for any multifamily asset of the Consolidated Group, an amount equal to (i) the aggregate rental and other income from the operation of such asset during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of such asset (including, without limitation, real estate taxes, a 3% management fee, and bad debt expenses) during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis. For properties held in non-wholly owned subsidiaries, Borrower’s share of Consolidated Net Operating Income will be included.

     “Consolidated Net Operating Income from Unencumbered Pool Assets” (i) the aggregate rental and other income from the operation of the Unencumbered Pool

3

Assets during such period; minus all expenses and other proper charges incurred in connection with the operation of the Unencumbered Pool Assets (including, without limitation, real estate taxes and bad debt expenses) during such period; but in any case, before payment of provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP on a consistent basis minus (ii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

     “Consolidated Total Fixed Charges” means as of the last day of each fiscal quarter for the Consolidated Group, the sum of (i) the cash portion of Consolidated Interest Expense paid in the fiscal quarter ending on such day plus (ii) scheduled maturities of Consolidated Funded Debt (excluding the amount by which a final installment exceeds the next preceding principal installment thereon) in the fiscal quarter ending on such day plus (iii) all cash dividends and distributions on preferred stock or other preferred beneficial interests of members of the Consolidated Group paid in the fiscal quarter ending on such day, all on a consolidated basis determined in accordance with GAAP on a consistent basis.

     “Consolidated Unsecured Debt” means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

     “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (vi) all obligations of such person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn), but excluding obligations in respect of letters of credit issued for the payment of real estate taxes, special assessments on real properties and utility deposits, in an aggregate amount not to exceed $20,000,000, (vii) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (viii) all obligations of others Guaranteed by such Person, (ix) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person and (x) all obligations of such person owing under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata portion of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse

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portion of the Debt, shall be included as Debt of such Person).

     “Development Property” means a Real Property currently under development (or in the pre-development phase) as a Multifamily Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following clauses (b) or (c) owned by any member of the Consolidated Group for such period minus a reserve of $125 per apartment unit located on a Property, multiplied by (ii) 2 and divided by (iii) 8.25%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during this period of four consecutive fiscal quarters most recently ended (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c) the current book value of any Development Property (or Multifamily Property that was a Development Property at any time during the period of four consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such notes where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests); (h) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not already included. Notwithstanding the foregoing, the amount by which the value of the assets included under any of the preceding clauses (d), (e), (f), (g) and (i) (excluding any promissory note secured by a Lien on a Multifamily Property and any raw land which such Person intends to develop as a Multifamily Property), including the Borrower’s pro rata share of any such assets included under the preceding clause (i), would, in the aggregate, account for more than 5.0% of Gross Asset Value shall be excluded for purposes of determining Gross Asset Value.

     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Development Properties would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of raw land would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool;

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(c) the amount by which the value of Properties that are developed but that are not Multifamily Properties would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool; (d) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of (i) promissory notes, including any secured by a Mortgage, payable to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower, and (ii) all marketable securities (excluding Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 15.0% of Gross Asset Value of the Unencumbered Pool; (e) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; (f) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 10.0% of Gross Asset Value of the Unencumbered Pool; and (g) the amount by which the value (based on the lower of cost or market price determined in accordance with GAAP) of promissory notes that are not secured by a Mortgage would, in the aggregate, account for more than 5.0% of Gross Asset Value of the Unencumbered Pool. In addition, Gross Asset Value of the Unencumbered Pool shall be determined without including (or otherwise giving credit to) any Unencumbered Pool Assets owned by a Subsidiary that is not a Guarantor if such Subsidiary is an obligor, as of the relevant date of determination, with respect to any Debt (other than Secured Debt that is Nonrecourse Indebtness and those items of Debt set forth in clauses (c) and (d) of the definition of the term Debt). In addition to the foregoing limitations, the amount by which the value of Development Properties, Properties that are developed but that are not Multifamily Properties, raw land, promissory notes and marketable securities (including Multifamily REIT Preferred Interests) would, in the aggregate, account for more than 25.0% of Gross Asset Value of the Unencumbered Pool shall be excluded for purposes of determining Gross Asset Value of the Unencumbered Pool. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties that are developed, but that are not Multifamily Properties, must exceed 85.0%. Any Multifamily Property or other such Property otherwise includable in determination of Gross Asset Value of the Unencumbered Pool, but for noncompliance with the Occupancy Rate requirement in the preceding sentence, shall be considered to be a Development Property for purposes of determining Gross Asset Value of the Unencumbered Pool (with the value of such Multifamily Properties of other Properties be determined in a manner consistent with clause (a) of the definition of Gross Asset Value).

     “Intangible Assets” of any Person means at any date the amount of (i) all write ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of

6

the following: (a) the purchase or other acquisition of any equity interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Securitization Transaction” means any financing transaction or series of financing transactions that have been or may be entered into by a member of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer to (i) a Subsidiary or affiliate (a “Securitization Subsidiary”) or (ii) any other Person, or may grant a security interest in, any Receivables or interest therein secured by merchandise or services financed thereby (whether such Receivables are then existing or arising in the future) of such member of the Consolidated Group, and any assets related thereto, including without limitation, all security interests in merchandise or services financed thereby, the proceeds of such Receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets. (Receivables means any right of payment from or on behalf of any obligor, whether constituting an account, chattel paper, instrument, general intangible or otherwise, arising from the sale

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or financing by a member of the Consolidated Group or merchandise or services, and monies due thereunder, security in the merchandise and services financed thereby, records related thereto, and the right to payment of any interest or finance charges and other obligations with respect thereto, proceeds from claims on insurance policies related thereto, any other proceeds related thereto, and any other related rights.)

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property, (iv) raw land, (v) promissory notes and (vi) marketable securities (including Multifamily REIT Preferred Interests); (b) neither such asset, nor any interest of any member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 66.67% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually, or collectively, materially impair the value of such Property.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

     Section 3. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.06 Consolidated Funded Debt Ratio. As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, Consolidated

8

Funded Debt to Gross Asset Value shall not exceed 60%.

     Section 4. Consolidated Total Fixed Charge Coverage Ratio. Section 15.07 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.07 Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Adjusted EBITDA to Consolidated Total Fixed Charges for the fiscal quarter then ended shall be not less than 1.4:1.0.

     Section 5. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool . As of the last day of each fiscal quarter, based on the preceding two (2) fiscal quarters, annualized, the ratio of Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool Assets shall not exceed 60%.

     Section 6. Minimum Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     SECTION 15.09 Minimum Unencumbered Interest Coverage Ratio. The ratio of (i) Consolidated Net Operating Income attributable to Unencumbered Pool Assets and income attributable to promissory notes and marketable securities (including Multifamily REIT Preferred Interests) included as Unencumbered Pool Assets, in each case for the two fiscal quarter period most recently ending (annualized) to (ii) Consolidated Interest Expense relating to Consolidated Unsecured Debt of the Consolidate Group, including without limitation, interest expense, if any, attributable to such promissory notes and marketable securities (including Multifamily REIT Preferred Interest), on a consolidated basis for such period (all of the foregoing as annualized), to be less than 1.75 to 1.0 at the end of any fiscal quarter.

     Section 7. 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 8. 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 9. 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.

     Section 10. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

9

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Its:	Senior Vice President - Finance and Treasurer
UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company
By:	UNITED DOMINION REALTY, L.P. a Delaware limited partnership, Manager
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
		By:	/s/ Rodney A. Neuheardt
		Name:	Rodney A. Neuheardt
		Its:	Senior Vice President - Finance and Treasurer

10

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Maurice D. Walker
	Name:	Maurice D. Walker
	Title:	Senior Vice President

11

THIRD AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS THIRD AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is made as of the 18^th day of March, 2005, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company (“UDR Ridgewood”), and UDR WESTERN RESIDENTIAL, INC., a Virginia corporation (“UDR Western”) (individually and collectively, UDRT, UDR Ridgewood and UDR Western, the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect (i) the release from the Collateral Pool of the Mortgaged Property commonly known as Ridgewood Townhomes owned by UDR Ridgewood, and (ii) the addition to the Collateral Pool of the Mortgaged Property commonly known as Sierra Palms owned by UDR Western.

     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. Release of Mortgaged Property. The Mortgaged Property commonly known as Ridgewood Townhomes owned by UDR Ridgewood is hereby released from the Collateral Pool under the Master Agreement and Loan Documents. UDR Ridgewood is hereby released from its obligations under the Master Agreement and Loan Documents.

     Section 2. Addition of Mortgaged Property. The Mortgaged Property commonly known as Sierra Palms owned by UDR Western is hereby added to the Collateral Pool under the Master Agreement.

     Section 3. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached to this Amendment.

     Section 4. 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 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.

     Section 7. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer
UDR RIDGEWOOD (I) TOWNHOMES, LLC, a Virginia limited liability company
By:	HARDING PARK, INC., a Delaware corporation, its Sole Member
	By:	/s/ W. Mark Wallis
	Name:	W. Mark Wallis
	Title:	President
UDR WESTERN RESIDENTIAL, INC., a Virginia corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer

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LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Maurice D. Walker
	Name:	Maurice D. Walker
	Title:	Senior Vice President

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EXHIBIT A
SCHEDULE OF MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Arbors at Lee Vista	5900 Bent Pine Drive Orlando, Florida 32822	$	22,100,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000
Sierra Palms	1100 North Priest Drive Chandler, Arizona 85226	$	27,440,000

A-1

FOURTH AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS FOURTH AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the 30th day of September, 2005, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), and UDR WESTERN RESIDENTIAL, INC., a Virginia corporation (“UDR Western”) (individually and collectively, UDRT and UDR Western, the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect the modification of certain terms of the Master Agreement as set forth herein.

     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. Financial Definitions. Section 15.01 of the Master Agreement is hereby deleted in its entirety and restated as follows:

     “1031 Property” means property held by a “qualified intermediary” in connection with the sale of such property by the Borrower, a Subsidiary or Unconsolidated Affiliate pursuant to, and qualifying for tax treatment under, Section 1031 of the Internal Revenue Code.

     “Condominium Property” means a Multifamily Property that has been converted into residential condominium units for the purpose of sale. For purposes of this definition and the definition of “Condominium Property Value” a Multifamily Property will be deemed “converted” into residential condominium units once both of the following have occurred: (a) notice of the conversion has been sent to the tenants of such Property; and (b) a declaration of condominium or other similar document is filed with the applicable Governmental Authority.

     “Condominium Property Value” means the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for the two quarter period annualized ending immediately prior to such conversion divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such conversion not to exceed 35% of the amount determined in accordance with the preceding clause (a), minus (c) 90% of the actual contractual sales price of each individual condominium unit sale prior to any deductions for commissions, fees and any other expenses; provided, however, no value will be attributed to such a Condominium Property 24 months after its conversion. In addition, no value shall be attributable to a Condominium Property at any time following the earlier of (x) all condominium units of such Property having been sold or otherwise conveyed, (y) the management of such Property having been turned over to such Property’s homeowners’ association and (z) less than 10% of the units remain unsold.

     “Consolidated Adjusted EBITDA” means for any period the Consolidated Group the sum of Consolidated EBITDA for such period minus a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year). Except as expressly provided otherwise, the applicable period shall be for the single fiscal quarter ending as of the date of determination.

     “Consolidated Adjusted Tangible Net Worth” means at any rate:

     (iii) the sum of (A) the consolidated shareholders equity of the Consolidated Group (net of Minority Interests) plus (B) accumulated depreciation of real estate owned to the extent reflected in the then book value of the Consolidated Assets, minus without duplication

     (iv) the Intangible Assets of the Consolidated Group.

     “Consolidated Assets” means the assets of the members of the Consolidated Group determined in accordance with GAAP on a consolidated basis.

     “Consolidated EBITDA” means for any period for the Consolidated Group, Consolidated Net Income (including Consolidated Net Income attributable to units of Condominium Properties prior to the sale thereof) excluding the following amounts (but only to the extent included in determining Consolidated Net Income for such period) (a) Consolidated Interest Expense; (b) all provisions for any Federal, state or other income taxes; (c) depreciation, amortization and other non-cash charges; (d) gains and losses on Investments and extraordinary gains and losses; (e) taxes on such excluded gains and tax deductions or credits on account of such excluded losses, in each case on a consolidated basis determined in accordance with GAAP; and (f) to the extent not already included in the immediately preceding clauses (b) through (e), the Borrower’s pro rata share of such items of each Unconsolidated Affiliate of the Borrower for such period. Consolidated EBITDA shall include gain or loss, in either case, realized on the sale of any portion of a Condominium Property (without duplication of income on condominium units).

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     “Consolidated Funded Debt” means total Debt of the Consolidated Group on a consolidated basis determined in accordance with GAAP (excluding (i) Debt consisting of contingent liabilities retained by the Borrower related to the sale of Hunting Ridge, Woodside and Twin Coves in an aggregate amount not to exceed $20,000,000 and (ii) the aggregate amount, not to exceed $20,000,000, available to be drawn under letters of credit issued in respect of normal operating expenses of such Person) plus the Borrower’s pro rata share of the Debt of any Unconsolidated Affiliate of the Borrower.

     “Consolidated Group” means the Borrower and its consolidated Subsidiaries, as determined in accordance with GAAP.

     “Consolidated Interest Expense” means for any period for the Consolidated Group, (a) all interest expense, including the amortization of debt discount and premium, the interest component under capital leases and capitalized interest expense (other than capitalized interest funded from a construction loan interest reserve account held by another lender and not included in the calculation of cash for balance sheet reporting purposes), in each case on a consolidated basis determined in accordance with GAAP plus (b) to the extent not already included in the foregoing clause (a), the Borrower’s pro rata share of all interest expense (determined in a manner consistent with this definition of Consolidated Interest Expense) for such period of Unconsolidated Affiliates of the Borrower.

     “Consolidated Net Income” means for any period, the net income of the Consolidated Group on a consolidated basis determined in accordance with GAAP, including the Borrower’s pro rata share of the net income of each Unconsolidated Affiliate of the Borrower for such period.

     “Consolidated Net Operating Income” means, for any period for any Multifamily Property owned by a member of the Consolidated Group or an Unconsolidated Affiliate, an amount equal to (a) the aggregate rental and other income from the operation of such Multifamily Property during such period; minus (b) all expenses and other proper charges incurred in connection with the operation of such Multifamily Property (including, without limitation, real estate taxes and bad debt expenses) during such period and an imputed management fee in the amount of 3.0% of the aggregate rents received for such Multifamily Property during such period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, and depreciation, amortization and other non-cash expenses for such period, all on a consolidated basis determined in accordance with GAAP. For purposes of determining Consolidated Net Operating Income, only the Borrower’s pro rata share of the Consolidated Net Operating Income of any such Property owned by an Unconsolidated Affiliate of the Borrower shall be used.

     “Consolidated Secured Debt” means, as of any given date, all Consolidated Funded Debt that is secured in any manner by any Lien.

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     “Consolidated Total Fixed Charges” means for any period, the sum of (a) the cash portion of Consolidated Interest Expense paid during such period plus (b) regularly scheduled principal payments on Consolidated Funded Debt during such period (excluding any balloon, bullet or similar principal payment payable on any Consolidated Funded Debt which repays such Consolidated Funded Debt in full) plus (c) all cash dividends and distributions on Preferred Equity Interests of members of the Consolidated Group paid during such period, all on a consolidated basis determined in accordance with GAAP.

     “Consolidated Unsecured Debt” means, as of a given date, all Consolidated Funded Debt that is not Consolidated Secured Debt.

     “Debt” of any Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business), (d) all Capitalized Lease Obligations of such Person; (e) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property; (f) all obligations of such Person to reimburse any bank or other person in respect of amounts payable under a letter of credit or similar instrument (being the amount available to be drawn thereunder, whether or not then drawn); (g) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person; (h) all obligations of others Guaranteed by such Person; (i) all obligations which in accordance with GAAP would be shown as liabilities on a balance sheet of such Person or which arise in connection with forward equity transactions; and (j) all obligations of such Person owning under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, but is classified as an operating lease in accordance with GAAP. Debt of any Person shall include Debt of any partnership or joint venture in which such Person is a general partner or joint venturer to the extent of such Person’s pro rata share of the ownership of such partnership or joint venture (except if such Debt is recourse to such Person, in which case the greater of such Person’s pro rata portion of such Debt or the amount of the recourse portion of the Debt, shall be included as Debt of such Person). All Loans and Letter of Credit Liabilities shall constitute Debt of the Borrower.

     “Development Property” means (i) a Property currently under development (or in the pre-development phase) as a Multifamily Property and/or (ii) a Condominium Property.

     “Gross Asset Value” means from time to time the sum of the following amounts (without duplication): (a) the product of (i) Consolidated Net Operating Income for the period of two consecutive fiscal quarters most recently ended attributable to Multifamily Properties (excluding any Properties covered by either of the immediately following

4

clauses (b) or (c) owned by any member of the Consolidated Group for such period, multiplied by (ii) 2 and divided by (iii) 7.50%; (b) the purchase price paid for any Multifamily Property acquired by any member of the Consolidated Group during the period of six consecutive fiscal quarters most recently ended (less any amounts paid as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements); (c)(i) the Condominium Property Value of all Condominium Properties owned by any member of the Consolidated Group, (ii) the current book value of any other Development Property (or Multifamily Property that was a Development Property at any time during the period of six consecutive fiscal quarters most recently ended) owned by any member of the Consolidated Group and (iii) the Renovation Property Value of all Renovation Properties owned by any member of the Consolidated Group; (d) unrestricted cash and cash equivalents of the Consolidated Group; (e) the value (based on the lower of cost or market price determined in accordance with GAAP) of any raw land owned by any member of the Consolidated Group; (f) the value (based on the lower of cost or market price determined in accordance with GAAP) of Properties owned by any member of the Consolidated Group that are developed but that are not Multifamily Properties; (g) the value (based on the lower of cost or market price determined in accordance with GAAP) of all Multifamily REIT Preferred Interests; (h) the value (based on the lower of cost market price determined in accordance with GAAP) of (i) all promissory notes, including any secured by a Mortgage, payable solely to any member of the Consolidated Group and the obligors of which are not Affiliates of the Borrower (excluding any such note where the obligor is more than 60 days past due with respect to any payment obligation) and (ii) all marketable securities (excluding Marketable Multifamily REIT Preferred Interests); and (i) the Borrower’s pro rata share of the preceding items of any Unconsolidated Affiliate of the Borrower to the extent not already included. Notwithstanding the foregoing, any determination of Gross Asset Value shall exclude any Investments held by the Borrower or any Subsidiary.

     “Gross Asset Value of the Unencumbered Pool” means Gross Asset Value determined with reference only to Unencumbered Pool Assets. Notwithstanding the foregoing, the following amounts shall be excluded from Gross Asset Value of the Unencumbered Pool: (a) the amount by which the value of Unencumbered Pool Assets owned by Subsidiaries that are not Guarantors would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; (b) the amount by which the value of the Unencumbered Pool Assets owned by Subsidiaries are not Wholly Owned Subsidiaries would, in the aggregate, account for more than 20.0% of Gross Asset Value of the Unencumbered Pool; and (c) the amount by which the value of Unencumbered Pool Assets that are Investments and other assets would, in the aggregate, account for more than 20.0% of the Gross Asset Value of the Unencumbered Pool; provided, the limitations contained in the immediately preceding clauses (a) and (b) shall not apply to 1031 Properties and the limitations contained in the immediately preceding clause (c) shall not apply to promissory notes secured by first Mortgages. The aggregate Occupancy Rate of Multifamily Properties and other Properties that are developed, but that are not Multifamily Properties, must exceed 80.0%.

     “Intangible Assets” of any Person means at any date the amount of (i) all write

5

ups (other than write-ups resulting from write-ups of assets of a going concern business made within twelve months after the acquisition of such business) in the book value of any asset owned by such Person and (ii) all unamortized debt discount and expense, unamortized deferred charges, capitalized start up costs, goodwill, patents, licenses, trademarks, trade names, copyrights, organization or developmental expenses, covenants not to compete and other intangible items.

     “Investment” means, (x) with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, by means of any of the following: (a) the purchase or other acquisition of any equity interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, guaranty of debt of, or purchase or other acquisition of any Debt of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person and (y) with respect to any Mortgaged Property or other asset, the acquisition thereof. Any binding commitment to make an investment in any other Person, as well as any option of another Person to require an Investment in such Person, shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “Marketable Multifamily REIT Preferred Interest” means a Multifamily REIT Preferred Equity Interest: (a) having trading privileges on a national securities exchange or that is subject to price quotations in the over-the-counter market and (b) not subject to restrictions on the sale, transfer, assignment, hypothecation or other limitations, in each case where such restriction would exceed 90 days from the time of purchase, that would (whether contractual or under Applicable Law) otherwise prevent such Preferred Equity Interest from being freely transferable by such member of the Consolidated Group; provided, however, that this limitation shall not apply to Preferred Equity Interests that could be sold pursuant to an available exemption under the Securities Act.

     “Multifamily REIT Preferred Interest” means any Preferred Equity Interest: (a) owned by a member of the Consolidated Group and (b) issued by a REIT that (i) is not a Subsidiary and (ii) owns primarily apartment communities.

     “Minority Interest” means any shares of stock (or other equity interests) of any class of a Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more Wholly Owned Subsidiaries. Minority Interests constituting preferred stock shall be valued at the voluntary or involuntary liquidation value of such preferred stock, whichever is greater, and by valuing common stock at the book value of the capitalized surplus applicable thereto adjusted by the foregoing method of valuing Minority Interests in preferred stock.

     “Multifamily Property” means any Real Property on which the improvements

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consist primarily of an apartment community.

     “Real Property” means any parcel of real property owned or leased (in whole or in part) or operated by the Borrower, any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is located in a state of the United States of America or the District of Columbia.

     “Realty” means all real property and interests therein, together with all improvements thereon.

     “Renovation Property” mean a Property on which the existing building or other improvements or a portion thereof are undergoing renovation and redevelopment that will either (a) disrupt the occupancy of at least 30% of the square footage of such Property or (b) temporarily reduce the Consolidated Net Operating Income attributable to such Property by more that 30% as compared to the immediately preceding comparable prior period. A Property shall cease to be a Renovation Property upon the earliest to occur of (i) all improvements (other than tenant improvements on unoccupied space) related to the redevelopment of such Property having been substantially completed and (ii) once such Property has achieved an Occupancy Rate of 80.0% or more.

     “Renovation Property Value” means for a Renovation Property, the sum of the following: (a) the Consolidated Net Operating Income attributable to such Property for the two quarter period annualized ending immediately prior to the commencement of such renovation and redevelopment divided by 7.50%, plus (b) the cost of capital improvements made to such Property in connection with such renovation and redevelopment not to exceed 35% of the amount determined in accordance with the preceding clause (a); provided, however, (i) the value of (a) plus (b) above does not exceed 80% of the Borrower’s good faith determination of the pro forma Consolidated Net Operating Income of such Renovation Property (assuming the completion of all applicable renovation and redevelopment) divided by 7.50% and (ii) 18 months following the commencement of such renovation and redevelopment such property will cease to be a Renovation Property.

     “Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “Unencumbered Pool Asset” means any asset owned by a member of the Consolidated Group or an Unconsolidated Affiliate of the Borrower and that satisfies all of the following requirements: (a) such asset is either (i) a Multifamily Property, (ii) a Property that is developed but that is not a Multifamily Property, (iii) a Development Property or a Renovation Property, (iv) raw land, (v) promissory notes (vi) marketable securities (including Marketable Multifamily REIT Preferred Interests) and (vii) Multifamily REIT Preferred Interests; (b) neither such asset, nor any interest of any

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member of the Consolidated Group or Unconsolidated Affiliate therein, is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; (c) if such asset is owned by Person other than the Borrower (i) none of the Borrower’s direct or indirect ownership interest in such Person is subject to any Lien (other than Permitted Liens of the types described in clauses (a) through (c) of the definition thereof) or to any Negative Pledge; and (ii) the Borrower directly, or indirectly through a Subsidiary, has the right to take the following actions without the need to obtain the consent of any Person: (x) sell, transfer or otherwise dispose of such asset and (y) to create a Lien on such asset as security for Debt of the Borrower or such Guarantor, as applicable; (d) if such asset is owned by a Subsidiary or Unconsolidated Affiliate which is not a Guarantor (i) the Borrower directly, or indirectly through other Subsidiaries, owns at least 51.0% of all outstanding Equity Interests of such Person; and (ii) such Person is not an obligor with respect to any Debt (other than unsecured Debt of the type set forth in clauses (c) and (d) of the definition of the term Debt), provided however, 1031 Properties will not be subject to the limitations contained in subclauses (i) and (ii) of this clause (d); and (e) in the case of a Property, such Property is free of all structural defects or major architectural deficiencies (if developed), title defects, environmental conditions or other adverse matters which, individually or collectively, materially impair the value of such Property.

     “Wholly Owned Subsidiary” means as to any person, any Subsidiary all of the voting stock or other similar voting interest are owned directly or indirectly by such Person. Unless otherwise provided, references to “Wholly Owned Subsidiary” shall mean Wholly Owned Subsidiaries of the Borrower.

     Section 2. Consolidated Adjusted Tangible Net Worth. Section 15.05 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.05 Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth will not at any time be less than $1,200,000,000.”

     Section 3. Consolidated Funded Debt Ratio. Section 15.06 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.06 Consolidated Funded Debt Ratio. The ratio of (i) Consolidated Funded Debt to (ii) Gross Asset Value, will not exceed 0.625 to 1.0 at any time; provided, however, that if such ratio is greater than 0.625 to 1.0 but less than 0.675 to 1.0, then such failure to comply with the foregoing covenant shall not constitute a Default or Event of Default so long as such ratio ceases to exceed 0.625 to 1.00 within 180 days following the date such ratio first exceeded 0.625 to 1.00.”

     Section 4. Consolidated Unsecured Debt to Gross Asset Value of the Unencumbered Pool. Section 15.08 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “SECTION 15.08 Consolidated Unsecured Debt to Gross Asset Value of the

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Unencumbered Pool. The ratio of (i) Gross Asset Value of the Unencumbered Pool to (ii) Consolidated Unsecured Debt, will not be less than 1.50 to 1.00 at the end of any fiscal quarter.”

     Section 5. Consolidated Unencumbered Interest Coverage Ratio. Section 15.09 of the Master Agreement is hereby deleted in its entirety and replaced with the following:

     “[INTENTIONALLY DELETED]”

     Section 6. 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 7. 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 8. 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.

     Section 9. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer
UDR WESTERN RESIDENTIAL, INC., a Virginia corporation
By:	/s/ Rodney A. Neuheardt
Name:	Rodney A. Neuheardt
Title:	Senior Vice President—Finance & Treasurer

10

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Christopher Lynch
	Name:	Christopher Lynch
	Title:	SVP & CFO

11

FIFTH AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS FIFTH AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the 4th day of May, 2006, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), and UDR WESTERN RESIDENTIAL, INC., a Virginia corporation (“UDR Western”) (individually and collectively, UDRT and UDR Western, the “Borrower”) and (ii) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. The Borrower and the Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of the Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect the release from the Collateral Pool of the Mortgaged Property commonly known as Sierra Palms.

     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. Release of Mortgaged Property. The Mortgaged Property commonly known as Sierra Palms is hereby released from the Collateral Pool under the Master Agreement and Loan Documents.

     Section 2. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached to this Amendment.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
UDR WESTERN RESIDENTIAL, INC., a Virginia corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President

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LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Sandra G. Hayward
	Name:	Sandra G. Hayward
	Title:	Vice President

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EXHIBIT A
SCHEDULE OF MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Arbors at Lee Vista	5900 Bent Pine Drive Orlando, Florida 32822	$	22,100,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000

A-1

SIXTH AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS SIXTH AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the 22^nd day of June, 2006, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (ii) UDR WESTERN RESIDENTIAL, INC., a Virginia corporation (“UDR Western”) (iii) UDR OF TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”), (individually and collectively, UDRT, UDR Western, and UDR Tennessee, the “Borrower”), and (iv) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. Borrower and Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect the addition of the Mortgaged Property commonly known as Preserve at Brentwood to the Collateral Pool.

     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. Addition of Mortgaged Property. The Mortgaged Property commonly known as Preserve at Brentwood is hereby added to the Collateral Pool under the Master Agreement and Loan Documents.

     Section 2. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached to this Amendment.

     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. 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 5. 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.

     Section 6. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
UDR WESTERN RESIDENTIAL, INC., a Virginia corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President

3

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Sandra Hayward
	Name:	Sandra Hayward
	Title:	Vice President

4

EXHIBIT A
SCHEDULE OF MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Arbors at Lee Vista	5900 Bent Pine Drive Orlando, Florida 32822	$	22,100,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000
Preserve at Brentwood	370 Oakley Drive Nashville, Tennessee 37211	$	32,000,000

A-1

SEVENTH AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the 27^th day of June, 2006, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (ii) UDR OF TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”), (iii) WINDEMERE AT SYCAMORE HIGHLANDS, LLC, a Delaware limited liability company (“Windemere”) (individually and collectively, UDRT, UDR Tennessee and Windemere, the “Borrower”), and (iv) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. Borrower and Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as amended from time to time, the “Master Agreement”).

     B. All of Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to reflect the simultaneous release of the Mortgaged Property commonly known as Arbors at Lee Vista from the Collateral Pool and addition of the Mortgaged Property commonly known as Windemere at Sycamore Highlands to the Collateral Pool, thereby effecting a substitution of Collateral.

     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 7. Substitution of Mortgaged Property. The Mortgaged Property commonly known as Arbors at Lee Vista is hereby released from the Collateral Pool under the Master Agreement and the Loan Documents, and the Mortgaged Property commonly known as Windemere at Sycamore Highlands is hereby added to the Collateral Pool under the Master Agreement and the Loan Documents.

     Section 8. Exhibit A. Exhibit A to the Master Agreement is hereby deleted in its entirety and replaced with the Exhibit A attached to this Amendment.

     Section 9. 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 10. 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 11. 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.

     Section 12. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Justin R. Sato
Name:	Justin R. Sato
Title:	Vice President
UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Justin R. Sato
	Name:	Justin R. Sato
	Title:	Vice President
WINDEMERE AT SYCAMORE HIGHLANDS, LLC, a Delaware limited liability company
By:	UDR CALIFORNIA PROPERTIES, LLC, a Virginia limited liability company, Manager
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, Manager
		By:	/s/ Justin R. Sato
		Name:	Justin R. Sato
		Title:	Vice President

3

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Sandra G. Hayward
	Name:	Sandra G. Hayward
	Title:	VP

4

EXHIBIT A
SCHEDULE OF MORTGAGED PROPERTIES
AND INITIAL VALUATIONS

Property Name	Property Address	Initial Valuation
Alafaya Woods	407 Alafaya Woods Boulevard Oviedo, Florida 32765	$	15,500,000
Dominion West End	3900 Arcadia Lane Richmond, Virginia 23233	$	22,500,000
Dominion English Hills	8800 Queensmere Place Richmond, Virginia 23294	$	25,600,000
Dominion Great Oaks	3008 Autumn Branch Lane Ellicott City, Maryland	$	16,400,000
Dominion Middle Ridge	12280 Creekview Circle Woodbridge, Virginia 22192	$	20,400,000
Greens at Hilton Run	502 Hilton Drive Lexington Park, Maryland 20653	$	19,200,000
Gwinnett Square	4175 Satellite Boulevard Duluth, Georgia 30136	$	11,000,000
Hunter’s Ridge	1400 Plantation Boulevard Plant City, Florida 33567	$	15,450,000
Courthouse Green	6417 Statute Street Chesterfield, VA 23832	$	11,400,00
Lake Ridge	3216 Bluff View Court Lake Ridge, Virginia 22192	$	13,800,000
Yorkshire Downs	101 Little Bay Avenue Yorktown, Virginia 23693	$	10,500,000
Lakewood Place	350 Lakewood Dr. Brandon, Florida 33510	$	15,770,000
Los Altos	311 Los Altos Way Altamonte Springs, Florida 32714	$	17,600,000
Ashton at Waterford	12137 Ashton Manor Way Orlando, Florida 32828	$	23,600,000
Preserve at Brentwood	370 Oakley Drive Nashville, Tennessee 37211	$	32,000,000
Windemere at Sycamore Highlands	5925 Sycamore Canyon Boulevard Riverside, California 92507	$	___________

A-1

EIGHT AMENDMENT TO AMENDED AND RESTATED
MASTER CREDIT FACILITY AGREEMENT

     THIS EIGHT AMENDMENT TO AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT (the “Amendment”) is effective as of the 14^th day of February, 2007, by (i) UNITED DOMINION REALTY TRUST, INC., a Maryland corporation (“UDRT”), (ii) UDR OF TENNESSEE, L.P., a Virginia limited partnership (“UDR Tennessee”), (iii) WINDEMERE AT SYCAMORE HIGHLANDS, LLC, a Delaware limited liability company (“Windemere”) (individually and collectively, UDRT, UDR Tennessee and Windemere, the “Borrower”),and (iv) GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership (the “Lender”).

RECITALS

     A. Borrower and Lender are parties to or have joined into that certain Amended and Restated Master Credit Facility Agreement, dated as of June 24, 2002 (as the same may be amended, modified, supplemented or restated from time to time, the “Master Agreement”).

     B. All of Lender’s right, title and interest in the Master Agreement and the Loan Documents executed in connection with the Master Agreement or the transactions contemplated by the Master Agreement have been assigned to Fannie Mae pursuant to that certain Assignment of Collateral Agreement and Other Loan Documents, dated as of June 24, 2002 (the “Assignment”). Fannie Mae has not assumed any of the obligations of the Lender under the Master Agreement or the Loan Documents as a result of the Assignment. Fannie Mae has designated the Lender as the servicer of the Advances contemplated by the Master Agreement.

     C. The parties are executing this Amendment to amend certain terms of the Master Agreement as set forth below.

     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 13. Definition of Fannie Mae Commitment. The following new definition is hereby added to the Master Agreement:

“Fannie Mae Commitment” means a commitment from Fannie Mae to Lender for the purchase of a proposed Advance for cash having the terms agreed to by Lender and Borrower.

     Section 14. Breakage and Other Costs. Section 4.03 of the Master Agreement (entitled “Breakage and Other Costs”) is hereby deleted in its entirety and replaced with the following:

Breakage and other Costs. In the event that the Lender obtains an MBS Commitment or Fannie Mae Commitment and the Lender fails to fulfill the MBS Commitment or Fannie Mae Commitment because the Advance is not made (for a

reason other than the default of the Lender to make the Advance or (i) the failure of the purchaser of the MBS to purchase such MBS or (ii) the failure of Fannie Mae to purchase such Advance for cash, as applicable), the Borrower shall pay all breakage and other costs, fees and damages incurred by the Lender in connection with its failure to fulfill the MBS Commitment or Fannie Mae Commitment. The Lender reserves the right to require that the Borrower post a deposit at the time the MBS Commitment or Fannie Mae Commitment is obtained.

     Section 15. 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 16. 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 17. 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.

     Section 18. Applicable Law. The provisions of Section 23.06 of the Master Agreement (entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”) are hereby incorporated into this Amendment by this reference to the fullest extent as if the text of such provisions were set forth in their entirety herein.

[Signatures follow on next page]

2

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

BORROWER:
UNITED DOMINION REALTY TRUST, INC., a Maryland corporation
By:	/s/ Thomas P. Simon
Name:	Thomas P. Simon
Title:	Vice President and Treasurer
UDR OF TENNESSEE, L.P., a Virginia limited partnership
By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, its General Partner
	By:	/s/ Thomas P. Simon
	Name:	Thomas P. Simon
	Title:	Vice President and Treasurer
WINDEMERE AT SYCAMORE HIGHLANDS, LLC, a Delaware limited liability company
By:	UDR CALIFORNIA PROPERTIES, LLC, a Virginia limited liability company, Manager
	By:	UNITED DOMINION REALTY TRUST, INC., a Maryland corporation, Manager
		By:	/s/ Thomas P. Simon
		Name:	Thomas P. Simon
		Title:	Vice President and Treasurer

3

LENDER:
GREEN PARK FINANCIAL LIMITED PARTNERSHIP, a District of Columbia limited partnership
By:	Walker & Dunlop GP, LLC, a Delaware limited liability company, its managing general partner
	By:	/s/ Sandra Hayward
	Name:	Sandra Hayward
	Title:	Vice President

4

EX-12

Exhibit 12

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends

(Dollars in thousands)

	Years Ended December 31,
	2006			2005			2004			2003			2002
(Loss)/income before discontinued operations, net of minority interests	$	(27,407	)	$	729		$	6,976		$	7,086		$	(28,922	)
Add:
Portion of rents representative of the interest factor		679			667			651			651			691
Minority interests		(2,619	)		(810	)		(1,048	)		(2,047	)		(2,288	)
Interest on indebtedness from continuing operations		182,285			162,773			122,024			114,300			124,901
Earnings	$	152,938		$	163,359		$	128,603		$	119,990		$	94,382
Fixed charges and preferred stock dividend:
Interest on indebtedness from continuing operations	$	182,285		$	162,773		$	122,024		$	114,300		$	124,901
Capitalized interest		5,173			2,769			986			1,808			931
Portion of rents representative of the interest factor		679			667			651			651			691
Fixed charges		188,137			166,209			123,661			116,759			126,523
Add:
Preferred stock dividend		15,370			15,370			19,531			26,326			27,424
Accretion of preferred stock		—			—			5,729			19,271			—
Preferred stock dividend and accretion of preferred stock		15,370			15,370			25,260			45,597			27,424
Combined fixed charges and preferred stock dividend	$	203,507		$	181,579		$	148,921		$	162,356		$	153,947
Ratio of earnings to fixed charges		—			—			1.04	x		1.03	x		—
Ratio of earnings to combined fixed charges and preferred stock dividend		—			—			—			—			—

For the year ended December 31, 2006, the ratio of earnings to fixed charges was deficient of achieving a 1:1 ratio by $35.2 million.

For the year ended December 31, 2006, the ratio of earnings to combined fixed charges and preferred stock dividend was deficient of achieving a 1:1 ratio by $50.6 million.

For the year ended December 31, 2005, the ratio of earnings to fixed charges was deficient of achieving a 1:1 ratio by $2.9 million.

For the year ended December 31, 2005, the ratio of earnings to combined fixed charges and preferred stock dividend was deficient of achieving a 1:1 ratio by $18.2 million.

For the year ended December 31, 2004, the ratio of earnings to combined fixed charges and preferred stock dividend was deficient of achieving a 1:1 ratio by $20.3 million.

For the year ended December 31, 2003, the ratio of earnings to combined fixed charges and preferred stock dividend was deficient of achieving a 1:1 ratio by $42.4 million.

For the year ended December 31, 2002, the ratio of earnings to fixed charges was deficient of achieving a 1:1 ratio by $32.1 million.

For the year ended December 31, 2002, the ratio of earnings to combined fixed charges and preferred stock dividend was deficient of achieving a 1:1 ratio by $59.6 million.

EX-21

Exhibit 21

     The Company has the following subsidiaries. Ashwood Commons, L.L.C., Bellevue Plaza Development LLC, Jefferson at Marina del Rey, L.P. and UDR/Pacific Los Alisos, L.P. are joint venture entities. United Dominion Realty, L.P. and Heritage Communities L.P. are limited partnerships with outside limited partners holding minimal percentage interests. The Company owns general and limited partnership interests in United Dominion Realty, L.P. and Heritage Communities L.P., constituting 94% in each, of the aggregate partnership interest. The Company owns a 20% limited partnership interest of University Arms Limited Partnership. All other entities are wholly owned.

	State of Incorporation
Subsidiary	or Organization
AAC Funding II, Inc.	Delaware
AAC Funding IV LLC	California
AAC Funding IV, Inc.	Delaware
AAC Funding Partnership II	Delaware
AAC Funding Partnership III	Delaware
AAC Seattle I, Inc.	Delaware
AAC Vancouver I, L.P.	Washington
AAC/FSC Crown Pointe Investors, LLC	Washington
AAC/FSC Hilltop Investors, LLC	Washington
AAC/FSC Seattle Properties, LLC	Delaware
Arizona Properties, LLC	Virginia
ASR Investments Corporation	Maryland
ASR of Delaware LLC	Delaware
Ashwood Commons, L.L.C.	Washington
Bellevue JV LLC	Delaware
Bellevue Plaza Development LLC	Delaware
CMP-1, LLC	Delaware
Coastal Long Beach Properties, LLC	Delaware
Coastal Monterey Properties LLC	Delaware
Coit Road, L.P.	Delaware
Coronado South Apartments, L.P.	Delaware
DCO Addison at Brookhaven LP	Delaware
DCO Arbors at Lee Vista LLC	Delaware
DCO Greenhaven LP	Delaware
DCO Holdings, Inc.	Delaware
DCO Holdings LP LLC	Delaware
DCO 1015 Grandview LP	Delaware
DCO Interests, Inc.	Delaware
DCO Mill Creek LP	Delaware
DCO Option 2 LLC	Delaware
DCO Pine Avenue LP	Delaware
DCO Realty, Inc.	Delaware
DCO Realty LP LLC	Delaware
FMP Member, Inc.	Delaware
Fountainhead Apartments Limited Partnership	Ohio
Glendale Grandview LLC	Delaware
Glendale Grandview Member LLC	Delaware
Governour’s Square of Columbus Co.	Ohio
HPI Canyon Oaks LP	Delaware
HPI Option 2 LLC	Delaware
HPI 2161 Sutter LP	Delaware
Harding Park, Inc.	Delaware
Harding Park LP LLC	Delaware
Hawthorne Apartments LLC	Delaware

1

	State of Incorporation
Subsidiary	or Organization
Heritage Communities L.P.	Delaware
Inlet Bay at Gateway, LLC	Delaware
Jamestown of St. Matthews Limited Partnership	Ohio
Jefferson JV LLC	Delaware
Jefferson at Marina del Rey, L.P.	Delaware
Lakeside Port Orange LLC	Delaware
Lincoln TC II, L.P.	Delaware
LPC Plantation Apartments L.P.	Delaware
MacAlpine Place Apartment Partners, Ltd.	Florida
Mandalay on the Lake LP	Delaware
Milazzo Residences LLC	Delaware
Northbay Properties II, L.P.	California
Okeeheelee Apartment Partners, Ltd.	Florida
Parker’s Landing Condominiums LLC	Delaware
Parker’s Landing Townhomes LLC	Delaware
Parker’s Landing Venture I	Florida
Parker’s Landing Venture II	Florida
Polo Park Apartments LLC	Delaware
Polo Park Manager LLC	Delaware
Ridgewood (I) Townhomes, LLC	Virginia
St. Johns GP LLC	Delaware
Sierra Palms Condominiums LLC	Delaware
The Commons of Columbia, Inc.	Virginia
Town Square Commons, LLC	District of Columbia
Trilon Townhouses, LLC	District of Columbia
UDR Arboretum Apartments, L.P.	Delaware
UDR Arborview Associates Limited Partnership	Maryland
UDR Aspen Creek, LLC	Virginia
UDR California GP, LLC	Delaware
UDR California GP II, LLC	Delaware
UDR California Properties, LLC	Virginia
UDR Calvert, LLC	Delaware
UDR Calvert’s Walk Associates Limited Partnership	Maryland
UDR Calvert’s Walk GP, LLC	Delaware
UDR Carlsbad Apartments, L.P.	Delaware
UDR Carriage Homes, LLC	Delaware
UDR Crossroads, L.P.	Delaware
UDR Developers, Inc.	Virginia
UDR Foxglove Associates L.L.C.	Maryland
UDR Harbor Greens, L.P.	Delaware
UDR Holdings, LLC	Virginia
UDR Huntington Vista, L.P.	Delaware
UDR Lakeside Mills, LLC	Virginia
UDR Los Alisos, LLC	Delaware
UDR Maryland Properties, LLC	Virginia
UDR Midlands Acquisition, LLC	Delaware
UDR Newport Beach North, L.P.	Delaware
UDR Ocean Villa Apartments, L.P.	Delaware
UDR Ohio Properties, LLC	Virginia
UDR Out-Performance I, LLC	Virginia
UDR Out-Performance III, LLC	Delaware
UDR Out-Performance IV, LLC	Delaware
UDR Pinebrook, L.P.	Delaware
UDR Presidential Greens, L.L.C.	Delaware
UDR Presidio, L.P.	Delaware
UDR Rancho Cucamonga, L.P.	Delaware

2

	State of Incorporation
Subsidiary	or Organization
UDR Ridgewood (II) Garden, LLC	Virginia
UDR San Dimas Bonita Apartments, L.P.	Delaware
UDR San Dimas Canyon Apartments, L.P.	Delaware
UDR South Carolina Trust	Maryland
UDR Texas Properties I, LLC	Delaware
UDR Texas Properties II, L.P.	Delaware
UDR Texas Properties, L.P.	Delaware
UDR the Crest, L.P.	Delaware
UDR Ventures I, LLC	Delaware
UDR Villa Venetia Apartments, L.P.	Delaware
UDR Virginia Properties, LLC	Virginia
UDR Western Residential, Inc.	Virginia
UDR Windjammer, L.P.	Delaware
UDR Woodland Apartments II, L.P.	Delaware
UDR Woodland GP, LLC	Delaware
UDR/AEGON Development Venture I, LLC	Delaware
UDR/Pacific Los Alisos, L.P.	Delaware
UDR of NC, Limited Partnership	North Carolina
UDR of Tennessee, L.P.	Virginia
UDRT of Delaware 4 LLC	Delaware
United Dominion Realty, L.P.	Delaware
United Dominion Realty Trust, Inc.	Maryland
United Dominion Residential Ventures, L.L.C.	Virginia
United Dominion Residential, Inc.	Virginia
University Park Property LLC	Delaware
Waterside Towers, L.L.C.	Delaware
Windemere at Sycamore Highlands, LLC	Delaware
Winterland San Francisco Partners	California
Woodlake Village, L.P.	California

3

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of United Dominion Realty Trust, Inc. and in the related Prospectuses of our reports dated February 23, 2007, with respect to the consolidated financial statements and schedule of United Dominion Realty Trust, Inc., United Dominion Realty Trust, Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of United Dominion Realty Trust, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2006:

Registration Statement Number	Description
33-40433	Form S-3, pertaining to the registration of 900,000 shares of the Company’s Common Stock.
33-58201	Form S-8, pertaining to the Employees’ Stock Purchase Plan.
333-11207	Form S-3, pertaining to the registration of 1,679,840 shares of the Company’s Common Stock.
333-32829	Form S-8, pertaining to the Company’s Stock Purchase and Loan Plan.
333-42691	Form S-8, pertaining to the Company’s 1985 Stock Option Plan.
333-48557	Form S-3, pertaining to the registration of 104,920 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-53401	Form S-3, pertaining to the registration of 1,528,089 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-58600	Form S-8, pertaining to the Employees’ Stock Purchase Plan.
333-64281	Form S-3, pertaining to the registration of 849,498 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-72885	Form S-3, pertaining to the registration of 130,416 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-75897	Form S-8, pertaining to the Company’s 1999 Long-Term Incentive Plan.
333-77107	Form S-3, pertaining to the registration of 1,023,732 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.

Registration Statement Number	Description
333-77161	Form S-3, pertaining to the registration of 481,251 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-80279	Form S-8, pertaining to the Company’s 1999 Open Market Purchase Program.
333-82929	Form S-3, pertaining to the registration of 95,119 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-86808	Form S-3, pertaining to the registration of 12,307,692 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-106959	Form S-3, pertaining to the registration of 3,425,217 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-116804	Form S-3, pertaining to the registration of 1,617,815 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock.
333-129743	Form S-3, pertaining to the registration of 11,000,000 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock, issuable under the Company’s Dividend Reinvestment and Stock Purchase Plan.
333-131278	Form S-3, Shelf Registration Statement, pertaining to the registration of an indeterminate amount of Common Stock, Preferred Stock, Debt Securities, Warrants, Purchase Contracts and Units.
333-135261	Form S-8, pertaining to the registration of 46,860 shares of Common Stock, including rights to purchase Series C Junior Participating Redeemable Preferred Stock, in connection with the Inducement Grant of Performance Contingent Restricted Stock and Restricted Stock.
333-139904	Form S-3, pertaining to the registration of $250,000,000 Principal Amount of 3.625% Convertible Senior Notes due 2011 and shares of Common Stock issuable upon conversion of the Notes.

	/s/ Ernst & Young LLP
Richmond, Virginia
February 23, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Thomas W. Toomey, certify that:

1.	I have reviewed this annual report on Form 10-K of United Dominion Realty Trust, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2007	/s/ Thomas W. Toomey
	Thomas W. Toomey
	Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael A. Ernst, certify that:

1.	I have reviewed this annual report on Form 10-K of United Dominion Realty Trust, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
	(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 1, 2007	/s/ Michael A. Ernst
	Michael A. Ernst
	Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

     In connection with the periodic report of United Dominion Realty Trust, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission (the “Report”), I, Thomas W. Toomey, Chief Executive Officer and President of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

     (1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: March 1, 2007	/s/ Thomas W. Toomey
	Thomas W. Toomey
	Chief Executive Officer and President

EX-32.2

EXHIBIT 32.2

CERTIFICATION

     In connection with the periodic report of United Dominion Realty Trust, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission (the “Report”), I, Michael A. Ernst, Executive Vice President and Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

     (1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Date: March 1, 2007	/s/ Michael A. Ernst
	Michael A. Ernst
	Executive Vice President and Chief Financial Officer